After a belt-tightening 2022, many economies saw inflation rates starting to stabilize or decline towards the end of 2023, bringing much needed relief to lean pockets. However, prices remained high, which saw consumers erring toward more cautious spending, leading to unit and volume softness across most snacking categories.
“Taking into account the macro impact for the category over the past couple of years, we see that consumers have shifted gears on what, where and how they buy their snacks, and it is impacting unit and volume sales,” said Sally Lyons Wyatt, executive VP and practice leader, Client Insights, of Circana, which provided data for the SNAC’s report.
“Affordability is a high priority for consumers and they will [continue to] gravitate to those snacks that provide the most value for them.”
As such, consumers are “pulling different levers with snack choices with some buying less product, while others are downsizing to buy smaller sizes or turning to multi-packs to stretch pantry items. Some consumers are not returning to categories as often, and still others have changed where they shop.”
However, the overall salty snacks category posted a very healthy 6.9% growth to over $31.1bn in sales for the 52 weeks ending January 28.
The broader snack aisle – including cookies and crackers – clocked in $51.7bn in sales, up 4.6%. The leader was the potato chip category, which reached $8.6bn in sales, a +7.7% increase from 2023, despite a slight decline (-1.9%) in unit sales.
Lyons Wyatt said the impact on sales varied for each of the salty snacks categories, based on price, innovation, availability and consumer loyalty. As an example, she pointed to tortilla chips fans, who remain devoted to their favorite brand and are even prepared to pay higher prices.
That said, she noted “value proposition is huge for 2024.
“For overall trends, it is not a one-hit wonder with snacks. Multiple factors are impacting purchases, so producers must respond with a variety of products, sizes and channels that cater to multiple needs to continue to attract and retain consumers.”
And that’s where SNAC International’s State of the Industry Report will come to the fore.
“This year’s report takes a detailed look not just into what snacks people are buying, but why they are buying them,” said SNAC CEO Christine Cochran.
Research by Ciriana found the overall savory snacks category continually benefits from its ability to constantly refresh itself through new flavors, formats and pack sizes, with 37% of consumers of all generations – and 44% of Millennials – prepared to be more adventurous.
Peanut Butter Jelly Time and so much more
The sector is on the cusp of reinventing innovation, say the report’s authors. Multi-sensorial experiences will go beyond taste, smell and appearance to include the way a snack feels and sounds, a prime example being Campbell Snacks’ new Goldfish Chips (a mashup of the popular Goldfish shape with the attributes of a potato chip).
“When you think about the lack of innovation in recent years and slight declines in snacking volumes, it speaks to the holding power of snacks,” said Lyons Wyatt.
“Adding back innovation that drives excitement will allow producers to address all recent consumer shifts, and there will be a growth momentum.”
While the overall potato chips category remains the largest in salty snacks by more than $1bn, breaking down category-specific data reveals the $6.9bn tortilla chips subcategory increased by 9.4% in sales and 0.3% in unit sales.
“Salty snacks have bucked the trends with continued growth driven by tortilla chips,” said Lyons Wyatt.
“The taste, texture and versatility of tortilla chips appeal, and they are a favorite of the younger generations due to tremendous innovation with products.”
By their nature, tortilla chips are well adapted to take on a plethora of flavors – from spicy to savory, sour or sweet – although heating up the category in the first half of 2023 with triple-digit increases were tones like Nashville hot, spicy margarita and mango habanero.
Frito-Lay certainly courted innovation to drive growth of its Doritos brand, up 11.8% to post almost $2.7bn in sales and 3.3 in unit increases, according to Circana. This came in the form of Doritos Dinamita (featuring rolled chips), which debuted at Super Bowl LVIII in spicy flavors like Chile Limón, Flamin’ Hot Queso, Smoky Chile Queso, Fiery Lime and Hot Honey Mustard.
Other Salted Snacks – incorporating better-for-you (BFY) options made with alternative grains, higher fiber and no artificial preservatives – made huge gains, posting 3.3% growth and more than $6.6 billion in sales. Unit sales were down by a mere 0.5%, revealing a growing category.
Frito-Lay North America came out tops in this category, with its SunChips brand – which positions whole grains front and center and recently launched a black bean line – posting double-digit growth, despite price increases. Another Frito-Lay brand, Cheez-It, made a successful leap into the Other Salted Snack category with a 14.9% increase in unit sales last year.
According to SNAC’s report, 39% of salty snack consumers would purchase healthier versions if they were more available, which means producers should look at pumping up protein and energy-boosting ingredients to win in 2024: 55% of consumers place protein above all else, while seven in 10 parents and the majority of Millennials seek out pick-me-up snacks.
Private label came in with $192.8m in sales: an increase of 20.7%, but only 0.2% rise in unit sales. Volume sales were up 7.1%, suggesting consumers are willing to trade their favorite brands in favor of value.
