Research Spotlight: Crunch Time: Salty Snacks
These treats were consumer go-to items right through the recession—and future prospects look good for continuing sales. But new challenges, including the increasing price of corn and public concern about nutrition, mean pressures and changes in this market.
by Eva Meszaros
As one of the most diverse categories in the consumer packaged goods industry, salty snacks generated $23.8 billion in total U.S. sales, according to Mintel International. The modest prices of most salty snacks give customers the image of an affordable indulgence, which kept sales up through the economic recession. The category has been growing continually since 2005, but, after garnering negative attention for its poor nutritional value and view as a contributor to the nation’s obesity epidemic, manufacturers and retailers are at a crossroads in finding a balance between offering fun, affordable treats and providing better-for-you snack options.
Mintel’s report defines salty snacks to include the following categories: potato chips, tortilla chips, snack nuts and seeds (including toasted corn nuts), pretzels, popcorn, extruded cheese snacks (e.g., Cheetos), corn snacks, meat snacks and “other” snacks (including pork rinds, onion rings, snack mixes and vegetable chips).
- Sales of salty snacks are at an all-time high, having actually peaked during the recession. Sales slowed in 2010 as the national focus shifted to health and nutrition, but the category is expected to pick up throughout 2011–2015.
- Snack nuts and seeds and popcorn saw high numbers in product launches during 2005–2010; chips accounted for the largest number of flavor launches in this period. Cheese has become a popular ingredient in new product launches and continues to appear in a variety of product types.
- As the overall population grows older and the number of households with children decreases, the salty snack industry needs to ensure that it stays relevant to an older demographic while continuing to appeal to its core younger market.
- The doubled price of corn, a key ingredient for many salty snacks, may force raised prices, leading to potential growth of private-label brands, or a drop-off of sales.
Potato chips remain the largest segment with $6.8 billion in sales in 2010; this segment shows the most willingness to develop new flavors to impress the young market. Corn snacks, already the smallest segment, was the only one to have a sales decline between 2008–2010.
Salty snacks face competition from healthier snacks (such as those containing fruit), as well as snack/cereal/energy bars, which accounted for the largest amount of snack introductions in 2005–2010.
- According to Mintel’s consumer survey, consumers generally stick to favorites or a usual flavor when it comes to buying salty snacks, followed by price and in-store marketing; few indicated being impacted by health claims.
- Potato chips are the top pick in salty snacks among all age groups. Plantain chips are picking up, with popularity among the 18–34 age group and low-income homes.
- Asian and Hispanic populations have been buying more salty snacks in the past year; this bodes well for the category, as these are some of the fastest growing ethnic populations, according to the U.S. Census Bureau.
- Name brands dominate over private label, but survey respondents switch among name brands.
- While healthier salty snacks have yet to resonate with consumers, it is important for manufacturers to continue pushing the concept of healthier snacks to avoid losing a sizable portion of the snacking population.
A cluster analysis distinguishing three types of salty-snacks eaters—frequent, occasional and low—found that the frequent snackers care most about quality and healthy options, occasional snackers (the largest group) care about price and brand, and low snackers care about price and taste.
Multipack and bulk varieties have a slight edge in sales over single-serving packs across many demographics. They are more appealing and affordable for households with children. Men are more likely to buy single packs, while women are more likely to buy multipacks.
The recession has forced many consumers to cut back and spend more time at home. The salty snacks category has benefited from this, as the overwhelming majority of respondents indicate that increased home time whether alone or with family is why they are buying more salty snacks.
For consumers who have cut back on salty snacks, the overwhelming majority say that these products are simply an expense they choose to live without. The only other significant reason is related to a change in eating habits or diet. This is perhaps of more concern because the increased media attention on America’s obesity problem is likely to make a sizable percentage of consumers reconsider salty snacks as they look to eat better.
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