For all the stories charting the downfall of sugary snacks such as chocolate and sugar confectionery, as well as countless resolutions made to improve diets, the song remains the same: people still want snacks. Subsequently, the world of sweet and savoury snacks is an exciting one to be in at present, outperforming the rest of the packaged food market. So exciting, in fact, that many chocolate confectionery manufacturers, such as Hershey and Mondelez, are migrating to the category to see what all the fuss is about.
So what are the main points revealed by the launch of Euromonitor International’s new sweet and savoury snacks data?
- Impressive performance from Pepsi sees the company consolidate its position as global leader
- Meat snacks grow rapidly in countries where confectionery is struggling
- Snacks becoming more versatile in order to appeal to diverse consumer demands
- A busy year of acquisitions sees the entrance of several food titans
Snacking reimagined for different groups
Sweet and savoury snacks is a versatile area incorporating a broad range of products. Almost universally, there has been substantial growth across the snacking spectrum, with impressive 9% value growth achieved in the category overall in 2015. Despite not reaching the same heights, it will be encouraging to manufacturers to note that value growth in the key Western European market was strong, at 5% in 2015. In this market, manufacturers have successfully pivoted snacks to appeal to a wide range of consumers. Nuts, for example, are currently experiencing a boom due to Europeans’ increased penchant for high-protein consumption; for similar reasons, meat snacks – present in other sweet and savoury snacks – have also performed very strongly, with brands such as Jack Link’s and Slim Jim achieving 8% and 15% value growth respectively in 2015.
Global Sales of Snacks 2015-2020 (US$ million) and % CAGR 2010-2015
Source: Euromonitor International
The growth of these snacks, which are popular amongst health-conscious and gym-going portions of the population, represents a repurposing of sweet and savoury snacks. More consumers, especially millennials, are eating fewer meals and snacking more instead. It is only natural, then, that they are becoming more concerned with eating healthier snacks. It is interesting to note, for example, that meat products are vastly outperforming crisps and confectionery in the UK and US, two vital sweet and savoury snacks markets. Companies are taking note, with Hershey starting to edge its way into meat snacks by acquiring Krave Jerky. It seems likely that more companies with a strong presence in unhealthy snacks will move into these new product areas; they are fast growing and their competitive environments are much more fragmented than that of confectionery.
Gradual shift, rather than sea change
Smaller manufacturers tend to be able to achieve more innovative product developments than their larger, multinational rivals. However, that said, PepsiCo has performed extremely impressively in the past year, adding one percentage point to its sweet and savoury snacks value share. PepsiCo provides an interesting case, as the vast proportion of its sales derives from its crisps and tortilla chips brands. Given that four markets (Japan, China, the UK and the US) account for 56% of global value sales of sweet and savoury snacks, PepsiCo has been able to benefit from substantial growth in crisps and tortilla chips in Japan and China, despite relatively unspectacular growth in the US and the UK. In Japan, these two products saw their value sales grow by 3% and 5% respectively in 2015. The company appears happy to continue generating sales through its strong brands, such as Doritos and Lays, in these countries, whilst expanding into the fast-growing Latin American market and ignoring meat snacks.
However, it too has prioritised the creation of healthier snacks, and has made significant investment in patents for cooking technology to help achieve this goal. There will always be a market for crisps and tortilla chips; indeed, they generated US$41 billion in global sales in 2015. Whilst the market has not changed, changed utterly, 2015 is a signpost pointing to the future: it is definitely snacking, but not quite as we know it.