The snacks industry has demonstrated success in overcoming the many challenges faced over the past few years (eg the pandemic and inflation). Looking at the year ahead, 2023 is expected to bring even more challenges, but also opportunities to positively evolve the industry. Euromonitor International’s snacks research has identified five key trends set to shape snacks this year.
Snacks seen more as staples
Persistent habits picked up from prior years, such as worries of product availability during the pandemic and snacking for comfort, coupled with new concerns over costs are pushing consumers to further pre-plan snack purchases among their groceries. In 2023, consumers are expected to further integrate snacks into their eating patterns with the industry’s support through expanded occasions, functions, and access to snacks.
Snacking for a treat, to replace a meal, or out of boredom/distraction are core to why consumers snack. Manufacturers must continue to optimise snack innovations, but also remain true to why people snack in the first place.
Channel conscious shopper shifts
Consumers continue to purchase snacks, but the places and ways they are seeking out snacks is changing with both affordability and cravings considered.
The growth of snack sales through budget-friendly retail channels, such as discounters and warehouse clubs, has seen share growth over the past few years.
E-commerce, a difficult channel for impulse, captured more than two percentage points in channel share gain from 2019 to 2022, reaching nearly 6% of all snacks sales globally
Source: Euromonitor International
Consumers are facing a number of trade-offs in their purchases and the industry must consider how to best serve shoppers throughout their paths to purchase amongst various channels.
Guarding core categories
The industry is likely to evolve and deepen category strategies, in part, to realise growth expectations amidst economic headwinds. Brand leverage, strategic partnerships, and mergers and acquisitions are some activities to be seen.
Making major headlines in the snacks industry in the first month of the year alone:
- PepsiCo announced plans to expand its core brands to cover more of the savoury snacks market (including pretzels, savoury crackers, and meat snacks).
- Mondelez announced divestiture of its gum business in select markets to focus its growth and strengthen its lead in chocolate confectionery and biscuit snacks.
- Unilever announced a focus on expanding into emerging markets, enhancing digital capabilities, and offering higher-quality products to retain its lead in ice cream.
This evolution is, of course, easier said than done, but industry players must ensure that strategies balance between protecting category shares while also leveraging growth opportunities.
Nurturing nutritional demands
As healthy snacking develops amidst new regulations and concern from consumers, fortified, free from and fibre-filled varieties are continuing priorities, among others.
A majority of consumers have been looking to improve their diets for some time now. And one way of doing so is by consuming cleaner foods – free from preservatives, more natural, and less processed. However, 47% of consumers (up nine percentage points from 2021) say it is too expensive to eat healthily. Regulations like the High in Fat, Salt or Sugar restrictions (HFSS) in the UK, Berkely, California’s junk food access restrictions in the US, and the United Arab Emirates’ National Nutrition Strategy 2022-2030 (to reduce salt intake and eliminate all trans fats) are set to support consumer demands, but also raise the standards on how the industry is expected to produce more nutritious foods.
47% of consumers (up nine percentage points from 2021) say it is too expensive to eat healthily
Source: Euromonitor International
Delivering on nostalgia or needed distractions
Whether a snack has pastime particularities or novel sensorial appeal, the dimensions of snacking are expected to stretch further to fill snackers’ value gaps.
The leverage of holiday and celebratory occasions for snacking will be crucial in maintaining positive momentum in the industry for the year ahead. Snack formulators can expect unexpected textures, attractive formats, and indulgence forward features to play a large part in how some consumers cope with rising prices and stressful times ahead.
Keep pace with this year’s snack trends
With the risks and rewards involved in making business actions arguably higher than ever before, Euromonitor’s five key trends in snacks offer paths for strategy and goal development.
For more information on the state of snacking and trends to watch out for in 2023, please see Euromonitor International’s report Snacks: Half-Year Update 2022.