The alternative snacks market can be divided into five major sectors. These are hot snacks (taking in frozen and chilled hand-held snack items), cereal bars/healthy snacks (including muesli bars, granola bars and health bars), meat snacks (encompassing pork rinds and chilled meat snacks), fruit and vegetable snacks (including dried and processed fruit snacks and prepared snack fruit and vegetables and salads) and dairy snacks (incorporating cheese snacks, hand-held dairy dessert snacks and chilled biscuit snacks).
Key Growth Factors
There are a number of key factors driving growth in the international alternative snacks market. Several of the trends interact but the overall shift is towards convenience, health and sophistication.
The major factors to note are as follows:
- A continued drive to convenience in eating and cooking patterns.
- A fragmentation of traditional eating habits in favour of snacking or eating on the move.
- Continuing health concerns boosting interest in low-fat, natural and nutritious snacks.
- The development of new flavours and packaging as well as a blurring of product boundaries.
- A surge in interest in ethnic snacks and a demand for more adventurous, sophisticated tastes.
- Specific targeting of the children’s market.
The total value of the alternative snacks market in the countries covered in this report amounted to an estimated £9.2 billion in 1999. Of the six countries under review, the USA is by far the largest market, with sales amounting to £6.2 billion in 1999. Japan ranked second with sales of £1.4 billion, followed by the UK with £505m, France with £447m, Germany with £436m and Australia with £185m.
The largest single segment in the international alternative snacks market is hot snacks, with a 57% share of value sales in 1999. Growth rates have been substantial since 1996 in this sector, with sales rising by 39% between 1996 and 1999. The second principal segment is cereal bars and “healthy” snacks, with a 15% share of overall sales in 1999. Dairy and meat snacks each take a further 10% of total sales, followed by fruit/vegetable snacks with a 9% share.
There are a large number of suppliers, many specialist, in the international alternative snacks market. However, the market is becoming increasingly concentrated and polarised, particularly in sectors such as hot snacks, cereal bars and dairy snacks. Own-label supply is also becoming more significant as grocery retailers have realised the potential of the alternative snacks sector.
A number of global multinational food operators are now consolidating position in the alternative snacks market. Kellogg’s, for example, now enjoys commanding positions in both hot snacks and cereal bars categories in many of the countries under review. Kraft Jacobs Suchard likewise has carved out a dominant niche in the international dairy snacks sector. Nestlé and Unilever both have interests in several alternative snacks categories through subsidiaries around the globe. Smaller domestic suppliers are maintaining their hold, particularly in the less developed French, German and Japanese markets. The Australian alternative snacks market is dominated by one major domestic supplier, Uncle Toby’s, a Goodman Fielder subsidiary.
Innovation and New Product Development
Innovation has been critical to the continued development of the alternative snacks market. Indeed, this sector is one of the most exciting of any food category at present in terms of new product development. The ongoing surge in new product launches is also continuing to blur boundaries as lines are introduced that merge categories into one, as witnessed in the cereal bars sector with the introduction of breakfast replacement bars.
New product launches have concentrated on offering greater convenience and choice to consumers, as reflected in mini versions of cheese and meat snacks, tubes and pouches of fromage frais/yoghurt and chilled microwaveable hot snack lines.
Health and nutrition have played an important role in new product development in the alternative snacks sector. This is witnessed in the launch of fortified energy bars, low-fat rice snacks, dried and processed fruit snacks and reformulated meat snacks.
Attention has been specifically targeted at children in many alternative snack sectors as a key influence in the purchase of the household’s snack items. This has been strengthened by the growing importance of the lunchbox in many countries under review. Hence, a never-ending stream of new product launches has been unleashed into this potentially very lucrative market.
The major trends for the future dynamics of the market will remain convenience, health and quality, with a continued emphasis on innovation and range development to grow the market. It is believed that the continental European markets will start to exhibit the same growth potential as the more developed US and UK markets where alternative snacks are concerned.
The key to future growth in the alternative snacks market is a continuing concentration on meeting consumer demand for convenient, quick, nutritious and quality lines. It is to be expected that the definitions of alternative snacks will remain fluid for some years to come as manufacturers continue to evolve this exciting and fast-changing market.
Executive summary taken from ‘The International Market for Alternative Snacks’ by Leatherhead Food RA, to order your copy click here.
Details of reports from Leatherhead Food RA click here