Healthy snacks grow at expense of less healthy options, report
consumers turning away from carefree snacks, and opting instead for
healthier products, according to Snack Food Trends in the US, a new
report by Packaged Facts.
Published this month, the report reveals that the nation's snack food market reached $61.4bn in 2005, a moderate increase of 1.5 percent from the previous year's figure of $60.5bn.
But the market has witnessed some internal shifts, with sales of "carefree" snacks such as cookies and baked goods falling to make way for an increase in demand for better-for-you options.
According to the report, sales of cookies and bakery snacks suffered the most, plummeting $334m from 2001-2005. The crackers and popcorn/rice cakes segments each experienced losses of $45m.
But the trend for healthier eating has been a boon for other segments, with yogurt snacks leading in dollar growth with gains of $721m. Food bars and nut snacks also saw healthy gains during the five year period, in which greater emphasis has been placed on heightened 'natural' and nutritional tags such as 'no trans fats' and 'nothing artificial', said Packaged Facts.
But the report notes that "American consumers are ambivalent and often hypocritical in their nutritional attitudes, and the cast of nutritional villains (calories, fat, sugar, carbs, portion sizes) keeps shifting."
"Nonetheless, future sales growth should fall disproportionately to marketers that can give consumers their snack cake and let them eat it in good conscience, too. Even if convenience is king in the snack market, convenient good nutrition is more likely than bite-sizing or crush-proofing to provide an enduring competitive advantage and point of product differentiation."
According to the report, when it comes to product sales through mass merchandisers excluding Wal-Mart, as tracked by Information Resources Inc, salty snacks form the largest snack food category, with a 22.5 percent market share. These are followed by 'snack candy', which holds 20.5 percent of the market.
Cookies and bakery snacks come in next at 17.2 percent, followed by crackers at 9.9 percent, yogurt snacks at 9.5 percent and food bars at 5.8 percent. Other categories examined by the report include nut snacks, fruit snacks and dried meat snacks.
"In the last five years, snacking overall has increased by 1.5 percent as the trend for meals being replaced by snacks continues to grow," said Don Montuori, the publisher of Packaged Facts.
"Consumers, are serious about these 'meals' being healthy. Simultaneously, manufacturers are serious about meeting consumer, watchdog, and governmental demands to make snacks more nutritious-particularly those aimed at kids. These factors are driving a fundamental industry shift which should expand it while making snacking healthier," he added.
Indeed, the shift in the industry is following growing concern surrounding the nation's obesity crisis, which has spawned a "public relations crisis" for food marketers, said Packaged Facts.
And this has been exacerbated by the success of the movie Super Size Me, which chronicles a month-long journey of fast food consumption. In fact, the snack food industry has started rethinking some of its marketing practices in light of these concerns.
Both Kraft and PepsiCo, for example, have voluntarily altered their marketing to children, and have pledged to stop marketing to younger children and to limit portions on products sold in schools.
During the past few years, government initiatives spurred by consumer advocacy groups and parental concerns have shone a spotlight on the real need for healthier packaged snacks for kids. As a result, marketers have been rushing to come up with nutritionally enhanced products, whether new or reformulated, while also scrambling to show how even not-so-healthy snacks can still fit into a healthy diet, at least in moderation.
"Because kids snack even more than adults do, it is critical that snack makers maintain a hold on this young demographic, and attracting kids to the healthier products without severely cannibalizing sales of more traditional, not-so-healthy snacks will be the fine line that marketers will have to walk in the coming years."