The US contributes the most to the global forecast upgrade
Unlike the previous quarter, in 2017 Q3, forecast retail value sales have seen a sizeable upgrade across all snack categories, with confectionery seeing a USD385 million upgrade, followed by savoury snacks with USD355 million. The US accounted for over half of the global upgrade in both confectionery and savoury snacks, which are two of the biggest snack categories both globally and within the US market. The upgrade in the US forecasts reflect the restored confidence in the financial markets following the election results and the resilience of the global economy. The reduced likelihood of a recession in the Eurozone has also resulted in upgrades in a number of European markets. In percentage terms, confectionery in Spain and Germany has seen a bigger upgrade (and growing investment) than the US market.
Retail Value Sales, Snack Industry
Source: Euromonitor International
Downgrades in Indonesia and Nigeria contradict different growth drivers
Among the biggest emerging markets, Indonesia and Nigeria have seen the strongest forecast downgrades in snacks. Nigeria continues to see a downgrade as its economic recovery remains protracted, while Indonesia is expected to see a modest slowdown in its GDP growth. Due to a strong reliance on impulse purchases and premiumisation, the forecast prospects for snacks are heavily impacted by the economic outlook in both markets.
While GDP per capita and price are predicted to have a slightly negative impact in Nigeria, they are expected to have a positive impact in Indonesia. Unlike in Indonesia, in Nigeria population growth is set to be the main driver of retail sales.
Savoury snacks sees the biggest upgrade globally
Globally, savoury snacks categories have seen a bigger upgrade in growth than their sweet counterparts, driven by consumer macro trends such as the war on sugar, weight management and the rise in gluten-free diets.
Popcorn specifically has seen a major boost in popularity across developed markets, due its lighter texture, perceived health benefits and flavour sophistication, combining both sweet and savoury elements.
As a result, the category has seen many successful premium launches, as showcased by the positive impact of price. Premiumisation has also been a major driver of growth in fruit snacks, nuts, ice cream and chocolate confectionery.
Retail Value Sales, Savoury Snacks
Source: Euromonitor International
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