Low-sugar and allergen-free snacks are no longer niche – they’re the future of snacking. But cracking this market isn’t easy. Brands must juggle sourcing premium ingredients that meet strict certifications, perfecting taste and texture with reduced sugar and keeping prices accessible despite higher production costs. The payoff? A booming sector with jaw-dropping growth potential.
Globally, the allergen-free food market is set to hit $50.37bn by 2024, with a steady 7.4% annual growth predicted to 2034, according to Future Market Insights. Meanwhile, the reduced sugar food and beverage market, valued at $46.18bn in 2021, is sprinting ahead at an 8.9% CAGR in the decade to 2030, Grand View Research reports. These numbers highlight the explosive demand for snacks that align with evolving dietary habits, rising health awareness and the global uptick in chronic conditions like diabetes and food allergies.
A key driver? Growing awareness of food allergies, especially among kids. Tragic incidents, like Natasha Ednan-Laperouse’s fatal reaction to a sandwich not labelled for allergens, have fuelled calls for tighter regulations. In the UK, Natasha’s Law now mandates full ingredient labelling on prepackaged foods, a move that’s pushed consumer demand for safe, allergen-free snacks into overdrive – especially in schools, where food sharing heightens risks.
Add in institutional policies requiring allergen-free options and government campaigns slashing sugar intake and you’ve got a perfect storm for growth. Parents are leading the charge, hunting for snacks that keep their kids safe and healthy, while social media and health influencers amplify the message. Gluten-free, dairy-free and sugar-free lifestyles have gone mainstream and brands that deliver are reaping the rewards.
Advances in food tech mean these snacks no longer need to compromise on flavour or texture, making them irresistible to a wider audience. Combine this with rising disposable incomes worldwide and the low-sugar, allergen-free revolution is here to stay – and it’s just getting started.
Insights from an industry leader
However, it’s rapidly becoming a fiercely competitive sector and brands need a distinct advantage to stay ahead.
Enter data-driven insights – powerful tools to guide product innovation, optimise supply chains and enable swift adaptation to consumer demands.
Bakery&Snacks sat down with Oisin Hanrahan, founder and CEO of Keychain, to explore how data-driven insights are transforming the consumer packaged goods (CPG) industry. Keychain, a platform that connects over 24,000 manufacturers with nearly every Fortune 500 retailer, has gained significant traction for its ability to provide unmatched visibility into consumer trends and product popularity.
Fresh off a $2.5m investment from the Hershey Company in October, Keychain secured a $15m Series A funding round, led by early-stage venture capital firm BoxGroup, with participation from Lightspeed Venture Partners and SV Angel. This funding, which values the startup at over $250m, also attracted investments from major industry players like General Mills, who are active users of the platform. According to Hanrahan, Keychain’s powerful insights are helping brands stay ahead in an increasingly competitive market.
What are the biggest trends in the snack market right now?
One of the largest trends we’ve been seeing is snack brands catering to consumers with specific allergens or dietary preferences. This means nut-free, dairy-free, gluten-free, grain-free and more – and the brands we’re seeing perform exceptionally well are those that prioritize making products that are free of all leading allergens.
Parents are always looking for easy ways to make their children’s diets more nutritious. An easy way to do this is to find less sugary snacks that resemble the less healthy options they already know and love. That’s why some of the common flavours we see from these brands are options like birthday cake or cookies ‘n creme. And they’re resonating with consumers. MadeGood’s Chocolate Drizzled Birthday Cake Oat Bites and Cookies & Creme Vanilla Drizzled Crunchy Oat Bites, for example, have each grown by over 480% in production demand over the past year.
In terms of allergen-free, these options are especially important and helpful during the school year, as many classrooms have implemented allergen-free rules that impact what students can bring for lunch. Brands like MadeGood and Bobo’s offer options that fit these criteria so busy parents don’t have to think twice about what they’re packing their children.
Beyond those categories, consumers continue to gravitate toward lower-sugar alternatives, as long as they still taste great. We see this with candy, cookies, chips, crackers, granola bars and just about any other snack you can think of.
Another trend that we’re seeing more and more often is consumers seeking snacks that offer added health benefits, like options that are high in fibre or protein. Items like prebiotic sodas or high-fibre snack bars are growing in popularity, while generic options are losing traction.
How can brands use data to respond to changing consumer preferences?
Keychain helps brands of all sizes access the same suppliers and manufacturers serving the largest players in the industry. Smaller brands and private-label producers can use these insights to create their own versions of better-for-you snacks. With real-time visibility into supply chains, brands can make faster decisions and quickly adapt to shifting demand.
Data also allows companies to track year-over-year growth for individual products, helping them identify popular flavours and attributes to inform production strategies. This agility is critical in a fast-evolving market.
How can brands maintain affordability without sacrificing quality?
Affordability is a major factor for many consumers today, but companies like MadeGood and Bobo’s are finding ways to keep costs down without sacrificing quality.
The key is partnering with the right manufacturers. By connecting with trusted suppliers, brands can deliver safe, affordable products while optimising production costs.
Brands can browse the capabilities of all of our manufacturers to make sure they’re choosing an option that best suits their needs and budget.
Whether it’s peanut-free, gluten-free, or vegan snacks, with real-time data on costs and production at their fingertips, brands can make smart, efficient choices that bring high-quality, affordable snacks to market faster.
How can data help brands stand out and secure retail partnerships?
We partner with nearly every Fortune 500 retailer, offering brands real-time insights into consumer trends, market gaps and manufacturing costs. This helps brands see exactly what shoppers are looking for, so they can partner with the right manufacturers and develop products that hit the mark, from healthier ingredients to unique flavours. They can also leverage these insights to position themselves as reliable retail partners and secure valuable shelf space.
What’s next for the snack industry?
Looking ahead, the focus will remain on gluten-free, low-sugar and allergen-friendly snacks. Consumers want products that fit their health goals without compromising on taste.
Brands that use data to track trends and innovate quickly will have a competitive edge. The ability to expand product lines and partner with efficient suppliers will be crucial. Data platforms that use artificial intelligence (AI) help brands track real-time trends, so they can quickly understand which products are gaining traction. This allows brands to innovate faster and create new snacks that cater to gluten-free, low-sugar or allergy-friendly needs.
Brands will need to be quick on their feet to keep up in this competitive market, expanding their product lines to include the healthier choices that consumers are seeking. Using data insights, they can identify where demand is growing and partner with the right suppliers to streamline production, creating higher-quality and more affordable snacks that meet consumer preferences. The brands that keep the focus on health, innovation and affordability will be the ones that stand out in the future of snacking.
