Profusion of choice and the internet to triple organic snacks market over next five years: Report
The market researchers latest report states the market is predicted to grow by a CAGR of nearly 14%. Consumers are increasingly eating on-the-go, which is driving the growth of snacks that satisfy not just hunger cravings but also check the boxes for health and nutrition.
It also said the renewed focus on organic – and, in some cases, regenerative – agriculture, especially in developing regions, will impact the availability of organic snacks. Despite the higher cost of such practices, consumers in emerging markets continue to grow their disposable income, while retail channels in those regions are also evolving.
Retail plays an important role in the organic snacks segment, as buyers expand their offerings and take chances on less established brands. Millennials seem to be diving headfirst into this segment, the report said, though boomers stand to buy into organic as they age and become more attuned to their own health and wellness.
Brands have also capitalized on the direct-to-consumer connection allowed by the web: ecommerce snagged more than 15% of the organic snacks market in 2017 and will experience a 15.9% rise in CAGR over the next few years.
Consumers – especially in the US, where delivery platforms abound – have easier access to healthier snacks. Tech companies have cropped up to satiate this demand, such as SnackNation, a subscription box company, or Tyme Commerce, a personalized food platform that learns users’ preferences through artificial intelligence.
Tyme recently launched a feature on its app that allows office employees to help build a ‘smart’ database of snacks. Employees can log into their office’s account, then swipe right to like a snack or left to dislike it – a first among similar ordering platforms, the company claims. The system generates a snack order based on these preferences, saving time for administrators who manually curate these lists, and potentially reducing waste.
Organic snacks are salty, too
Though consumers are turning to organic alternatives, they still want something salty: these snacks still led the pack by category, according to the report, and will gain more than 11% in CAGR through 2025.
The report attributes this growth to the increasing variety of flavors and ingredients – whether it’s chickpeas, lentils, sorghum or peas. Such organic snacks have also become readily available in everyday retail channels, including grocery, convenience and even quick-service restaurants.
Mostly happening in North America
About two-thirds of this growth has happened in North America, where new brands call out their better-for-you status and established names throw their hat in the ring.
Major CPG food companies have harnessed the power of snacking their own incubators. Mondelēz International, for instance, has forged a partnership with Israeli incubator The Kitchen, to boost opportunities for ‘the best and the brightest to lead the future of snacking,' while PepsiCo has teamed up with food incubator The Hatchery Chicago to foster emerging snack brands, among others.
There has been a flurry of activity on the M&A side, too, from Conagra Brands adding Angie's BOOMCHICKAPOP to its portfolio to Hershey's recent acquisitions of health and wellness snack bar brands, Fulfil and One Brands.
General Mills, meanwhile, now boasts nine organic brands in its umbrella, including Annie’s, maker of organic mac-and-cheese and cheese-based snacks; Epic, a paleo protein bar brand; Larabar, a limited-ingredient fruit and nut bar line; and Food Should Taste Good, which makes a slew of vegetable chips.