Snacks: The Fourth Meal
New forms, flavors boost snacks sales and on-the-go appeal
Although sales and behaviors vary from country to country, snacking has become a global phenomenon. Consumers everywhere are tending to eat several smaller snacks during the day—rather than three full meals.
Furthermore, in an increasingly cash-rich, time-poor society, there is growing demand for products that are easy to buy, store, transport and eat—and actually be consumed “on the go.” It’s becoming clear, too, that consumers have rising expectations about snack availability and quality.
Traditional savory snacks now have to compete not only with sweet snacks—such as confections, biscuits and cakes—but also with a range of new alternatives developed to exploit demand for easy eating on the move. Processors in every other category—including meat, cheese, cereal and fruit products—have ramped up activity with new snack-style options.
Innova Market Insights defines the snack food market as containing traditional savory or salty snacks; snack nuts and seeds; meat snacks; popcorn and fruit-based snacks; and finger foods and hors d’oeuvres. New product activity in the category continues to forge ahead with a near double-digit rise in global introductions recorded in the 12 months to the end of March 2016. The US accounted for 14% of the total, with numbers rising slightly ahead of the average in percentage terms.
Traditional savory snacks and nuts accounted for nearly two-thirds of total global snack foods launches over the same period, but the other sectors tended to see faster growth rates in terms of launch activity, particularly fruit-based snacks, which accounted for over 17% of launches, ahead of finger foods with just over 7% and meat snacks and popcorn with about 5% each. US launch activity saw relatively high shares for popcorn and meat snacks in comparison with the global figure, but lower percentages for snack nuts and seeds and fruit-based snacks.
The US extruded and puffed snacks market in particular has benefited from the range of air-popped varieties, which feature simple, recognizable ingredients for those consumers interested in less-processed, better-for-you products.
Although potato chips continue to dominate the bagged snacks market in most countries, stiff competition—and demand for something new—have driven new product activity. This has particularly shifted to snacks with better-for-you features. One such category includes popped snacks, which include ingredients such as potato or corn flakes or other cereal pieces. Processors are learning new ways to use heat and pressure to convert these ingredients into chips or other snack forms. Since their debut, these new items are finding success as healthier, guilt-free options to standard fried and baked products.
The original Popchips brand made its US debut in 2007. It has continued to perform well despite competition from Kellogg’s Special K Cracker Crisps, Mondelez Nabisco Wheat Thins Popped, Quaker Popped and General Mills’ Chex Mix Popped. Of course, there’s also US snack market leader FritoLay (PepsiCo), which introduced its Lay’s Air Popped in 2013.
The US extruded and puffed snacks market in particular has benefited from the range of air-popped varieties, which feature simple, recognizable ingredients for those consumers interested in less-processed, better-for-you products. Popped products also have spread to other sectors of the snacks market. There are new tortilla chips, led by Balance Foods’ Poptillas; new vegetable chips, led by Popchips; and new savory/sweet combinations, such as KIND Healthy Snacks’ Popped Dark Chocolate with Sea Salt and Popped Salted Caramel bars. These also feature ancient grains.
One interesting market development came in mid-2015 with the formation of BFY Holdings. A private equity investor, Permira, acquired both Medora Snacks and Ideal Snacks Holding Corporation. Both companies are involved in the popped snacks market and have proprietary popping technology, with Medora best-known for its Popcorners popcorn/chip hybrid and its popped bean chips. Meanwhile, Ideal made its reputation as a contract manufacturer of better-for-you popped snacks.
There were a number of interesting launches in the US popped snacks market in early 2016, reflecting ongoing initiatives to move the market forward. These included the first ridged popped snacks from popped market pioneer Popchips; as well as popcorn/corn chip hybrids from Medora; and chips with unusual ingredients and flavors, such as Herr’s cassava-based popped chips in a chipotle mango flavor.
Nice to Meat You
Although they’re sometimes difficult to categorize, meat snacks are posting strong growth on a global scale. This reflects consumers’ ever growing interest in more substantial snacks for on-the-go eating.
