1. Nuts, Seeds and Dried Fruit
September 2010

2. Key themes What is driving consumption of nuts, seeds and dried fruit?
Trends in the types of nuts, seeds and dried fruit that are being consumed.
How do consumers perceive the health benefits of eating nuts, seeds and dried fruit?
How has the revival in home baking/cooking from scratch affected the sector?
How is innovation catering to consumers changing tastes and lifestyles?
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3. Summary Value sales growth for the sector Trends in the market
Retail sales for the nuts, seeds and dried fruit sector reached £547 million in 2009, enjoying sales growth of 22% since 2005.
Nuts continue to dominate, accounting for about three fifths of the sector, while dried fruit maintains a steady share and seeds see the biggest growth, albeit from a smaller base.
Trends in the market
The healthy eating trend remains a key driver within the UK market, although this has somewhat lessened during the recession. Consumer education on the health benefits of nuts, seeds and dried fruit will help to grow the sector further.
Rising wholesale prices, caused by increased worldwide consumption, the weak pound and poor crop harvests has put pressure on manufacturers and retailers, who have tried to absorb the cost.
The revival in home baking/cooking from scratch has suited the nuts, seeds and dried fruit categories, which are suitable for a variety of uses and available in branded and own-label formats.
Consumers and their attitudes
Nuts, seeds and dried fruit have held on to their core demographic of over 45s (35-44-year-olds for seeds) throughout the recession, as usage increases with affluence (and age). Almost one third of consumers do not buy into the sector on a regular basis, however, and more needs to be done to attract new users to the market.
At home consumption dominates usage occasions and the sector has benefitted from an increase in home entertaining, particularly by its core customers.
The target market of those consumers aged under 35 are the most adventurous in their tastes but consumers are generally creatures of habit when it comes to eating nuts, seeds and dried fruit, with salted peanuts and raisins dominating.
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4. Internal Market Environment
Health somewhat drops on people’s priority lists during times of recession but remains an issue. Consumers have become less willing to pay for healthier options and found that due to their hectic lifestyles, the need for convenient options is most important.
Premiumisation has continued, despite the recession. Manufacturers have looked to give adults a healthy but indulgent treat by introducing new and exciting flavours e.g. wasabi peanuts or Marmite Cashews and by drying superfruits such as cranberries.
Ethical issues such as organic have become less of a priority as consumers question the efficacy of more expensive products. Fair trade has been able to rely on consumers’ altruistic nature and launches such as comedian Harry Hill’s fair trade Harry’s Nuts range, in partnership with Liberation.
The recession, a celebrity chef culture and a genuine interest in food and its origins has prompted a revival in baking/cooking. Consumers, including men, are experimenting and TV shows such as The Great British Bake-Off will help to boost confidence. 3
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

5. Broader Market Environment
Poor crop harvests worldwide, growth in consumption in developing countries and a weak Pound have resulted in rising wholesale prices. This has pushed up manufacturers’ costs, although the majority of retailers have been able to absorb such rises.
A rise in the over 45s and the retired will help maintain growth in the sector, as concerns about health are most prominent amongst older consumers.
A growing AB demographic will help to drive premiumisation and could mean an expansion in fair trade and organic launches.
The number of working women is set to increase by 1.5% by 2015, fuelling growth in snack size convenient packs.
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6. Strengths and Weaknesses
There is some consumer confusion over the health benefits, as nuts are relatively high in fat and salt and dried fruit has a high (albeit natural) sugar content.
Almost a third of consumers do not eat nuts, seeds and dried fruit, highest amongst year-olds and those in the C1, D and E socio-economic groups.
The higher cost of nuts, seeds and dried fruit when compared to conventional snacks (chocolate, crisps and fresh fruit) is a barrier to purchase.
Limited above-the-line support and the dominance of own-label products means that nuts, seeds and dried fruit receive little advertising spend.
The UK’s emergence from the recession is expected to be slow; more worrying for the nuts, seeds and dried fruit categories is the continuing rise in wholesale prices, with the slide of Sterling, poor crop harvests in China, the US and Turkey and the growth in consumption in developing countries fuelling the increase.
Consumer interest in natural wellbeing and health should help to boost the nuts, seeds and dried fruit categories, as the importance of looking after yourself returns to the fore as a priority in post-recession Britain.
The rapid growth and dominance of the health-aware AB population should be good news for the categories and for premiumisation in the market. Brands such as Whitworths have already responded through its Nibl range that targets adults who want a healthy but indulgent treat.
Similarly, the 7.2% growth in the over-45s by 2015 bodes well for the nuts and dried fruit categories, as over-45s are the heaviest users.
Brands and retailers are promoting the versatility of nuts, seeds and dried fruit in order to widen consumption occasions. The revival of home baking/scratch cooking has boosted sales, as has innovation in pack sizes (both sharing and individual) and multiple store positioning.
Innovation has continued throughout the recession and with more brands getting involved (Marmite launched Cashew Nuts and Dormen’s continued with its Salad Days seeds range) this will raise awareness of the sector.
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

