Snacks are enjoying rapid growth, turning meal times on their ends. As dining habits change to grazing all day long, snacks are rising in importance in terms of meal occasions and frequency. Their popularity is driven by the quickening pace of life, and soaring personal and professional demands that leave many consumers with little time to cook. Households are smaller, allowing for more flexibility around meal times and sizes, and the growing acceptance of snacks as part of a healthful diet are prompting consumers to broaden their definitions of snacks and to consume them more often.
Market channels and where and when we snack are also changing. Conservatively, snacks are eaten at least once a day by nearly 83 percent of Americans in 2016, versus 73 percent in 2014, according to research from Technomic. Roughly 53 percent of consumers say they snack between meals, compared with 41 percent in 2014, the research finds.
"Consumers’ lives are busier, so snacks are serving more needs than in the past," notes Kelly Weikel, director of consumer insights at Technomic. "To gain share, snacks must adapt to meet consumers’ wide range of needs — from tiding them over to the next meal to replacing meals to providing nutritious, supplemental treats."
Technomic's 2016 snack report goes on to say younger consumers drive on-the-go snacking. Forty percent of snacks are consumed away from home. Consumers want satiety and tasty flavors but, most importantly, favor more nutritious options and "better-for-you" ingredients.
Innovation is more targeted, and product variety and kids' snacks are greatly impacting snack choices, explained Sally Lyons Wyatt, executive vice president & practice leader for client insights at IRI Worldwide, Chicago, during a recent webinar on the State of the Snack Industry.
"The snacking universe is still vast, mini meals are occurring across the day and life stages and wellness plans impact snack choices," she said. "Millennials and boomers are the biggest drivers of growth, and the role of snacking varies. Retail dollar growth of snacks is up 2.9 percent versus a year ago, but growth of foodservice snacks, at 3.9 percent, is outpacing retail," she noted. "Refrigeration was a clear theme in 2015, pointing toward the quest for fresh."
She predicts 2016 opportunities in:
- The kids segment, because households with kids snack more frequently in larger quantities
- Product varieties
- Wellness and clean ingredients
- Shifting purchase channels
- The internet's gain in penetration
"Consumer attitudes and behaviors are opening up additional growth opportunities, including those for natural/organic products, and opportunities will be abundant," she summed.
Snack time all the time
What's more, there's no bad time for a snack. NPD Group says snack foods consumed during a meal are inspired by items already in the house, and times of day factor into whether consumers will go for certain foods and beverages. Evening hours prompt stressed snackers to munch more on sweets like candy, chocolates and ice cream. We tend to reward ourselves at these hours, which shows how emotionally involved we are with sweets, NPD adds.
In the afternoon, savory snack foods such as chips, pretzels, meat snacks and nuts come into play, many of which are consumed alongside or prior to main meals.
Snack foods with better-for-you claims perform best earlier in the day. Sugars − topping the list of foods to avoid − are easier to ignore earlier in the day. Marketers wonder if they should reformulate products to use sugar alternatives to attract consumers during earlier day parts, NPD points out. "The fact that we're seeking more natural or 'clean' ingredients, the best action may be to win with consumers when they're most willing to consume the sweet foods they already love."
Likewise, Packaged Facts sees a strong ready-to-eat popcorn/caramel corn market, with alternative non-potato chips leading the salty snack segment in 2015 sales. Both RTE popcorn and non-potato chip categories can be better for you, and provide a modicum of indulgent satisfaction most snackers still crave, says the company's "Salty Snacks Report, 4th Edition."
The salty snack category in 2015 also saw a proliferation of flavors hitting store shelves, from Tom Yum soup-flavored pretzels to sweet-and-salty combinations on potato and tortilla chips. The salty snack market should hit $27 billion by 2020, the report says. Potato chips are still the top revenue generator, despite challenges from ready-to-eat popcorn and caramel corn and alternative fruit and vegetable chips.
Mid-day munchers and evening snackers alike might want to check out new Popchips Ridges from Popchips, Playa Vista, Calif. The thick-cut chips have 72 percent less fat and 55 percent fewer calories than conventional ridged competitors, Pop Chips says, but are crispy, crunchy and come in four flavors. They also use about one tablespoon versus a cup of oil in regular chips, and will roll out nationwide in June.
Globally, the pretzel market is seeing steady growth due to more healthy pretzel versions in a range of flavors, and coming from more brands, especially private labels. Technavio analysts' latest report indicates the global pretzel market should exceed $7 billion by 2020, growing at a compound annual growth rate (CAGR) of more than 2 percent.