Rising levels of per capita disposable income and product innovation drove revenue growth in the industry
Los Angeles, CA (PRWEB) September 25, 2013
The Snack Food Production in Canada industry benefited from rising levels of per capita disposable income and product innovation over the past five years. As consumers had more disposable income, they increased demand for snack food products, thereby benefiting industry producers. According to IBISWorld Industry Analyst Jeffrey Cohen, “During this time, the price of wheat increased, a primary input in several industry products, and many of the larger industry players responded by passing cost increases to consumers in the form of higher product prices.” These trends resulted in greater demand for industry products from the primary downstream markets, grocery wholesalers and retailers. Overall, revenue for the Snack Food Production industry increased at an annualized rate of 1.2% to an estimated $2.4 billion in the five years to 2013. This includes expected growth of 2.0% in 2013.
Over the past five years, a growing number of consumers became more health conscious, causing them to be more aware of the negative health effects that result from eating high-sodium foods. “This caused consumers to reduce demand for salty and oily chips; industry producers responded by introducing healthy versions of their existing snack products,” says Cohen. They offered more healthful options, such as 100-calorie packs and low-sodium versions of existing products. Due to these tactics and rising wheat prices, profit margins expanded in 2013.
The industry is poised for revenue growth over the five years to 2018 as per capita disposable income continues to increase, driving demand for industry products. During this time, consumers will continue to demand healthier versions of existing products and maintain their customer base; producers will respond by introducing a greater variety of healthier products. Profit margins are expected to continue growing through 2018, which will likely entice more companies to enter the industry.