Dive Brief:
- Snacking continues to resonate with consumers, making up 27% of all food and beverage sales in the U.S., according to SNAC International’s 2023 State of the Industry Report. Sales of salty snacks in 2022 grew to about $28.4 billion, an increase of 15.6% from the prior year. But volumes of snacks sold decreased 0.9% in the year.
- Nearly nine in 10 consumers say flavor is important for making snack choices. A majority of consumers — 54% — are snacking to treat themselves.
- Snacking has become more central to consumers’ eating patterns. Manufacturers in the snacking space — including Mondelēz International, Hershey and PepsiCo — have ratcheted up their presence in the sector through innovation and acquisitions.
Dive Insight:
Most people in the U.S. see snacking as an important part of their daily diets. According to the study, which was put together using data from Circana (formerly known as IRI) and Sosland Publishing, a quarter of consumers snack every afternoon, and 25% every evening.
The biggest beneficiary of the snacking boom has been the pretzel category, which was one of two categories that saw growth in both dollar and unit sales in 2022.
Pretzel sales, worth about $1.8 billion last year, got a boost from new flavored and premium varieties. Two of the top brands — Snyder’s of Hanover and Snack Factory Pretzel Crisps — are owned by Campbell Soup. The third-best-selling brand, Dot’s Homestyle Pretzels, was acquired by Hershey in late 2021. Dot’s posted sales growth of 49.1% and a rise in product volume of 41.3% in 2022.
The other category that saw growth on both fronts was corn snacks, with $1.5 billion in sales. These had a 3.6% increase in unit sales and a 21.1% growth in dollar sales.
Most of the rest of the growth in the snack space came from higher prices, according to the report. The actual amount of products sold decreased in most categories.
From a volume standpoint, dried meat snack sales were down 10.6% while dollar sales rose 1.2%. Even larger categories that posted bigger percentages of dollar sales increases saw their volumes fall. At the top of the list, cookies posted a 12.3% jump in dollar sales, but a 4.3% decline in volume. Potato chips had 14.5% more dollar sales, but the category sold 1% fewer products.
As inflation has driven up prices in the last year and a half, consumer willingness to pay more for snacks has been reflected in other studies.
In Mondelēz’s most recent State of Snacking report, three out of four consumers said higher prices for groceries to make meals were hurting their budgets more than pricier snacks. More than half were concerned about the availability of their favorite snacks on store shelves, though nearly 80% said it’s more important than ever now to have moments of indulgence during the day.
At the Sweets & Snacks Expo this week, Food Business News reported that Sally Lyons Wyatt, a Circana executive vice president and practice leader for client insights, is seeing a bigger problem in snack sales.
The declines in volume sales in snacks in the first quarter of 2023, she said, are steeper than those for the food and beverage sector as a whole. She warned attendees they may be nearing the point where prices are too high, and encouraged different methods to increase sales, such as adding more multi and variety packs.
