Growing consumer concern about obesity and a shift towards healthy eating are the main reasons for the drop in market value of crisps and snacks from £2.4bn (€3.5bn) in 2003 to £2.2bn (€3.25bn) in 2005, according to the Mintel report, and these factors will continue to depress the market.
Although the market will see a 4 per cent increase by 2010, reaching £2.35bn (€3.4bn), this will equate to a decline of 10 per cent in real terms when the effects of inflation in the food sector are considered.
The declining population of British children aged under 15 is also a factor driving the market down. This key consumer group has reduced by 3.7 per cent between 2000 and 2005, and is forecast to decline a further 3.4 per cent by 2010.
The report also reveals how low-fat and healthier products have fared surprisingly badly despite appearing to address mounting health concerns.
"If consumers are looking for a healthy lifestyle they are most likely to cut out crisps altogether rather than turn to a healthy variant of an unhealthy product," industry analyst David Bird told BakeryAndSnacks.com.
Many consumers also feel that taste and quality are sacrificed in low-fat variants, and others are sceptical about manufacturers' packaging claims.
But manufacturers and suppliers currently facing market saturation - 88.6 per cent of the target group of the population are already consuming crisps and snacks- could gain some growth by following a similar strategy to Walkers.
The firm's premium Sensations brand has enabled the company to extend its lead of the UK crisps market. According to Mintel, between 2002 and 2004, sales of standard crisps declined in value by 7 per cent, whereas premium crisps increased in value by 15.8 per cent.
Adults are the target consumers for this higher quality range of crisps and snacks, as they are becoming increasingly willing to spend more on a snack intended to be shared in the home rather than purchasing impulse products for quick snacking.
Manufacturers should also tap into the low carb, low glycaemic index and low trans-fat trends that drive the consumer market, says the report.
Another way to try to drive sales up is for manufacturers to launch new brands of cross-category healthy snacks, which could include fruit crisps, parsnip and other root vegetable crisps, rice based and soy based snacks and corn snacks.
Functional snack products such as those containing multi-vitamins for children or cholesterol-lowering products for adults would also appeal to consumers who perceive crisps and snacks as inherently unhealthy.