Salty snacks are evolving in the face of the better-for-you movement, Packaged Facts reports
In its Salty Snacks report published this month, Packaged Facts predicts that dollar sales of salty snacks in the US will grow at a compound annual rate of 4% to reach $29.3 billion in 2022 – driven largely by an increasing population, larger disposable personal incomes, evolving food preferences and continued desire for small indulgences.
Still, the category faces a rising threat from increased awareness about health and wellness, the report notes.
It explains: “Health concerns represent the most salient restraint on demand for snack foods and corresponding industry output. The nutritional content of many of these products has come under scrutiny and rising incidence of obesity and diseases, such as diabetes and heart disease. In addition, many consumers are wary of artificial ingredients. … As such, [salty snacks] face significant competition from snacks perceived to be healthier, such as nuts, seeds and dried and fresh produce.”
Within the salty snack segment, pretzels are among the most vulnerable with retail sales falling 0.9% to $1.25 billion in 2017 compared to $1.29 billion in 2015, according to Packaged Facts.
“For an increasing number of consumers there has been a deliberate and conscientious shift away from processed foods loaded with added or excess sodium. Well over half of all consumers are making comparisons based on sodium content when making food purchasing decisions. This shifting consumer preference has impacted pretzels for the worst as the category has struggled the past few years,” the report explains.
Some pretzel makers tried to keep consumers engaged by offering unsalted options, but Packaged Facts found household consumption of unsalted pretzels is small and declining.
Successful crossover categories between salty and better-for-you
There are some beacons of salvation within the salty snack segment, however.
One is ready-to-eat popcorn and caramel corn, which grew the fastest of the largest categories at 18.5% from $1.1 billion in retail sales in the US in 2015 to $1.6 billion in 2017. The growth spurt helped the category claim 8.7% of retail sales of salty snacks in the US, according to the report.
This growth can be attributed in part to RTE popcorn satisfying both the desire for a better-for-you snack and one that is indulgent, Packaged Facts notes.
It adds that while popcorn has been primarily premium-priced so far, it expects lower price points in the future will continue to draw in mass consumers.
Baked potato chips and chips made from alternative ingredients also are holding their own in the better-for-you movement, according to the report. It notes that baked chips are growing in popularity, but still have a lower household penetration of only about 15%.
Puffs and interestingly shaped salty snacks are borrowing from the drivers of both popcorn and baked chips, and as such are gaining momentum in the market. The report notes that different shapes and puffs offer an ‘incredibly different eating experience for snackers,” which can detract from potentially noticeably lower levels of sodium and fat.
Salty snack manufacturers also have responded to consumer desire for healthier options by cleaning up the ingredient decks of existing products. This includes removing high fructose corn syrup and trans fat and reducing sodium and fat, according to the report.
In addition to taking out unwanted ingredients, some are adding desirable functional ingredients.
For example, Packaged Facts notes, Frito-Lay filed a patent for probiotic yogurt chips in February 2017 which would include up to 20% dehydrated yogurt and live probiotics that are shelf stable for at least a month.
Other emerging better-for-you trends to watch in the salty snack space include thin and bite-sized chips, the use of ‘healthier’ oils such as avocado or olive, the addition of protein or superfoods such as chia and ancient grains, and other free-from claims, such as free-from gluten and artificial ingredients, according to the report.
Other strategies to tap into the better-for-you movement
Beyond expanding salty snacks into healthier subcategories, the report recommends that players in this space play up the benefits of their products, such as when they are made with “real food” that is “farm to table.”
For example, it notes, Kettle Brand has a “Tater Tracker” on its website that shows consumers the specific farmers who grow the potatoes in their bags of chips. Another example is Quinn Snacks, which has a "'farm-to-bag' promise [that] allows consumers to look up their individual product batch online to see exactly where every ingredient in the package came from," according to a company representative.
Building on this, Packaged Facts note, “marketers should focus more centrally on product attributes, less on brand," because “brand names increasingly resonate (or don’t) because of desired product attributes, rather than being established by marketing and advertising gamesmanship.”