When you’re in-between meals and feeling a little hungry, chances are that you’ll reach for a snack. With manufacturers located near key places of supply for snack foods, such as almonds, walnuts, corn, or wheat, 1 in 4 snack food manufacturers in the US is located in the West.
The US snack food industry has an estimated value of $124 billion according to Statista and has experienced 3.7% annualized growth from 2011-2016.
The snack food industry has definitely benefited from increased demand levels as the economy has strengthened from the recession years of 2007-2009. With more disposable income available to households, consumer spending has risen for more snacks. According to IBIS World, sales have been boosted in particular for potato and tortilla chips, along with nuts and seeds. What does this mean for future snack food industry trends?
Embracing the Rediscovered Charm of Natural Snack Foods
- 64% of North American consumers report that they shop for snacks when they visit the grocery store.
- Almost 90% of adults feel that foods which are fresh and refrigerated are a healthier purchasing option that prepackaged snacks.
- 78% of consumers are making a strong effort to eat more fresh versus processed foods.
- Over the past 10 years, the consumption of fresh foods has grown by more than 20%. By 2018, fresh breakfast eatings are expected to jump 9%; lunch, 7%; and dinner, 5%. Fresh eatings by Millennials and Gen Z consumers will increase 11.1% and 7.5%, respectively according to the NPD Group.
- Look for the snack food industry to create more marketing opportunities that specifically target the Hispanic demographic. Hispanics spend $450+ more per year on fresh foods and 41% of that spending is on fresh foods.
- Because of this, look for an expansion into single-serve fresh snacks like celery and cucumber, which have seen double-digit percentages of sales growth in the past 5 years.
- 75% of Millennials associate meat with protein and iron; 62%, with energy; and 53%, with building physical strength, so snacks that can be linked to these fresh foods can also see a boost in sales as well.
- 1 in 5 of the bestselling new foods/drinks introduced in 2013 touted a “fresher flavor” claim, according to reporting from IFT.org.
Snacks used to be something that you opened up from a box. Today snacks are something that you pick up from the produce or deli section of the grocery store or you make at home when you have some spare time. The food industry as a whole is seeing a lot of growth, but snack foods are seeing even more when they can be marketed to the changing tastes of Millennials especially. Single-serve fresh snacks are seen as a healthy option, especially when compared to processed foods or candy, and that is attracting higher price points and revenues.
Changing Lifestyles Mean Changing the Snack Food Industry
- Nearly half [47%] of all snack eatings occur alone. Even when a person lives in a household with multiple individuals, 39% of eating occasions occur alone.
- In 2013, 15% of all eating occasions involved foods/beverages eaten within an hour of purchase. Millennials accounted for 40% of these eatings.
- 27% of the best-selling new foods or beverages that have been introduced since 2013 were either bit-sized or hand-held products. Another 21% would be classified as either ready to use or ready to go.
- 40% of those in the 18-24 age demographic and 34% in the 25-34 age demographic believe that a vending machine is a viable snack option.
- Men are more involved in snack purchasing, food preparation, and other aspects of the snack food industry more than every before. In 2014, men were the primary food shopper in 43% of households. 46% of men helped with meal preparation in 2014 versus 38% in 2001. Many households now have multiple meal preparers.
The snack food industry must be able to adapt to the changing lifestyles of consumers today. Men are embracing more of a role at home, especially with food, and this means the industry must market products to them to generate their interest. Millennials and the Gen X’ers are also more active than ever before, which means they are looking for snacks that are easy to consume, yet are still fresh in nature. People are purchasing snacks with the intent to eat them right away. When these needs can be met, the potential for more revenues in the next 5-10 years could be enormous.
The Snack Food Industry and Reasonable Snacking
- In the past decade, the number of snacks that people are eating between meals has grown from 1.9 snacks to 2.8 snacks. More than half [51%] of adults are eating 3+ snacks per day.
- In 2014, 28% of adults reported eating four or five mini-meals a day. 1 in 5 adults say that they just grab whatever they can to eat as they are going out the door. This is causing the line between “meals” and “snacks” to blur and this is expected to continue over the next decade.
- Snacking in the afternoon is most common [68% of adults], but snacking happens throughout the day. 46% of adults say they eat snacks in the late evening. 1 in 3 adults will snack in the morning. 18% say that they eat snacks in the early morning. Each category has seen double-digit percentage growth in the last 5 years.
- 50% of snacks that are consumed today involve both food and a drink. Just 17% of adults say that they consider a drink to be a snack food.
- Sales of savory snacks increased 1.1% in 2013, sweet snack sales declined by 2.1%, continuing a five-year trend from the latest data available.
- 50% of adults say that their personal health is an important selection factor when choosing a snack. 45% are looking for snacks that go beyond basic nutrition. 20% of adults buy snacks for an energy boost or to improve their mood and 17% buy snacks that are specifically designed to manage weight.
The trends the snack food industry are seeing is that foods which are considered to be sweet are seen as more of an indulgence than a necessity. Salty and savory snacks are seeing a boost in sales, but chocolate and ice cream are still seen as a snack that would be chosen above others. With that being said, the lines of snacking are clearly blurred. US adults said that they would choose fresh fruit, a sandwich, cheese, vegetables, and cereals as a top snack choice if it were available to them as well. The two top characteristics of a snack that are preferred today are “fresh” and “flavorful,” so if portion sizes can be designed to meet an active lifestyle, reasonable snacking can be achieved.
The Snack Food Industry and Exclusion Diets
- 33% of US adults have tried a specific exclusion diet in the past year. The most popular trend is to eat gluten-free foods, but being dairy-free, lactose-free, or eating raw foods are also popular.
- 17% of US adults report that they are attempting to follow some form of a meatless diet regimen, with the 18-24 age demographic the most likely to embrace this exclusion diet.
- Another 17% of US adults choose snacks based on their medical food restrictions because of allergies, food intolerance issues, or because of a permanent condition such as celiac disease.
- Food allergies cannot be ignored by the snack food industries. Allergies in children are on the rise as 4.1 million kids under the age of 17 suffer from true food allergies. Food intolerance, according to Euromonitor, is the second-most growing global positioning for functional foods.
- Sales of bakery snacks grew 16.8% in 2014, making it a particularly profitable and popular part of the snack food industry.
- Many consumers are also thinking local instead of global when it comes to their snacking options. 29% of consumers in a 2014 survey reported by IFT.org stated that they were purchasing more local foods. 28% reported an emphasis on purchasing organic products. 23% stated a preference for more non-GMO food offerings. 40% of US adults say they are trying to avoid GMO-foods.
- In 2014, 73% of adults and 86% of Millennials used organic food/beverages, with Hispanics the most likely demographic to seek out natural foods.
Whole foods are going to continue to be a point of emphasis for the snack food industry. Fiber and whole grains are the most sought after food ingredients right now and that will continue to expand. Consumers want real foods, fresh foods, and items that have some sort of a vegetable health benefit. 4 in 5 adults says that a full serving of fruit or vegetables in a snack is important to them. Look for increased offerings that provide this in products like bread, juice, and even cereals as a way to market to the changing needs of consumers. The snack food industry is strong and will continue to be as long as the economy is able to grow, so unless there is another downturn as there was in 2007-2009, the next decade looks bright indeed.