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COVID-19

Friday Round-up (6/26/20): Unpacking Snacking in the New Normal


Every week FoodLogiQ will be aggregating the latest updates and resources for food businesses navigating the coronavirus disease 2019 (COVID-19) pandemic. Learn how the industry is adapting to protect and feed consumers while building resilience in the face of global crisis.

According to a recently released Global Snack Food Markets, 2020-2030: COVID-19 Impact and Recovery report, the global snack food market is expected to, “grow from $210.4 billion in 2019 to $215.9 billion in 2020, at a compound annual growth rate (CAGR) of 2.7%.” While the market continues to grow, year-over-year growth is lower than expected. This reduction is likely due to economic slowdown experienced across the globe in the face of the COVID-19 outbreak and subsequent virus suppression measures. The general dip in growth is expected to be temporary, however. According to the COVID-19 Impact and Recovery report, the market is “expected to recover and grow at a CAGR of 7% from 2021 and reach $264.8 billion in 2023.” The report also shows that Asia-Pacific accounts for the majority of the global snack food market at a whopping 56%, while North America holds 25% of the market.

However, not all companies are impacted by the reported low growth rate, as consumers have also sought comfort and familiarity during this stressful time. Many are eating at home at much higher rates, which is benefiting major snack brands, according to Food Business News. Kellogg saw cracker sales jump nearly 40% in March over the prior year, while PepsiCo brands such as Lay’s and Tostitos are up 32% and 42%, respectively, based on reporting from Mintel, Chicago.

Snacking products are also continuing to diversify, as healthy snacking has been trending. The Global Snack Food Markets, 2020-2030: COVID-19 Impact and Recovery report shows that brands are reducing artificial dyes and increasing the use of natural ingredients. This is reportedly due to increasing consumer health concerns, which is in turn, “increasing the sales of products with natural ingredients, additives and coloring agents.” Protein, whole grains and fiber have also played a role in current snacking trends. Consumers are staying home and looking for snacks that address a wide array of needs. According to Mintel, these ranges in behavior are pushing the industry to develop a range of products.

“Snackers primarily do so to satisfy cravings, meaning salty snack brands will need to continue to deliver on — and even bolster, for some segments — indulgence,” Beth Bloom, Associate Director of Food and Drink at Mintel, Chicago noted. “At the same time, consumers are looking for lower-guilt snack options that can contribute to health. Both don’t need to be achieved in one catchall snack.”

Some companies are using this as an opportunity to offer a range of purpose-driven snacks that address specific needs, while also maximizing convenience. For some companies, this means addressing health benefits or developing new and exciting flavors. According to Food Business News, “Frito-Lay North America, a division of PepsiCo, Inc., is predicting a continuation of unexpected flavors, global inspiration and health benefits to influence snack innovation in the coming year.”

Research shows that focusing on flavor may be a winning strategy. Consumers reported that flavor is extremely important when choosing a snack, with 79% saying flavor is more important than brand, according to Mintel. When choosing healthy snacks versus taste, 52% voted for taste, and almost as many were positive on trying new flavors. New flavor combinations like, “next-level herbal, vegetable and spicy flavors,” as well as a sour-spicy or spicy-sweet may drive demand in this category, suggests Mintel.

Other flavors that we may see include red chili pastes like gochujang, cayenne peppers, and tajin, as well as citrus flavors like yuzu, grapefruit and blood orange.

Resources

Please view FoodLogiQ's COVID-19 Food Industry Resource Center for industry-specific updates, resources and information.

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Posted by Julie Brown on Jun 26, 2020 5:44:40 PM

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