Snack attack: snack sales on the increase in developing regions

Globally, sales of snack foods reached $374 billion between 2013 and 2014, according to a new report from Nielsen. This figure represents a 2% year-on-year increase. Europe ($167 billion) and North America ($124 billion) account for the majority of worldwide snack sales, but snack sales are actually growing faster in developing regions than these established markets.

Snack sales in the Asia-Pacific region ($46 billion) and Latin America ($30 billion) have grown 4% and 9% respectively, while sales in the Middle East/Africa region - worth $7 billion - grew 5%.

“The competitive landscape in the snacking industry is fierce,” said Susan Dunn, executive vice president, global professional services, Nielsen.

“Demand is driven primarily by taste and health considerations and consumers are not willing to compromise on either. The right balance is ultimately decided by the consumer at the point of purchase. Understanding the ‘why before the buy’ provides the foresight necessary to deliver the right product to the right consumer at the right time.”

Sweet or savoury?

Confection represents the largest sales contribution to the snack category in Europe ($46.5 billion) and Middle East/Africa ($1.9 billion). Salty snacks contribute to more than 20% of snack sales in North America, while refrigerated snacks comprise almost a third of snack sales in Asia-Pacific. Cookies and snack cakes make up more than 25% of total snacks in Latin America.

According to Nielsen retail sales information, sales of savoury snacks increased 21% in the last 12 months in Latin America. Meat snacks like jerky increased 25% in the Middle East/Africa and 15% in North America.

In the Asia-Pacific region, refrigerated snacks grew in popularity, with sales increasing 6.4%, while dips and spreads sales increased 6.8% in Europe.

“Non-sugary snacks closely aligned with meal-replacement foods are showing strong growth, which signals a shift in a consumer mindset to one focused on health,” said Dunn.

“While conventional cookies, cakes and confections categories still hold the majority of snack sales, more innovation in the healthy snacking and portable food space is necessary to adjust to this changing dynamic.”

Almost half of the 30,000 consumers that Nielsen polled said they eat snacks in place of full meals, with 52% of these snacking for breakfast, 43% for lunch and 40% for dinner. 76% of respondents said they eat snacks to satisfy cravings or satisfy hunger in between meals.

“There is a perception that snacks are intended more for in-between meals than for actual meal replacements,” said Dunn.

“But busy, on-the-go lifestyles often dictate a need for quick meals, and many opt for fast food options that can be high in calories and low in health benefits. There is a massive untapped opportunity to gain market share in the nutritious, portable and easy-to-eat meal alternative market that snack manufacturers could fill.”

What’s your poison?

Fruit and chocolate topped the list of snack choices. Poll respondents were asked to select one snack they would choose over all others. Here’s what they said:

• Fresh fruit: 18%
• Chocolate: 15%
• Yoghurt: 6%
• Bread/sandwiches: 6%
• Cheese: 5%
• Potato chips/tortilla chips/crisps: 5%
• Vegetables: 5%
• Ice-cream/gelato: 4%

Unsurprisingly, tastes varied around the world. Vegetables (57%) are the snack of choice in Asia-Pacific, cheese (58%) in Europe, ice cream/gelato (63%) in Latin America and potato chips/tortilla chips (63%) in North America.

“In the dichotomy of snacking, consumers want healthy, but yet indulgent options are still going strong,” said Dunn.

“A better understanding of consumer demand and the need states that drive demographic profile preferences will help manufacturers crack the code on the right portfolio balance between indulgence and healthy. It will also increase the odds of success in this ultra-competitive landscape.”

Less is more - for ingredients, at least

The Nielsen study found that more respondents care about the absence of certain ingredients than the addition of them. “Consumers want snacks to stick to the basics,” said Dunn.

Natural ingredients were rated as being very important by 45% of respondents and moderately important by 32%. Of the 20 health attributes included in the study, Nielsen says natural ingredients attracted the highest percentages of responses.

There are some things respondents did not want to see in their snacks, including:

• Artificial colours: 44%
• Genetically modified organisms: 43%
• Artificial flavours: 42%
• Caffeine: 23%
• Gluten: 19%

Around one-third of respondents think it’s important for snacks to be low in sugar, salt, fat and calories. Low- or no-carbohydrate options were important for one quarter of respondents. One-third want snacks with beneficial ingredients, such as fibre, protein and wholegrains.

A surprising number of respondents want snacks to contain ingredients that are sourced sustainably (35%), are organic (34%) and/or use local herbs (25%).

Portion control - perhaps one of the biggest issues when it comes to snacking - was only of concern to 27% of all respondents.

For more information about the Nielsen Global Survey of Snacking, visit www.nielsen.com.