The global savory snacks market was valued at $111.1 billion in 2014, with processed snacks accounting for the biggest segment at about $41.5 million for the year, according to the market research firm’s latest report Global Industry Insight: Savory Snacks Market Development and Demand Forecast to 2020. P&S said the market will reach a projected $166.6bn by 2020.
Future growth forecasts, it said, have a lot to do with increasing demand for savory snacks in developing countries like India for example, where the category is forecast to grow 16.6% growth each year until 2020.
Health and affordability
Although the market is set for big growth, P&S Market Research said healthy alternatives, such as fresh fruits, juices and bakery products were hindering some potential growth for savory snacks.
Tom Dempsey, CEO of the Snack Food Association, said snack makers were reacting to this demand for healthier food and developing healthy product options.
“Customers’ increasing inclination towards organic foods is compelling the savory snack companies to innovate their products for customer retention, it is not new or surprising news,” Dempsey told BakeryandSnacks.com. “Practically all of SFA members are diversifying their product offerings to meet consumer demand for organic, ‘healthier’ or GMO free items.”
The P&S report indicated a rise in the development of cleaner label products featuring more natural ingredients - a move prompted by a greater consumer inclination towards organic, it said.
It also said there were greater demands for portion control and pack sizes with smaller pack sizes growing across the global savory snack market, specifically in developing countries like India and Mexico. And this demand wasn’t just about portion size, it noted, but rather, in large part, due to lower-income groups not being able to afford larger packs.
Variety is necessary
The P&S report noted a shift in American culture where consumers were having snacks as a 'fourth meal' instead of simply a break-time snack. Snacks, it said, were now taken to work, during the commute, in movie theaters and generally anywhere 'on the go'.
Dempsey said there was also a significant consumer drive for more variety, prompting snack makers to innovate around products, tastes, flavors and shapes to help stay more competitive.
“Innovative and expanded core categories will continue to get [consumer] attention as well,” he said. “As long as the global community snacks, regardless of country or region, snack manufacturers will work to satisfy the consumer’s tastes.”
While the US leads the way with its propensity for a snack, P&S said other countries, such as Brazil, were also adopting a similar culture.