What You Can Expect From The Snack Food Industry

The United States is the largest world market for snack foods, consuming roughly a third of the total supply. The American snack food industry consists of more than 1,200 companies operating 1,465 plants and using over $ 11 billion worth of ingredients each year. From 2001-2006, snacking increased by 1.5% and skyrocketed another 4% just in the last year.

“Consumers are serious about these ‘meals’ being healthy. Simultaneously, manufacturers are serious about meeting consumer, watchdog and governmental demands to make snacks more nutritious, particularly those aimed at kids,” says Don Montuori from Packaged Facts market research company.

It’s surprising to some that snack food industries have skyrocketed during a time of recession, especially when snack food prices have increased anywhere from 4-11% over the last year, due to increased energy and commodity costs. However, consumers are flocking to Wal-Mart for their fair-priced trail mixes and coated snacks.

For the most part, weight management and nutrition headlines are driving consumer interest and demand for healthy snack foods, with 62% of consumers saying they eat foods to prevent or manage health conditions and 42% are seeking snacks with health benefits. Yet industry leaders add that the more indulgent treats still comprise two-thirds of all sales.

Nevertheless, today’s discerning consumer is looking for the snack food industry to offer products with no trans fat, low fat, low calorie, low cholesterol, low sugar, whole grain, low sodium, vitamins, minerals and organic or natural ingredients. Portion control products have really taken off, allowing consumers to still indulge in those zesty Doritos or chocolate cookies. Kraft was the original pioneer of calorie-control snacking, offering 100-calorie servings of Oreos, Thin Crisps, Chips Ahoy and Wheat Thin Minis.

Since then, chip manufacturers, soda pop makers and countless others have joined the club. Some portion-control products are simply smaller, made with the original recipe, while others have been manufactured a bit differently, using low-fat, low-sodium and low-cholesterol recipes.

The snack food industry, while revolutionizing and evolving, is still running into some trouble, particularly with high commodity prices cutting away at their profit margins. This year, wheat reached a historic $ 11.69/bushel because of poor weather conditions and pressure on land use, as more and more farms convert to corn growing to gain government subsidies.

Soybean oil has reached 67 cents/pound, which is double the normal levels, and is attributed to the use of soybeans for biodiesel and corn for ethanol. While not quite an emergency today, these issues will likely come up in future national snacking discussions.