Broadly speaking, meat snacks generally are regarded among savory snacks in the US market. Elsewhere, however, they’re categorized in a variety of sectors including meat products, chilled foods, dried foods and “lunchbox products.” Understandably, this can make the market more difficult to define and analyze. Even so, Innova Market Insights finds that total launch numbers have risen consistently in recent years. This reflects ongoing segmentation in more established markets, such as the US, as well as greater penetration in non-traditional markets such as some of those in Europe.
Meat snacks generate more than US$3 billion in sales annually in the US and are the fourth largest savory snacks category after potato chips, tortilla chips and nuts/trail mixes. The market is dominated by jerky-style products and, despite being relatively mature, has shown good growth in recent years. That’s because manufacturers have focused on a healthier offerings, more convenient packaging formats and a greater choice of flavor options (particularly hot and spicy varieties).
The sector saw an interesting new entrant in early 2015 when Hershey bought Krave Pure Foods, a maker of natural premium-style meat jerky products. The deal allowed Hershey to move into the dynamic meat snacks category and also expand its presence in the snacking sector overall. As well as taking on the Krave range of jerky products (which includes flavors such as Black Cherry BBQ) Hershey also is set to launch dried meat bars. These reportedly are scheduled for an August 2016 launch and will be feature dried meats and a combination of other ingredients such as mango, cranberries and quinoa.
Another big player, General Mills, purchased Epic Provisions in early 2016. The original Epic meat, fruit and nut bar comes in unique flavors such as Bison Bacon Cranberry and Pulled Pork Pineapple. Other new offerings include Epic Jerky Bites and Epic Hunt & Harvest Trail Mix.
During the past year, new product activity has included an increasing focus on the products’ inherently high protein content. Interestingly, the US has led this trend and meat snacks—marketed on their protein content—accounted for more than 60% of total introductions during the 52 weeks to the end of March 2016. This is well ahead of similar introductions and claims worldwide.
More Quick Bites
Finger foods/hors d’oeuvres is the smallest sector of the snacks market in terms of launch activity—accounting for 7.3% of global launches and less than 6% in the US. This possibly reflects the greater role of aperitif snacks in other parts of the world, as well as the presence of many hand-held products in the meals market rather than the US snacks category.
Even so, launch activity in the US continued to develop in early 2016. Innova Market Insights reported new items tending to split into ethnic and traditional options, with items such as spring rolls and samosas launched alongside hand-held and mini varieties of more traditional US foods, such as burgers, pizzas, pancakes and potatoes. There also is strong activity in breaded options, such as bites and poppers.
Although health often is not a key driver in snacks purchasing and consumption decisions (particularly for impulse lines), companies continue to position products on health platforms of various kinds. These claims frequently are most passive in nature with such phrases as “low-calorie,” “natural,” “whole grain,” and others.
There also are a few more active and functional claims on occasion, such as those mentioning added calcium and vitamin and-mineral fortification. Some even mention specific health benefits, such as heart health or digestive health. Innova Market Insights found that—during the 12 months to the end of March 2016—nearly 43% of global snacks category launches recorded were positioned on a health platform of some kind, rising to 72% in the US.
The majority of claims concerned passive benefits, with interest in clean labeling and “free-from” products leading the way, particularly in the US, where penetration levels are highest. Natural, no additives/preservatives and/or organic claims featured on nearly 28% of global snack launches, rising to 47% in the US.
Gluten free also continues to feature strongly, used on 16% of global launches and over 43% in the US. In terms of product and market development, the snacks category benefits particularly from the fact that many basic snacks ingredients—including potatoes, corn, soy and nuts—are naturally gluten free.
For that reason, it is a claim that is relatively easy to achieve in many instances. During the past few years, manufacturers have turned to a wide range of ingredients to replace wheat or other cereals in new gluten free applications. These new replacement ingredients include lentils, black beans, navy beans, cassava, brown rice, nuts, sweet potatoes and a wide variety of other vegetables.
As the definition of snacking continues to expand, it seems clear that high levels of new product and promotional activity continue to drive sales in more traditional snack markets. Although it appears important that manufacturers offer a relatively healthy profile, that perhaps is less of a driver in this category. Instead, this vibrant category is fueled by premium and super-premium products—often with unusual flavors and ingredients—as well as the development of existing brands, use of new ingredients and formats and new usage occasions.
Originally appeared in the September, 2016 issue of Prepared Foods as Fourth Meal.