Potato Chips Selling But Will Slow

October 8/Telecommunications Weekly -- A new report from market research firm Mintel shows that after years of mediocre sales increases, the potato chip market grew 22% during the economic downturn*.

In addition, other salty snacks experienced recession-fueled sales jumps. The tortilla chip market increased by 18% since 2007, while smaller segments like popcorn and cheese snacks saw similar gains (17% and 20%, respectively). Now that economic recovery is starting to take hold, Mintel believes, sales increases should start to taper. Over the next five years, potato chip sales are expected to rise just above 3% annually, while tortilla chip sales should increase just above 4%.

"People bought more chips during the recession because they're a good value," explains Chris Haack, senior analyst at Mintel. "As the economy gets stronger, we expect annual sales increases to slow, but we don't expect markets to contract. New product innovations and the changed eating habits of many Americans will keep shoppers headed towards the snack aisle."

Mintel's Global New Product Database (GNPD) has already tracked over 350 new salty snack launches in the U.S. this year. According to Mintel, 50% of kids, teens and 18-24s say they eat salty snacks five times a week or more. Even adults say they eat salty snacks 4.8 times per week on average, nearly once a day.

"Salty snacks are clearly embedded in American's style of eating, and they're used by all ages as a way to curb off hunger between meals or after dinner," explains Haack. "But at the same time, there is growing interest in healthier snack options."

Mintel's survey shows that two in three (65%) adults say that they are interested in healthier snacks, such as grain or baked varieties, while another 57% say they are interested in healthier alternatives to salty snacks, like pita chips or crackers. Admittedly however, half of survey respondents confess they think lower fat/sodium snacks do not taste as good as the originals.

*Sales increases compare 2007 market data against Mintel's market estimate for full-year 2009

From the October 12, 2009, Prepared Foods E-dition