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MARKET OVERVIEW

1.1 Market definition and overview

Chips are said to have originated in the United States at the end of the 19th century and have since become a best-seller in the retail sector. Chips are a sub-segment of the snacking market, largely dominated by the United States

There are different types of chips:

  • Classic/traditional chips (thin, flat, tile etc.)
  • Flavoured chips (e.g. barbecue, cheese, onions, vinegar)
  • Vegetable chips (e.g. radishes, parsnips, carrots, beets, etc.)
  • Healthy chips
  • Premium chips

The world market for potato chips is primarily a very western market where the United States and Europe largely dominate in terms of revenue generated

The French potato chip market is growing rapidly and is expected to continue to do so in the coming years. In fact, the French market for appetizers, of which potato chips are a sub-segment, totaled €2.19 billion in 2019, up 3% in volume and 2.6% in value Potato chip consumption per person is also following the same trend.

The marketing innovations (packaging, communication, merchandising) and in terms of revenue (herbs, flavours, spices) are trying to make this market even more dynamic. However, France has the particularity of being a market where the seasonality of consumption is much more marked than in the rest of our European neighbours. Chips remain above all products associated with summer and consumed during barbecues, apéritifs and festive evenings.

In this context, the main market players are trying to diversify the offer with new recipes (vegetable and fruit chips) but also investing in the high-end segment of the market in order to stimulate a more regular demand (snacking) or consumption as a meal accompaniment. Also, the potato chip market is not immune to the organic trend and the healthy and sees the appearance of many light, palm oil-free and responsibly produced products.

The French market, like the global market, remains relatively concentrated around global players such as PepsiCo.

The COVID-19 pandemic had a positive impact on this market. With more people staying at home, for longer and extended periods of time due to the enforced confinements the consumption of savoury snacks, and in particular potato chips sky rocketed.

1.2 The global market

In ****, the global potato chip market was valued at **.* billion dollars. It is expected to grow at a compound annual growth rate (***) of *.*% to reach a value of **.* billion dollars by ****.

Potato chip market World, ****-****, in billions of dollars Source: ****

There are three main ingredients for potato chips:

Potatoes ...

1.3 The French market

Potato chips are a segment of the overall apéritif market.

The French apéritif market amounted to *.** billion euros in ****, up *% in volume and *.*% in value. Within this market, the chips segment accounted for ***.* million euros over the same period, increasing to *** million euros in ****.

Potato chip market France, ****-****, ...

1.4 Imports & exports

France is largely dependent on the outside world to supply the national market with potato chips. Indeed, the trade balance in value reached -*** million euros in ****, and has been progressively widening over the last few years: in ****, it stood at -*** million euros. In volume, the French trade balance deficit ...

1.5 Impact of COVID-19

The COVID-** pandemic had destructive economic effects for many markets and industries. Enforced lockdowns, restricted movement, social distancing and other governmentally imposed sanitary measures spelled doom for numerous small businesses, the hospitality sector and other markets. The same cannot be said for the potato chip market. In fact, with more people ...

ANALYSIS OF THE DEMAND

2.1 Apéritif and savoury snack consumption drive the chip market

The strong dynamism of the apéritif category

The crisps segment is driven by the buoyant context of the good performance of the savoury snacks larger market. In fact, this market was worth *.* billion euros in ****, and is expected to break the * billion euro mark in ****.

Value of the savoury snacks ...

2.2 Consumption of potato chips

With regard to potato chips, there is an increasing tendency among the French population to consume these products. Indeed, the penetration rate of crisps in France has increased from **% in **** to over **% in ****. Nevertheless, the French consume relatively little compared to their European neighbours, as mentioned above, the French consume half ...

2.3 Junk food consumption habits

Chips, and chip like products (***) are the fifth most popular junk food in France with **% of people in France affirming that they consume them "often" or "from time to time". However, there is a huge discrepancy in terms of satisfaction derived from consuming chips, with only **% of French proving pleasure after ...

2.4 Potato chips in France

Consumers of potato chips can be categorised in three ways:

Light users (***) Medium users (***) Heavy users (***)

Every year, around ** million French people consumer potato chips. An overwhelming majority of these are considered to be 'light users'.

Number of potato chip consumers France, ****-****, in millions of consumers Source: ****

Potato chips can ...

MARKET STRUCTURE

3.1 Potato production in France

France is among the main European producers of potatoes: in ****, its production was around **** thousand tonnes, a strong growth compared to **** (***).

Potato production Europe, **** and ****, in thousands of tonnes Source: ****

Potato production France, ****-****, in thousands of tonnes Source: UNPT-CNIPT  The production area for potatoes has also grown strongly in France ...

3.2 Potato processing in France

The main outlet for French potatoes remains export, since French production far exceeds national consumption. French potatoes are mainly exported to southern European countries (***). The French potato processing market represents only **% of French production [***].

Potato production outlets France, ****, in % Source: ****

Here is considered the data provided by INSEE for the following ...

3.3 Main players and segmentation

In terms of the groups and brands present in the final market, the potato chip segment is largely concentrated. Lay's controls almost **% of the market value, while supermarket brands hold **%. Internsack (***) has a market share of **%, followed by Bret's at **%.

Breakdown of market share (***) of potato chips, by brand France, ****, in ...

ANALYSIS OF THE OFFER

4.1 Typology of the offer

Plain potato chips

Plain potato chips are produced by dipping thin slices of potato, between * and * mm, in sunflower oil at *** to *** °C for * to * minutes

There are a variety of ways to cut the potato, flat or wavy, very thin or rather thick, which will give as many varieties of ...

4.2 Overview of market prices

As the market is mainly structured around the brands of large groups, the production is fairly standardised. However, the prices charged can be quite variable, some brands favouring production methods based on lower amounts of salt or palm oil.

Thus, while Monoprix sells balsamic vinegar-flavoured crisps for less than one euro ...

4.3 Innovation drives the market

In the market for apéritif products, innovation plays a central role and represented *.*% of the category's sales in ****, up **% on ****. The French people's desire for renewal and originality for their apéritifs ensures a strong success for the numerous product innovations launched on the market each year [***].

The organic

Organic, ...

REGULATION

5.1 The main principles of food hygiene in France

All foodstuffs are subject to the general provisions of the Consumer Code in terms of obligations of conformity (***).

Several regulations establish the legislative basis of food hygiene in France:

Regulation No ***/**** on the general principles and requirements of food law [***]; The regulation n°***/**** on the hygiene of foodstuffs [***]; The regulation n°***/**** ...

5.2 A specific regulatory issue for potato-based foods: acrylamide

Acrylamide is a compound that occurs naturally when starchy foods such as potatoes are cooked. It is therefore particularly present in foods such as French fries and potato chips. In ****, the European Food Safety Authority warned about the potential harmful effects of this compound on human health, including an increased risk ...

POSITIONING OF THE ACTORS

6.1 Segmentation

  • Intersnack (Knabber Geback)
  • Kellogg’s
  • Altho SAS
  • PepsiCo

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