The US popcorn sector has been resilient to a pinched and health-focused economy and is now fuelled by premium-priced healthier variants, according to a new report.
The IBISWorld report forecasts that over the next five years, industry revenue will surge to $1.1bn at around 2.1% a year.
The report said that the popcorn production industry has remained resilient to a host of challenges and is now set to soar on the back of consumer desires for premium, healthier and organic products.
Tightened consumer spending during the recession cut demand for nonessential purchases like popcorn and a health-conscious sentiment caused wariness on caloric and high-sodium flavored popcorn, the IBISWorld report said.
“Nevertheless, the industry remained resilient due to major companies’ ability to quickly adapt to changing consumer preferences by introducing healthier product lines,” it said.
Premium and organic to explode
Along with successful reformulation efforts by popcorn producers, Agiimaa Kruchkin, industry analyst at IBISWorld, said: “Consumers continue to regain disposable income as the economy recovers, driving demand for premium-priced healthier and organic popcorn products, with revenue expected to grow 2.7% in 2013.”
“Producers are charging premium prices for their products’ perceived superior quality and are growing their pool of customers willing to pay these high prices,” Kruchkin said.
She said it has been this ability to charge higher that has enabled popcorn manufacturers to maintain profitability despite rising input costs.
A wider global surge
Europe’s largest snack market – the UK – has also reported strong growth in its popcorn sector.
Data from retail analysts Kantar Worldpanel pegged the UK’s popcorn market at £42m ($67.2m) last year, with a 20% sales increase recorded across retailers over the previous year.
Lee Bannerman, the snack buyer at Tesco, said this growth had “ironically been helped by the economic downturn”, due to more consumers staying in instead of going to the cinema or theater.
Asia-Pacific's popcorn market recorded a compound annual growth rate of 4% between 2004 and 2009, according to Datamonitor research. It found that ready-to-eat popcorn segment led the market in 2009, with a share of 53.7%.