“We have now multiple reasons for snacking. So, the reason to snack is no longer just the indulgence of snacking. Now, we do it too for various nutrition reasons, allergen concerns, [or] health benefits. So, the functionality within snacking has just exploded.”
Healthier and allergen-free options driving market growth
Spurred by the need for on-the-go foods and rising awareness of healthier snacks, the US snack market was worth $144.6bn in 2021 and is expected to grow by a 3.3% CAGR from 2023-2030, according to Grand View Research. Consumers' busy schedules and snacks serving as a meal replacement are also driving the growth in the market.
“We're seeing in the category of snacking, day parts and occasions ... bringing another dimension to this category, which is ultimately what the consumer is looking for as their busy lives are evolving, and they're looking at different needs to be met and different parts of the day,” Fotovat said. “I think that's a growth area that we are going to see over the next few years as brands figure out what is it that the consumer needs and is looking for during those day parts and how can they best deliver those.”
Many consumers are also looking to the snack space to address a food allergy or sensitivity, which has been a growing segment of the market. The allergen-free food products market is estimated to reach $108.3bn by 2030, growing at an 8.9% CAGR from 2022-2030, according to Market Research Future.
To meet the demand for allergen-free, Riverside Natural Foods has a large R&D team designed to develop new products and continuously improve the existing MadeGood and GOOD TO GO products on the market, he said.
“We still have to win on taste. We still have to win on nutrition. We still have to deliver on what consumer problem are we solving around a day part, need, or an occasion,” Fotovat said. “For us at MadeGood, it's about making it inclusive, so that anybody whether you have a nut allergy, a dairy allergy, or a ... wheat allergy, you can enjoy snacks without sacrificing on taste.”
Growing business, anticipating private-label challenges to the category
While founded in 2013, Riverside Natural Foods is still "building the foundation" for its business, and despite challenges to capital and higher costs of doing business, the company is focused on "investing in the future," he said.
“I am a big believer in making sure the fundamentals are there. For us as a business, it's all [about making] sure the base is strong, then we can build on it,” Fotovat said. “By that, I mean continually looking at price-pack architecture, formulations, product offerings, because the more we focus on fine-[tuning] our offering, the better we're meeting consumer needs as well as making our retailers happy.”
Snack brands are also seeing consumers trade down to private-label brands, creating another challenge. However, Fotovat doesn’t see private label as a threat to his business, instead seeing it as a way to give consumers more options, which in turn grows the category.
“I think private label plays an important part in the snacking category. It's an option for the consumer. I always advocate for optionality for the consumer. I think that's a good thing for the category. It's another point of competition. It keeps brands focused on delivering something above and beyond just a cheap and cheerful product... We all can live together, and we all can grow the category.”