The total size of the snack market in Turkey is $1.6 billion, while the ‘salted snacks’ category is worth $230 million. Heading the list of those who are enjoying this market’s 40 percent annual growth comes Frito Lay. The company’s new general manger Fahhan Özçelik says: “Turkey still has some way to go, particularly in salted snacks.” The company is planning to double its turnover over the next three years to $400 million.
The Frito Lay company was born in 1961 when two entrepreneurs -- one producing potato chips, the other corn chips – joined forces. The company currently has annual worldwide sales of over $14 billion. It produces 2.5 million tons of snacks per year and is active in 120 countries.
Last year the total turnover in the Turkish ‘salted snacks market’, which includes potato and corn chips, was $230 million. Frito Lay is the leader of this very lively market with a market share of 77 percent. The company plans to continue with this success in 2005 under the leadership of its new general manager Fahhan Özçelik. We spoke with Fahhan Özçelik about the salted snacks market, Frito Lay’s plans for the future and the structure of the market.
There is no detailed information about the salted snacks market. Could you give us some information about the size and structure of the market in Turkey?
When I talk about the ‘salted snacks’ category I mean potato and corn chips. We are currently the market leader in the salted snacks business in Turkey with a market share of 77 percent of a market which has a total turnover of $230 million. In terms of sales volume, in 2004 we sold 30,000 tons. The size of the total market was around 39,000 tons. We grew by 34 percent in this category in 2004. Compared with the previous year our growth was 47 percent. When considering our field of activity, one should not just look at the salted snacks category. In fact, we are active in the macro snacks market. When we talk about the macro snacks market then this also includes biscuits, crackers, chocolate and dried nuts and fruits. In 2004 the macro snacks market grew by 40 percent. We rank third overall in the macro snacks market. First comes Ülker. Second is Eti and then come us. We have a total market share of 13 percent. The size of the entire market is around $1.6 billion.
What is the per capita consumption of ‘salted snacks’ in Turkey? How does this compare with other countries in the world?
In 2001 per capita consumption of salted snacks in Turkey was 340 grams. At the end of 2004 it had risen to 560 grams. So we can say that it approximately doubled in size. But we are still far below the global average. Even in Saudi Arabia, which is smaller than the Turkish market, per capita consumption is 1.1 kilos, while in the UK it is 4 kilos and in the US 6 kilos.
You have four brands on the market. What is the current market situation of these brands?
Yes, as you say, we have four brands: ‘Doritos’, “Lays’, ‘Ruffles’ and’ Cheetos’. The market began to grow after 2001. We have doubled the size of our operations since that date. Our brands have grown in parallel to this increase. In fact, one should look at each brand in its own category.
We have brands in three categories. These are potato chips, tortilla chips and products made from corn farina. Ruffles and Lays potato chips each have a market share of 32 percent. If we look at the Doritos group in the tortilla chips category then we see that it has a market share of 80 percent. Cheetos is a product which is primarily aimed at children.
These brands have developed considerably over the last four years. Four years ago Cheetos had a market share of 20 percent. As a result of these developments it has increased its market share to 50 percent.