Article: Salty Snacks -- April 2009
April 1, 2009
The salty snack industry grew slowly between 2005-2007, and a few new innovations on the market--or changes in consumers’ eating habits--indicate it might surge in the years ahead. By the end of 2007, the U.S. salty snacks market reached $16 billion in sales. According to the recent “Salty Snacks--U.S., August 2008” report published by Mintel International, the market is poised to achieve some $21 billion in sales by 2013.
Latest 2008 data suggests sales of salty snacks have benefited from the current economic turmoil, and while Mintel had previously expected growth of 4% in 2007-2008, this is now likely to reach 6%. Mintel suggests sales have benefited from increased entertainment at home. In this respect, sales will have tracked with sales of alcohol for at-home consumption, another area benefiting from people eating out less.
Despite good growth in many sectors in 2008, sales are unlikely to continue to grow at the same pace, and as consumer behavior settles, so will salty snack sales. The main question for salty snack providers: how will sales suffer when consumers return to eating out and entertaining out? Now is the time to start to develop customer loyalty, given that this is likely to be a time when consumers may try new varieties to enhance the at-home experience.
Salty Snack Segments
Mintel divides the salty snacks market into eight separate segments: potato chips; tortilla chips; snack nuts and seeds (including corn nuts); popcorn; pretzels; extruded cheese; snacks; corn snacks; and other.
Potato chip sales have been unimpressive over the review period, and any reversal in fortune (aside from the recessionary sales spike) is unlikely to continue, as the salty snack with the largest share of sales also has one of the poorest nutritional profiles.
Baked tortilla chips have seen some growth, as have those chips with other “health halos” (e.g., low-salt, low-fat), but the market is still dominated by “regular” chips. Nuts may have a healthy profile, but only when eaten in moderation, and inveterate snackers may have found that they have reached their comfort level with the snack.
Microwave popcorn is typically considered a healthful treat, especially those products with reduced butter or other fat-based flavorings. As such, the segment should have fared well over the review period. However, OSHA, FDA, CDC and EPA have all been investigating “popcorn lung,” a respiratory ailment suffered by factory workers who make the butter-flavored version of the snack. Although the risk to consumers has not been completely assessed, at least one consumer has been reported to suffer from the ailment. Slower sales may be a reaction to these concerns.
Despite some flavor innovations, pretzels are still not particularly popular among younger consumers, including children, who prefer potato chips and tortilla chips. Among children, the cheese snacks segment is popular, and baked cheese snacks have gained ground, as parents seek ways to provide their children with better snacks. There has been little innovation, in part, because the product is so child-focused. Changing the iconic “orange cheese” formula could heighten the risk of losing a core constituency, without gaining a new customer base.
Corn snacks saw slight growth at the end of the review period, in part because of innovation, especially in new flavor concepts. Limited innovation and consumers’ perception of this product as unhealthy are expected to contribute to a continued sales decline.
Healthier segments, such as trail mixes and vegetable chips, are growing, while pork rinds (popular in the low-carb diet era) and onion rings (lacking in healthiness) are declining.
In Mintel’s exclusive consumer research, 60% of respondents say they are interested in healthier alternatives to salty snacks, such as pita chips and crackers. This suggests some consumers are willing to trade salty snacks for other salty products--at least some of the time.
Crackers have an image of being healthier than salty snacks. Innovations in the segment include products made with whole grains and those that are trans fat-free. While many salty snacks are also trans fat-free, the pretzel segment is one of the few to offer whole-grain items.
The line between crackers and salty snacks has been fading, as cracker manufacturers introduce products positioned more as “snacks” than as meal accompaniments.
Healthy snacks, such as fresh fruits and vegetables, granola bars or dried fruit snacks, do offer some competition for salty snacks. These products fulfill the “snack” part of the equation, and they do present healthful alternatives. However, they fail to satisfy the “salty” urge driving salty snack cravers to seek chips or pretzels.
The rivals do overlap: some salty snack segments (pretzels, nuts) are also considered healthy snacks, and consumers intent on eating more healthfully may make efforts to move away from the “empty calories” of chips and tortilla chips in favor of “better-for-you” pretzels and nuts.
There are few households in which some type of salty snack is not consumed, testifying to the universal appeal of this class of products. However, parents of younger children are advised not to give them hard, crunchy food, so their snacking habits are more restrictive than those of older respondents.
Consumption of almost all salty snacks declines with age, with consumers’ consumption of many salty snacks dropping around age 45. Those aged 65 and older have the lowest incidence of consumption for any salty snack. Snacking habits vary by age, race/Hispanic origin and by the presence of children in the home. Consumption is higher than average among black and Hispanic respondents and among respondents with children under age 18 at home.
There are two key times for snacking on salty snacks: as an afternoon snack (after lunch) and as an evening snack, and respondents who eat salty snacks do so on average 4.5 times per week. Children and teens who eat salty snacks do so approximately 5.5 times per week, and they eat snacks in a pattern similar to adults: primarily in the afternoon after lunch and in the evening. Parents are making efforts to curtail their children’s consumption of salty snacks, probably because of the high levels of salt and fat most contain.
The two top innovation trends in the salty snack market relate to health and environmental issues. Health issues are obvious: manufacturers are trying to give salty snacks a higher health profile by launching snacks low in (or free from) fat, trans fat, cholesterol, salt and other “bad-for-you” ingredients. They are also trying to include more “good-for-you” ingredients, such as whole grains and added nutrients.
Environmental issues include preservative-free, all-natural snacks, those that can be “sourced” from organic or natural sources and even those that guarantee a smaller carbon footprint. However, the last claim--and related “green” claims--are the exception, rather than the rule.
Losing out in salty snack launches are those aimed at young people. Innovators are avoiding this segment, unless they can devise healthful options that meet with children’s picky tastes and parents’ even pickier health requirements. pf
This article contains information from the Mintel report “Salty Snacks--U.S., August 2008.” Please visit http://reports.mintel.com for more information or call Mintel at 312-932-0400.
www.kidshealth.org/teen/food_fitness/nutrition/healthy_snacks.html -- Advice to parents and young people on smart snacking choices
www.cscoutjapan.com/en/index.php/veggie-sweets-and-snacks-get- fashionable -- Veggie snack trends in Japan
www.mintel.com -- Mintel International