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BOOMING SNACK SALES HIGHLIGHT A GROWTH OPPORTUNITY IN EMERGING MARKETS

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Staying ahead of sales trends in fast-moving consumer goods (FMCG) isn’t easy, but by keeping an eye on macroeconomic trends, identifying categories that are showing a surge and anticipating consumer needs, can illuminate the overall picture. One FMCG category that shows promise is snack foods. A rare global growth story, snacks are satisfying consumer cravings around the world—in fact, the snacking business grew US$3.4 billion globally in 2017.

BOOMING SNACK SALES HIGHLIGHT A GROWTH OPPORTUNITY IN EMERGING MARKETS - Brand Spur

A Nielsen analysis of volume versus value sales shows that most consumers are primarily spending more, not buying more, so identifying trends within this booming category is crucial. So, where are the hottest snack opportunities today?

BOOMING SNACK SALES HIGHLIGHT A GROWTH OPPORTUNITY IN EMERGING MARKETS - Brand Spur

Many emerging markets rise to the top of those with an increased appetite for snacks. Seeing sales growth in non-essential categories, like snacks is a good indicator that consumers in these countries are ready and able to spend beyond the bare necessities, marking an incredible opportunity for FMCG companies in these markets.

TREND SPOTLIGHT: HEALTHY AND PORTABLE

When it comes to snacks, consumers aren’t trading convenience for quality. As with other categories, they are striving to be more mindful snackers and searching for clean labels. Many indulgent snacks manufacturers have heard this message loud and clear and have simplified and scrubbed their ingredient lists. These steps are indicative of a larger trend, and one that is coming just in time.

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By 2020, preventable diseases such as diabetes, stroke and heart attacks will contribute to 73% of all deaths. According to the World Health Organization, 31 million of these deaths will occur in low- and middle-income countries, many of which are emerging markets. Governments around the world have implemented taxes, campaigns, labeling and advertising reforms to help consumers make healthier food choices.

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Consumers are striving to clean up their eating habits to reduce, delay or reverse these preventable diseases. In 2016, healthy food and drink sales grew double digits in India and Costa Rica, at 10% and 11.3%, respectively. During the same time, consumers in Colombia and Mexico bought healthy foods two to four times more often than indulgent ones. As a result, healthy food sales volumes grew by 4.2%. And it’s not just snacks. Vietnamese are thirsty for healthy food drinks. By the third quarter of 2017, the category grew by 10.3%, and it’s now one of the fastest growing in the country.

Companies will need to continue to adjust their action plans to address these burgeoning consumer needs. The good news is, this healthy food trend is creating new opportunities within snacking and adjacent categories.

In the U.S., companies have found success in the “snackable” fruit and vegetable category, such as grapes or baby carrots. These portable produce items are then repackaged into individual servings. Think dried fruit and nut snack packs, small fresh smoothies and fruit cups.

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Consumers are eating up this “on-the-go” snacking sub-category, to the tune of US$1.1 billion dollars. Their hunger has grown the category at a compound annual growth rate of 10% between 2012 and 2016.

This is just one example of how companies can rethink the category. Snacks have the benefit of sitting at the corner of healthy and indulgent. This gives companies the opportunity to innovate across this spectrum—and combine local preferences and convenience. The most important task is to act fast to get ahead of policy and consumer trends. This will also enable companies to become partners with consumers in this healthier lifestyle quest.

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