A snack is a snack in every market making global brand building easier, a Euromonitor analyst says.
Speaking to BakeryandSnacks.com, Ildiko Szalai, senior analyst at Euromonitor International said: “Companies are able to build global brands because snacks are less diverse. When it comes to meals; they can be very diverse culturally – for example sushi in Japan and tapas in Spain. But when it comes to snack products, they are quite similar.”
“To build a global brand from nothing is not easy. But the building of a global snack brand can be supported with marketing and innovation through a global campaign. Compared to launching a global meal product – it’s far easier,” she said.
“A snack is a snack in every market.”
Three core drivers
Three factors were driving the soaring snacking trend: Convenience, wellness and value for money.
“From a consumer’s point of view, snacks are very well positioned in terms of these factors; addressing all three at the same time,” she said.
These three factors drive the snacks sector on a global scale but are subject to acceleration or suppression according to economic and environmental factors.
“These trends cannot be isolated from weakening spending power of consumers and a struggling economy – in these cases the drivers (convenience, wellness and value for money) are less strong,” Ildiko said.
When comparing developed and developing markets, it is clear these drivers differ, she said.
She used the US – the globe’s largest snacks market at $116bn in retail value for 2012 according to Euromonitor data – as an example to indicate how such a climate has impacted market growth.
“In a market like the US, it has reached very high maturity and there are very few new consumer groups, there is no population growth and no strong spending power growth. Consumers are already pretty much eating all they can. This is why we are not seeing strong snacks growth in the US.”
On the other hand, China – the globe’s fastest growing snacks market with an estimated CAGR of 7% for 2012-2017 (Euromonitor) – is being driven by a surging population and increase in income per capita, she said.
Driving growth in developed snacks markets
Ildiko said that unlike a focus on volume growth in developing markets, manufacturers must dedicate efforts on “value-added growth through innovation” in developed markets – like the US, Canada and UK.
“It could be many things – fortification or taking away fats, sugars and preservatives. Whatever it is, manufacturers need to raise a product’s credentials through research and development,” she said.
She noted that manufacturers need to directly target specific consumer groups with relevant messages.