The introduction of new high in fat, sugar and salt (HFSS) legislation is set to radically impact wholesalers.
Aspects of the legislation, including the ban on volume promotions such as 50% extra free or BOGOF, have now been delayed until October 2023.
But the location restrictions, which include placing HFSS items in areas such as on the end of aisles or by the checkout, will go ahead in October 2022.
Matt Collins, Trading Director at KP Snacks Limited, tells Wholesale Manager how the legislation will affect wholesalers.
What will the HFSS legislation mean for wholesalers?
The primary task for wholesalers is to support and educate their customers to ensure they’re ready for the legislation and embracing it. While wholesalers are exempt, they have a duty of care to educate, advise and guide retailers, helping them navigate through an evolving and ever changing environment.
HFSS is one of the most significant changes to impact Convenience impulse shopping of recent years and retailers need help to ensure they can maximise sales across all impacted impulse categories, including bagged snacks.
The landscape is confusing, so communication is key. We’ve already seen a number of delays, initially with the timescales moving from April to October and then the most recent delay of promotional restrictions moving from October this year to 2023.
What is clear now is that location restrictions will still apply for retailers with over 50 employees and floor selling space of over 2,000 square feet. They will not be able to place HFSS products within certain distances of store entrances, checkouts, end of aisles and designated queuing areas. With varying store sizes, formats and ways of structuring their businesses, retailers need to understand what it means for them to be compliant.
Are wholesalers prepared enough for the new legislation?
The industry has rallied to support customers through these changes and for the most part is prepared. While some wholesalers started preparations earlier than others and some have been more advanced in their modelling and approach, the process has been complex.
Wholesalers are continuing to apply flexibility and agility, pivoting to an evolving agenda and timescale, whilst working with suppliers, manufacturers and their customers to navigate this change in legislation.
Hopefully the approach is now set in stone so the preparation that the industry has applied will support retailers in embracing the opportunity.
Will wholesalers need to review their ranges?
With location restrictions still going ahead in October, retailers and wholesalers will need to ensure their ranges reflect customer needs and get prepared for an uplift in customer demand for healthier products.
So, what does that look like in terms of non-HFSS products?
We have accelerated reformulation across our ranges, ensuring there is no compromise on taste. We will have 110 non-HFSS SKUs by October, a quarter of our portfolio, making it one of the most comprehensive non-HFSS ranges available in the CSN market exempt from location restrictions.
We’ve also accelerated innovation for KP Nuts in both natural and tasty nuts. Because of natural protein and health benefits, nuts are exempt from location restrictions and are perfectly placed to replace other impulse items at till point for example.
We’re also really clear that there are certain lines we won’t change because consumers still want to treat themselves as part of a healthy and balanced lifestyle. McCoy’s Flame Grilled Steak is a perfect example of a product that we wouldn’t want to change.
How are you helping retailers through these changes?
There’s been a huge amount of change for retailers in recent years, with calorie labelling, through Natasha’s law, the sugar levy and HFSS to name a few.
We’re really clear on what we need to do to help inform retailers and help them navigate through the changes.
We’re doing this from the ground up, creating certainty and awareness through our SnacKPartners network, delivering trials to help them adjust and learn and sharing those learnings with other retailers. We’re also educating and driving awareness through the trade media and through our partnership with wholesalers.
We pride ourselves in being easy to do business with. To help retailers adapt to the regulations and easily identify appropriate products, we have introduced product cases stamped with a newly developed KP Snacks non-HFSS flash.
The clearly marked non-HFSS cases will support retailers by making it easier to navigate the wholesale aisle and locate products free from location restrictions. In-store staff will also benefit from these easily identifiable product cases, making it simpler for them to arrange and replenish non-HFSS stock.
We’ll be providing a list of our best sellers that are compliant, making it as easy as possible for retailers to order and shop for stock. We’re going back to basics with new merchandising advice too, helping retailers adjust and continue to drive sales. This includes a simple, step-by-step HFSS retailer guide with top tips on optimising CSN fixtures and advice on power aisles or event aisles. We’re also providing recommendations on different POS and display solutions all the way through to recommendations on till point solutions for nuts. We’ve been undertaking retailer trials for new approaches which is delivering really interesting and exciting results.
