Essay About End Consumers Preferences And Savory Snacks Market

The Major Buyers
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The major buyers in the UK savory snacks market are supermarkets and hypermarkets (about 53.1% of the total
distribution). Such buyers usually have a strong financial muscle and are able to purchase in bulk. Loosing such
customer may have a negative impact on producers revenues, boosting buyer power within this market.
Furthermore, the products classified as savory snacks constitute just one of a wide range of products sold by most food
retailers and this reduces the importance of this product to buyers, increasing buyer power furthermore.
While retailers themselves are not very susceptible to brands, the end consumers preferences and brand loyalty will
have a pull-through of retailers stocking decisions. Consumer demand is likely to be more price-sensitive in countries,
where average consumer incomes are lower, and retailers will be correspondingly price-sensitive, if they wish to maintain
their margins on these products.
Overall, buyer power is assessed to be moderate.
Suppliers in the savory snacks market include agricultural commodity traders, agricultural producers, manufacturers of
ingredients and packaging, and factory automation equipment.
Market players generally buy perishable raw materials, such as potatoes, direct from the growers, which are often
relatively small businesses. Vegetable oils, and grains, such as maize, are more commonly provided by commodity
traders and these are often large multinationals, such as Bunge.
While market players rarely integrate backwards into farming, some (for example: ConAgra) have already become active
in commodity trading; a trend that weakens supplier power. Similarly, many market players manufacture ingredients,
such as flavorings. Conversely, some farmers integrate forward – for example, Tyrrells started as a potato farming
business, but began making hand-cooked potato chips in 2002, and later diversified into other savory snack products.
While consumer preferences must be catered for, players can mitigate the impact of changing raw material prices by
diversifying their product mix – for example, producing both potato chips and corn chips.
Overall, supplier power is assessed to be moderate.