Snac World - Official State of the Industry 2023 - 18

STATE OF THE INDUSTRY
Snack Industry Facts
$186.4 billion in snack and
snack-adjacent sales
395,000 employees
$15 billion in wages
$11 billion in tax revenue
Source: IRI data for 52 weeks ending Jan. 1.
store, " Mr. Florio said. " It's when I go to a restaurant,
when I go to the salon, all of those start to suffer
first. It takes two to three quarters before people
actually change their behaviors in the grocery store,
particularly around food and beverage items. "
Because inflation has dragged on for nearly two
years, shoppers have been altering their habits for
nearly a year.
" This is almost unprecedented in what manufacturers
have been dealing with in most of the recent
decades, " he added.
MAKING DOLLARS STRETCH
While dollar sales of snacks are mostly up across
the board - price has increased about 10% to
13% in the past year in most snacking segments,
according to IRI - volume for most is down slightly.
" That's troubling because volume is typically much
more sustainable as a habit, " Mr. Florio said. " If you
see growth coming from price per volume (PPV), it's
not something that - for the future - you can continue
to rely upon. If it's actual volume, you can see that
as a trend that's going to be sustainable over time.
What this means, generally speaking, is that people
aren't just going down to lower priced snacks, or
they're actually doing without in many occasions. "
As consumers try to stretch their dollars, they are
choosing snacks that are cheaper and more filling.
For instance, beverages lost share of all snack dollars,
which means people may be turning to snacks with
protein or just switching to cheaper options in that
category. And consumers are switching to cheaper
protein options, such as eggs and chicken. Although
the cost of eggs has skyrocketed in recent months,
they are still one of the cheapest protein options.
Snacking is primarily driven by savory snacks,
which make up 57% of the snack category, representing
$58.3 billion in sales. This includes hot, salty
and meat snacks as well as lunch box-compatible
snacks. The salty snack surge is driven by the resumption
of large parties and gatherings because
of the diverse array of party-sized products in this
category, according to IRI.
Salty snacks were the driving force behind Plano,
Texas-based Frito-Lay North America's growth. The
largest snack manufacturer grew its share in the
past year, according to IRI. In fact, the top 10 manufacturers
produced 60% of snacks in America.
Sweet snacks are roughly half of the amount of savory,
with sales of $30.4 billion. This category includes
cookies, bars, sweet cups, fruit snacks and dried fruit.
Cookies were a key driver over the past year because
they are a cost-effective comfort food, said IRI.
The other 15% of snack spending is the category
of both savory and sweet snacks, such as crackers,
nuts and coated snacks.
The snacking-adjacent category, with sales of
$82.1 billion, has been driven mostly by sweet
foods. This includes baked goods, breakfast, candy
and frozen sweets and appetizers, among others.
Frozen foods grew more popular during the pandemic
as people were home and could break away
from shelf-stable snacks, according to IRI.
" We saw people heating up frozen appetizers,
frozen dinners and entrees as snacks because
they had their air fryer, their oven near them, " said
Beverly Chodorov, associate with growth consulting,
IRI. " But we also saw people try a lot more
frozen sweets. That was a growing pocket during
COVID because there was no longer a focus on
on-the-go but rather 'What would meet my needs,
and I have a lot more kitchen appliances accessible
to me now.' "
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SNAC WORLD 2023
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Snac World - Official State of the Industry 2023

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