Will KP be reviewing its ranges to focus on products that comply with the legislation?
As an industry leader, we have ensured we are prepared for the upcoming changes, and we’re working hard to make sure our retail partners feel similarly ready to continue driving category growth once the legislation is introduced.
As a part of our ‘Taste for Good’ commitment, we have been working on improving the health credentials of our products for a number of years.
We’ve focussed our accelerated programme of reformulation on our market leading healthy snacking brands.
popchips, is a beacon brand in healthy snacking and will be reformulated across the entire range. Our hugely popular sharing range Tyrrells includes non-HFSS Tyrrells Lightly Sea Salted and our new Tyrrells Mediterranean Herb, both exempt from location restrictions, as is our non-HFSS Hula Hoops Puft range and Penn State.
As the number one branded player in nuts, we’ve introduced key innovation in the KP brand to help drive growth in both natural and tasty nuts.
KP Flavour Kravers is a brand new flavour platform within the KP peanut range, available in big, bold flavours including Flame Grilled Steak, Smokin’ Paprika, and Fiery Caribbean Jerk Sauce. KP ‘Snack Packs’ is a new multipack format we recently introduced which offers the tasty and familiar peanuts, but in a convenient and ‘perfectly portioned’ pack, while KP ‘Nut-Tastic’ is a new range of natural nut mixes.
Do you think wholesalers have a role to play in helping retailers prepare for the legislation?
Absolutely. We’ve already talked about the need for wholesalers to support and educate retailers to ensure they’re ready for and embracing the changes. While wholesalers are exempt, there are things they can do to support retailers in making the right choices.
Wholesalers could consider introducing dedicated zones or bays for non-HFSS products for example. For CSN, our advice is always that you shouldn’t range by manufacturer but range by format because that’s how a retailer shops, whether that’s PMP, straight pack, nuts, popcorn etc. For HFSS, it would certainly make sense to have bays allocated to non-HFSS products to support retailers through the transition and make HFSS compliant products easy to identify, or even an aisle of non-HFSS products across different categories.
Using visible point of sale will also help. Our case stamp has been specifically designed to support retailers in easily identifying our non-HFSS products which should help make the CSN aisle easier to shop.
Is there potential for wholesalers to launch online tools that will help retailers identify non-HFSS products?
Yes, definitely. It all comes down to informing, educating, and driving awareness. If there’s an area in the digital shopping environment that can list out all non-HFSS products for example, across the 15 different impacted categories, this would be enormously beneficial to retailers in helping them navigate which products are and aren’t suitable.
Easily identifiable products will be hugely important to retailers successfully applying the new legislation.
Should wholesalers and retailers evolve their ranges well in advance of October or should they wait until the last minute so they can sell as much non-HFSS products?
We would recommend a planned and timely transition.
This doesn’t have to be a radical overhaul of ranges. It will require some rationalisation to focus on the best sellers to create more space for non-HFSS products moving not exempt products into aisle.
We’re here to support retailers through the transition and through the trials we’ve done help retailers understand where the hotspots are in store.
What do you suggest is the best way retail stores can use the gondola ends?
With these restrictions, gondola ends will have to be non-HFSS products so it’s important to have an appropriate promotional and activation plan to support that.
Cross category partnership could work really well with compliant products for occasions or mission based solutions whether that’s eat now, take home or Big Night In. We’re currently running a Fanta Zero and popchips trial for example to deliver exactly that.
Ultimately, we’re here to support retailers, and in turn wholesalers, in increasing weight of purchase and delivering bigger baskets.
Anything to add?
There are lots of changes in the market ranging from pandemic legacies to evolving Government policies to a perfect storm of soaring costs and spiking commodity prices leading to inflation biting hard – so utilise your manufacturer partners who have category expertise to help navigate, create certainty, and support your business through these changing and challenging times. As a supplier we have a duty of care to support our wholesale partners and our retail and foodservice customers – we are committed to doing this and doing it the right way.
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