According to Snack Foods 2013, a new Market Update from business intelligence company Key Note, the snack foods industry grew by 8.3% in 2012. This was due to growing demand for premium products and the introduction of new flavours by manufacturers.
Not only are snacks popular, but they are convenient and suitable for consumers’ day-to-day lives. Britons are increasingly snacking throughout the day. Moreover, snack foods are consumed as a meal accompaniment, generally at lunchtime, with foods such as sandwiches.
They are also enjoyed at home by consumers who are staying in to save money during the economic crisis. Thus, there is a demand for both on-the-go and sharing formats in the market.
Potato crisps are the largest sector in the snack foods market. However, the ‘other snack foods’ category experienced the fastest growth in 2012. This is due to growing consumer demand for healthier snacks and gourmet popcorn. The category that is experiencing the slowest sales growth is snack nuts.
Nuts are more expensive than cereal- and potato-based snacks; cash-strapped consumers are being forced to trade down and prioritise their spending. In the snack foods market, they are buying more economical potato crisps and other savoury snacks.
Manufacturers have responded by mixing products with other ingredients, such as dried fruits and crisps, in addition to nuts, to lower their retail value. In 2012, the snack nuts sector grew by 3.9%.
Consumers consider potato crisps and other savoury snacks to be affordable luxuries as even premium products are cheaper than many other foods in general. Moreover, a high level of promotional activity in the market and the excessive number of products available in the industry has lowered the average price of all products, including quality snacks.
Good value has helped to boost the industry’s sales. In addition, manufacturers continue to invest in their products to offer consumers new and innovative flavours, which have also pushed sales. They are keen to market products from a ‘healthier’ angle, including by reducing saturated fat and using only natural ingredients.
Despite this, consumers are fed up of dieting; they want to watch their weight but continue to enjoy their favourite foods, including snacks. This has created a niche in the market for smaller packs.
Multipacks are not only more economical than standard variants, but also help consumers moderate their calorie intake through portion control. Furthermore, they are handy to carry around as a snack or as part of a packed lunch.
Key Note expects that the snack foods industry will continue to grow over the next 5 years. Overall, it is forecast to rise by 30.5%. During this time period, the main focus in the industry will be effective marketing campaigns, the development of healthier products, and innovation.