7. Who’s Innovating
Innovation has continued despite the recession as brands and own-label seek to keep customers interested and attract new consumers to the market.
Premium mixes have looked to stimulate interest from adults looking for a healthy but indulgent treat.
Flavour innovation has spiced up the market, taking inspiration from world cuisine such as Japanese wasabi.
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

8. Market Size and Forecast
UK retail sales of nuts, seeds and dried fruit, by value,
The nuts, seeds and dried fruit market has experienced robust sales in the past five years, reaching £547 million in Value growth has been spurned on by premiumisation in the market, the revival of home baking/cooking from scratch and a more health-conscious consumer.
The health credentials for nuts, seeds and dried fruit make future growth plausible.
The total market is set to reach £689 in the next five years, representing an impressive 19% growth between 2010 and 2015.
Source: Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

9. Segment Performance
Premium options dominate the nuts category, benefiting from NPD from brands and grocers’ own-label offerings, while mixes have allowed manufacturers to cut costs.
Dried fruit (especially tree fruits) have managed to grow, despite a decline in volume sales.
Seeds continue to see the strongest growth, although this is from a much lower base.
UK retail sales of nuts, seeds and dried fruit,
Source: Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

10. Brand Communication and Promotion
Main monitored media spend on nuts, seeds and dried fruit,
Above-the-line support for nuts, seeds and dried fruit has been declining as manufacturers and retailers continue to rely on the strengths of their brands to drive sales.
Sun-Maid Growers of California continues to dominate advertising spend, having overturned the FSA’s ban on advertising to children in 2009.
PepsiCo has failed to invest in its Nobby’s Nuts brand since 2007, subsequently losing market share.
Source: Nielsen Media Research
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

11. Consumer Usage
Top 10 types of nuts, seeds and dried fruit eaten on a regular basis, June 2010
Consumption of nuts has reached three fifths of consumers, while dried fruit attracts almost half and seeds a fifth.
Other shelled and salted nuts remain favourites, while raisins dominate and single seeds prove popular.
Nuts and dried fruit attract a very similar base – affluent and heavily biased towards the over 45s.
Seeds amount to a third of the market of nuts and have managed to appeal to women aged by optimising their health credentials. %
All nuts 61
All dried fruits 48
All seeds 22
Dried raisins 32
Other shelled nuts, with shells already removed 30
Salted peanuts 28
Other dried fruit (eg prunes, apricots, cranberries, figs etc) 23
Dry-roasted peanuts 20
Mixed nuts of any type 17
Mixed dried fruit
Single seeds (ie sunflower, pumpkin, sesame) 16
Mixed nuts and dried fruit
Mixed seeds 13
Source: Toluna/Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

12. Ways in which nuts, seeds and dried fruit are eaten/used, June 2010
Occasions
Ways in which nuts, seeds and dried fruit are eaten/used, June 2010
Nuts, seeds and dried fruit are most commonly eaten as a snack at home, with over-45s driving consumption through home entertaining.
Out-of-home snacking peaks amongst 25-34s and those in full-time employment, posing ample opportunity to target workers.
The rise in home baking/cooking from scratch has resulted in increased usage, particularly for dried fruit.
Base: Internet users aged 16+ who eat nuts (606), dried fruit (481) and seeds (223) on a regular basis
Source: Toluna/Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

13. Consumers’ attitudes towards nuts, seeds and dried fruit
Net difference* between any agree statements on attitudes towards eating nuts and dried fruit, by gender, June 2010
There is consumer confusion surrounding the health issue, with almost half (44%) believing that nuts are unhealthy, while four fifths (79%) agree they are a good source of protein.
Cost is a prohibitive factor for dried fruit consumption as two fifths think it is too expensive, which is particularly the case for those aged in the C1 socio-economic group.
Under-35s are more adventurous in their attitudes and are most willing to try new varieties of nuts and dried fruit.
Base: 1,000 internet users aged 16+
Source: Toluna/Mintel
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.