Poor performance in Latin America and China – traditionally “beacons of light” – have driven the slowdown across the global snacking market, said Euromonitor food analyst Jack Skelly.
“Consumer spending has been severely hampered by the macroeconomic slowdown, meaning pre-existing snacks users have curbed their consumption,” he told this site, adding that manufacturers have failed to appeal to new audiences.
Confectionery and sweet snacks
Sweet snacks and confectionery have also been threatened by growing concerns over sugar-heavy diets, he suggested.
Growth in confectionery sales slowed in the past 12 months in four of the seven regions identified in the Euromonitor data. It dropped from 3% to 1.5% in North America.
Looking at the past 24 months, confectionery growth has fallen 4.3 percentage points in the Asia Pacific region and 3.6 points in Latin America. Similar declines were recorded in the two regions in the sweet biscuits, snack bars & fruit snacks category.
With the exception of Asia Pacific, where sugar candy remains popular, confectionery performance is now largely driven by chocolate, said Skelly.
“Chocolate has slowed down because it is particularly sensitive to consumer spending power, whose growth slowed substantially in China and Brazil,” he added. “Chocolate therefore remains unaffordable for a large proportion of the population.”
Snack bars success
Snack bars are less likely to be impacted by sugar concerns, suggested Euromonitor. The segment has seen strong performance from brands such as Kind and Clif in the US. In the North American market, energy bar sales grew 11% last year and 9% this year.
“These products boast a number of health credentials and appear to be the right cross of indulgent and healthy for consumers to buy in large numbers,” said Skelly, adding the same applied to nuts, which have performed particularly well in Western Europe.
Although generally recording higher sales growth than other parts of the snacks market, the savory snacks category has also slowed. Of the seven regions, only Eastern Europe recorded growth in the past 12 months – bouncing back from decline in the previous period.
North America has been one of the worst-performing regions in savory snacks in the past 12 months, with value sales growth down 1.5 percentage points to 1.7% in 2015-16 compared with the previous 12 months. This took the value of the market to $48.8bn – around a third of the total global savory snacks category.
Only the Middle East & Africa recorded a steeper decline, with savory snacks growth falling 1.9 points to 4%, with a market value of just under $5bn.
Brighter future ahead
Euromonitor said the future for the snacks industry looked “much brighter” than the present and predicted a return to growth of 2% and above from 2017 onwards, driven by a return to stability in Latin America and expected rebound in the Chinese market.
“In emerging markets, we should expect improved snacks distribution to aid growth,” added Euromonitor packaged food head Lamine Lahouasnia. “In developed markets, the shift towards higher end, 'naturally healthier' alternative snacks should deliver greater value for brand.”