In the U.S., busy white-collar consumers will pay a premium for snacks that offer convenience, indulgence and health properties.

Despite a moderate slowdown in growth forecast by Euromonitor International, there remain some hot growth prospects within sweet and savory snacks, with certain categories and regions set to outperform the sector, as a whole. These hot spots should not be overlooked by manufacturers aiming to expand their consumer base beyond their traditional markets.

Sweet and savory snacks are forecast to grow at a compound annual growth rate (CAGR) of 2% in retail volume terms between 2009-14, according to Euromonitor International’s predictions. This represents a moderate slowdown in sales compared to the 2004-09 period, when sales grew at a 3% CAGR.

This moderate slowdown stems from maturing consumer demand in developed regions (namely, North America and Western Europe) and increasing consumer concerns about health and diet. Furthermore, sweet and savory snacks are predicted to lose ground to snack bars and, to a lesser extent, fresh food--both of which are considered healthier alternatives in most developed countries.

In contrast, a transition from unpackaged to packaged snacks in emerging regions is set to underpin increases in global demand. This will be particularly true in fast-growing economies, like China and India, where retail volume sales of sweet and savory snacks are set to increase by 27 and 68%, respectively, over 2009-2014.

Euromonitor International highlights three key opportunities where sweet and savory snack categories are forecast to perform well above average. Manufacturers should pay special attention to these countries/categories, when formulating their future expansion strategies for the medium- and long-term.

Opportunity #1: India and Extruded Snacks
Extruded snacks in India mainly consist of corn-based snacks, with Kurkure and Cheetos accounting for the overwhelming majority of sales. Potato-based snacks are also common, in the form of Pringles, Piknik, Peppy and some Bingo! variants. The remainder of sales are accounted for by other types of products, like processed rice and processed soy.

Extruded snacks are predicted to see sales increase by almost 100% in retail volume over the 2009-2014 period. Rapid economic and population growth is set to fuel expansion of these snacks in the country, albeit from a relatively reduced consumer base.

Manufacturers targeting the upper end of the market are forecast to increase the value of their products through the development of low-fat snacks and new flavor combinations. Conversely, promotions and private label offerings through supermarkets in heavily populated areas will underpin the growth of these products among less-affluent consumers, driving retail value sales through greater volume sales. Overall, extruded snacks in India will likely become highly polarized between premium and economy offerings.

Opportunity #2: Fruit Snacks in the U.S.
Fruit snack sales in the U.S. are predicted to grow by around 30% in retail volume between 2009-2014, outperforming all other sweet and savory snack categories. While generally higher food costs and the need to stretch budgets will likely continue to weigh heavily on sales until the U.S. economy properly recovers, the trend towards premium-positioned gourmet snacks and higher-quality, more nutritious products, such as nuts and fruit snacks, will continue throughout the 2009-2014 period.

American consumers regard fruit snacks as healthy and tasty, in large part because they are a convenient alternative to fresh fruit. This trend is predicted to continue over the medium-term and gain further popularity among busy white-collar consumers, who are willing to pay a premium for snacks that offer convenience, indulgence and health properties in a single product.

Manufacturers are predicted to react to this surge in demand by expanding the range of fruit snack combinations they offer, including more exotic variants. They should also increase the physical size of product formats, to expand consumption from impulse to planned purchases.

Opportunity #3: Nuts in Brazil
Sales of nuts in Brazil are predicted to grow by 25% in retail volume over 2009-2014. Increasing consumer health awareness and the general expansion of packaged snack consumption in urban areas will underpin this growth.

Awareness about the purported benefits of nuts to cardiovascular health is forecast to expand further among middle-class consumers--characterized by their higher purchasing power--in major cities like Rio de Janeiro and São Paulo. The extensive presence of supermarkets and hypermarkets in such urban areas also stands to increase the affordability of nuts, especially as private label is expected to gradually expand in the Brazilian snack market, including nuts.

At the upper end of the market, innovation is set to focus on the combination of different nut types, such as almonds and pistachios, following similar patterns to those already seen in more developed markets. The presence of fair trade and organic offerings, however, will likely remain negligible, constrained by relatively modest income levels beyond the most affluent elite and low awareness about food products featuring purported social and ethical values. pf

Francisco Redruello is an industry analyst with Euromonitor International. Euromonitor offers global market intelligence on industries, countries and consumers. It has more than 35 years of experience publishing market reports, business reference books, online information systems and custom consulting projects. For more information on Euromonitor International’s research and reports, visit