Produced introduced healthier snacks to lure health-conscious consumers.
New York, NY (PRWEB) January 01, 2014
The Snack Food Production industry benefited from increased demand for snacks over the past five years despite lower demand during the recession, which caused industry revenue to stagnate in 2009. According to IBISWorld Industry Analyst Hester Jeon, “As the economy returned to growth in the years following the recession, renewed consumer spending boosted demand for potato chips, tortilla chips, nuts and seeds.” Also, as the price of corn and wheat increased, which are major ingredients used in most snack foods, many larger producers were able to boost revenue by passing on higher costs to consumers in the form of higher prices.
Consequently, Snack Food Production industry revenue is anticipated to increase an annualized 3.4% to $33.1 billion over the five years to 2013, including expected growth of 2.4% in 2013.
Shifting food consumption trends have also impacted the performance of snack food producers in the past five years. Specifically, growing health concerns and awareness of the health consequences of eating foods high in sodium, fat and sugar have made consumers wary of consuming regular potato chips, tortilla chips and other snacks. However, the demand for nuts and seeds has grown as Americans have become more aware of these snacks' health benefits. “In response to growing health concerns, producers have introduced healthier varieties of existing products, including reduced-fat and reduced-sodium brand extensions, as well as 100-calorie packs to appeal to consumers who want to limit their portions,” says Jeon. These products, which are priced at a premium, have boosted industry profit in the five years to 2013.
The industry's future looks promising, with an improving global economy expected to boost both domestic and foreign demand for snacks produced in the United States. Projected increases in per capita disposable income will allow some consumers to trade up to premium brands and product segments like nuts, helping boost industry revenue growth. Additionally, as consumers demand healthier versions of existing products, producers are expected to continue introducing a wider variety of healthy snacks. As input prices stabilize, the industry's profitability will improve, enticing new companies to enter the industry. Furthermore, most of these new enterprises are anticipated to be niche, small-batch producers of premium snacks. Overall, industry revenue is anticipated to grow over the five years to 2018.
For more information, visit IBISWorld’s Snack Food Production in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes manufacturers that produce snack foods, including potato and corn chips, pretzels, popcorn and other similar snacks. Industry operators do not produce cookies and crackers (IBISWorld report 31182), bakery products (31181) or cereal and granola bars (31123).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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