As consumers became more health conscious, producers launched healthier snacks.
Los Angeles, CA (PRWEB) August 29, 2013
The Snack Food Production industry benefited from increased demand for several of the industry's products during the past five years, and grew in line with rising household disposable income. As the price of corn and wheat increased, which are major ingredients in most snack foods, many of the larger industry players were able to drive revenue by passing on cost increases to consumers in the form of higher product prices. According to IBISWorld Industry analyst Jeffrey Cohen, "These trends resulted in greater demand for industry products from grocery wholesalers and retailers." Consequently, industry revenue increased at an annualized rate of 2.3% to an estimated $31.4 billion during the five years to 2013 and includes expected growth of 0.8% from 2012 to 2013. During the past five years, a growing number of consumers became more aware of the negative health effects of eating high-sodium foods. As a result, consumers reduced demand for salty and oily chips and insisted that industry producers introduce healthy versions of their products. Producers quickly adapted to changing consumer tastes by offering more healthful options, such as 100-calorie packs and low-sodium versions of existing products.
The industry's future prospects look promising, with continued revenue growth expected during the five years to 2018. "Forecast increases in household disposable income will help drive demand for industry products," says Cohen. Additionally, as consumers persistently demand healthier versions of existing products, producers will continue to introduce a greater variety of healthier product options.
The Snack Food Production industry has a moderate level of market share concentration. Concentration increased slightly over the past five years mainly because larger players have engaged in acquisitions to expand their product mix and market reach. For example, ConAgra Foods completed its acquisition of National Pretzel Company in 2011 and acquired Ralcorp in 2012, its largest transactions to date. While the larger companies continued to gain market share, small to medium-size companies struggled to compete during the recession.
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. This industry does not include cookies and crackers (IBISWorld report 31182), bakery products (31181) or cereal and granola bars (31123). Industry establishments primarily prepare nuts, process grains or seeds, and manufacture chips, popped popcorn and similar snacks.
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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