From Trend to Law: Healthier Snacking in Western Europe
With 58% of European consumers wanting to improve their eating habits (Euromonitor International’s Voice of the Consumer: Health and Nutrition Survey, 2022), it is unsurprising to see a clear trend towards calorie reduction and innovation focusing on limiting sugar, fat and salt in the snacks industry. But it’s regulation and government intervention that stand to be the real determinants of change in Western Europe.
More than 67% of adults in Western Europe are overweight or obese (BMI 25 or more) according to Euromonitor’s Economies and Consumers 2021 data. The scale of this health problem is turning healthier snacking from an evolving consumer trend to a regulated imperative for snacks manufacturers and retailers.
The UK is currently in the spotlight of the European snacking industry as the British Government is introducing a set of drastic restrictions around products that are high in fat, sugar and salt (HFSS regulation) in England in October 2022 with more restrictions to follow over the course of the next two years.
HFSS regulation in England
From October 2022, HFSS regulation will see products classified as high in fat, sugar and salt (according to the government’s scoring system) removed from prominent in-store and online positions in retailers above 185.8 sq m. In 2023, further restrictions on volume-based promotions are also expected to be introduced prohibiting multibuy offers, such as “buy one get one free”.
With the snacking industry comprising mostly HFSS products and relying hugely on impulse sales and promotions, volume sales declines are projected across most in-scope snacking categories over 2022 and 2023 as a result. In certain categories, the volume sales decline is expected to be sustained in 2024 given that advertising restrictions (ie a 9pm watershed on TV and a ban of paid online advertisements) are scheduled to be introduced in January that year.
Alongside its negative impact on impulse buying, the regulation is expected to create barriers to the investment and promotion of new products launches, while restricted shelf space is likely to intensify the competition in main aisles, contributing to the delisting of slow moving products and accelerating rationalisation of SKUs.
In addition to HFSS regulation, the British Government has taken a wider approach to raise consumer awareness on healthy nutrition and tackle obesity. In January 2022, it launched the NHS Food Scanner app which allows consumers to scan product barcodes on food items, check their fat, sugar and salt content (classified as high, medium or low) and find healthier alternatives. Furthermore, since April 2022, out-of-home food businesses, including restaurants, cafes and takeaways with more than 250 employees, are required to add calorie labels to their products.
Kellogg’s legal opposition to governmental plans was defeated in July 2022 and limits any further opportunities for legal challenges and confirms the government’s strong position. Facing these challenges, brand manufacturers active in England are heavily investing in recipe reformulations and new product developments that are exempt from the regulation. In savoury snacks, for example, KP Snacks is committing to offer over 100 SKUs and a quarter of its portfolio classified as non-HFSS by October 2022. Similar alternatives are becoming available from both leading and emerging players, such as United Biscuits in sweet biscuits, KIND in snack bars and Oppo Brothers in ice cream.
Focus on permissible indulgence in Western Europe
Voluntary initiatives that address the rising trend towards healthier snacking have been widely adopted by snacks manufacturers and retailers across Western Europe to leverage consumers’ demand for indulgent treats without compromising on nutritional value.
On the one hand, snacks manufacturers are increasingly investing in expanding the number of offerings that are low in fat, sugar and salt, with the number of SKUs with relevant claims rapidly growing in the region. In France, for example, the sugar confectionery company Lutti has reduced the sugar content of its Happy Fizz assortments by 40%, while in Spain, Zumosol, the producer of juices, has partnered with Helados KTC to introduce a line of sugar, fat and gluten free ice cream which is high in fibre and vitamin C.Beyond a drive from the consumer side, healthy eating is now becoming a need forcing governments to take further action. Similar to the UK, there is increasing governmental pressure in Germany towards regulating the promotion of unhealthy snacks, with the government planning to prohibit advertisements of food with high fat, sugar and salt in TV shows and other formats for children under 14 years old. In addition to this, the EU Commission intends to propose a mandatory nutrition labelling model by the end of 2022 across all member states, similar to the nutritional traffic light system Nutri-Score which is already in use on a voluntary basis in several European countries, including France, Spain, Germany and the Netherlands.
Such initiatives reflect the determination across European governments to improve the eating habits of consumers, with the pioneering HFSS regulation in England highlighting the power of public bodies to influence and disrupt the entire foods industry despite the reaction of food companies. As the European snacking market is being transformed into an increasingly regulated environment where promotions and advertising are dramatically restricted, there is an unprecedented need among snacks manufacturers and retailers to stand out through innovation on recipe reformulation without disregarding taste, the most important factor that drives snacks consumption.
For further insight, see the full report on Snacks in the United Kingdom. Analysis and key data findings for all Euromonitor International’s 100 research countries can be found here. These reports provide an in-depth understanding of national market dynamics and offer essential local insight unavailable elsewhere.