The power of social media, unsurprisingly, remains a dominant player on the snacking scene.
It’s the cookbook of today for 32% of consumers and a source of inspiration for those following the trend of integrating snacks into a meal.
With consumers more time-poor than ever before, it’s not surprising the majority are increasingly substituting snacks for meals several times a week. However, the snackification trend has ramped up and a growing herd of shrewd consumers are using snacks as an ingredient, up 35% over previous years, according to the 2024 Frito-Lay US Snack Index. In fact, 55% of Millennials and GenZ consider themselves to be savvy snackers, while 65% creating unusual snack/meal mashups that are inspired from what they have in the pantry.
That’s not to say they are spending more time in the kitchen: the average American spends only 52 minutes per day preparing and eating meals, while a third claim to have less than 30 minutes a day to get creative. However, it’s currently on trend to use both sweet and savory snacks as a key ingredient in no-prep dinners.
“Snacks are fun and create exciting experiences and social media influencers also boost that excitement,” said Lyons Wyatt.
“Those who value that kind of snacking experience will buy products with a fun factor.”
Breakin’ it down
SNAC’s motivation behind its annual report is to supply its members – and wider snack industry players – with indepth comprehension into the current state of play.
“I’m proud of our team’s work and insight to support industry brands by giving them new data straight from their target market,” said Cochrane.
“This will let them make informed decisions and stay ahead of trends.”
The industry in numbers:
Pretzels hit a trifecta in 2023 with growth in sales (8.7%), number of units (2.2%), and volume or ‘pounds sold’ (0.7%). Private label sales soared more than 20%, while bold flavors, snack combos (eg, in a trail mix), and better-for-you (baked not fried) also ramped up sales.
The corn snacks category increased 19.5% in sales and 10.5% in unit sales, along with 7.6% rise in volume sales. Private label corn snacks saw a whopping 54.7% increase in sales and a 26.9% rise in unit sales from 2023. Volume sales were also up 23.4%.
Popcorn, however, didn’t pop with consumers as it had done the year before. In 2022, sales had soared by 13.1% and seven out of the top 10 brands boasted double-digit sales increases. A year later saw sales recording a mild 1.4% increase with a 4.3% decrease in unit sales. The softening sales, however, was not due to the lack of flavor bomb innovation, especially as popcorn producers seek to compete in the broader snacking arena.
“Innovation with corn snacks resulted in unit and dollar increases, as well as for pretzels,” said Lyons Wyatt.
“There were also volume increases with kernel popcorn, likely due to its affordability and ease of customization at home. There may have been some social media influencers demonstrating the addition of tasty and interesting toppings and seasonings to fresh popped popcorn. A do-it-yourself trend is also at play here.”
Data provided by Kellanova found 60% of snackers like a crunchy snack, which bodes well for the cracker category and evident in the 7.2% sales increase to $9.4bn, despite a 3.3% drop in unit sales.
The pressure for BFY options for both people and the planet is growing and the market saw several launches of crackers made with sustainably sourced ingredients and better packaging solutions. Brands were also bold in exploring spicy and sweet flavors, along with new textures, while ramping up consumer engagement with promotions like gaming tie-ins and featuring popular characters.
The nearly $2.9bn cheese snack category saw 4.1% growth with those brands that claimed ‘100% cheese’ resonating with consumers for their high protein/low carb benefits. Cheetos, meanwhile, showed no signs of slowing down, with sales up by 11.8% and unit growth by 6.1%.
Cheese snack makers are also motivating to expand their reach by offering recipes on their websites (tapping into the snack-as-an-ingredient movement).
The $4.9bn snack nuts, seeds and corn nut category saw a 2.3% decrease, with unit sales dropping $4.3% over the same period, according to Circana. Snack nut sales accounted for the vast majority, despite a drop of 2.8% to $4.6bn in sales. Unit sales were also down by 4.5%.
Sales for the meat snacks category increased 1.3% to nearly $2.6bn, dominated by perennial powerhouse Jack Link’s. The more traditional flavors – like teriyaki, peppered and hickory – remain staples, but younger consumers are pushing for the unconventional, such as dulce de leche and guava.
Lagging behind, the pork rind category’s difficulties in 2022 spilled over into the new year with sales down 5.5%, unit sales down 10.2% and volume sales down 10.3%. However, the category remains cautiously optimistic and are quick to note that pork rinds tick the high protein/low carb box, while they align with popular diets like keto.
However, despite the inconsistencies of the various categories, SNAC International is confident that snacks are poised for even more growth as consumers of all demographics continue to demand more from the sector.
“To leverage this momentum, producers must get innovation back on track, because it has been the backbone of snacks,” said Lyons Wyatt.
“Within categories, if manufacturers ensure products meet the needs of consumers where they purchase, when they purchase and at the price they can afford, snacks could have a great 2024 and beyond.”
