Redefining Snacks: From Conventional Snacks to Snack Replacements

June 2016

The story of snacks outperforming the rest of the market is one that is now a little overplayed. It is true that snacks have grown faster in recent years, but what is also true is that a growing segment of the non-snack food market is rebranding itself as snack replacements. This briefing explores how these snack replacement products have been performing by segmenting the food market according to pack size. With a variety of mini food items now on offer, the snacks proposition suddenly increased

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The lines between snacks and the rest of the food world are becoming blurred leading to new opportunities for those positioned outside the snack aisles         

Over time, busier consumers’ lifestyles, the changing role of women in the household and other cultural factors have led to consumers shifting away from sit-down meals at home towards irregular snack consumption out of the home. The rise of snacking has not only led to the development of the conventional snacks industry, but is now starting to change how non-conventional snacks are sold to consumers, creating a new field of competition for snack brands.

Opportunity for snack replacements grows as the size of the conventional snacks market grows              

The data suggests that consumers that are more accustomed to eating conventional snacks tend to be far more likely to also purchase snack replacements. This revelation has implications for brands on both sides of the snacks fence and will ultimately lead to conventional snack brands extending their reach into new territories and non-snack brands building a greater portfolio of products suitable for on-the-go consumption.

Savoury products winning in the snacks space as concerns over sugar stem demand for sweet snacks

The “War on Sugar” led by the media and activist groups has somewhat dented the potential growth of sweet snacks due to their reliance on sugar (and to a lesser degree, sweeteners). This has left a much bigger space for savoury snacks to grow, potentially yielding much better sales growth in future.

Milk drinks are fast becoming the vehicle of choice for sweet snacking  

Viewed as naturally nutritious, dairy products, in particular liquid varieties, have become an obvious option for brands looking to build a “healthy/ier snack” line extension. Chocolate and cereal brands have so far gained the most traction.

The rise of snack replacements will lead to a shifting competitive landscape in the snacks space

Snack companies such as Mondelez may currently think of their biggest rivals as Mars or PepsiCo but the reality is that as the blurring of categories continues and the very definition of “snacks” changes, Yili, Dean Foods and Lactalis may be the real competitors of the future.

introduction

Scope
Key findings
A note about the data used in this briefing
What are “Conventional Snacks” and “Snack Replacements”?
Categories denoted as ‘Conventional Snacks’
The range of pack sizes denoted as “Snack Replacements”

SNACKING: HOW OFTEN AND ON WHAT?

Key facts and figures on snack food versus snack replacements
Over 25% of impulse food purchases are from snack replacements
Snacking linked to greater consumption of snack replacements
Mars: Extending the Snickers brand into the road less travelled
Mondelez: Leveraging its snack expertise on a cheese brand
Top snack markets: UK and Netherlands show strong switch
The UK shows an appetite for single-portion premium puddings
On-trend portable yoghurt in the Netherlands captures new audience
Bottom impulse food markets: Indonesia and China exemplify shift
Indonesian snack scene dominated by instant noodles
China: Boldly take a cheese brand into the sweet snacking market

ASSESSING SWEET SNACKING AND SAVOURY SNACKING OPPORTUNITIES

The world has a preference for sweet snacking…
…but four Asian markets prove exceptions to the rule
Vietnam: Instant noodles the cheapest snacks for consumers
Savoury snacking taking over in most markets
Trends underlining the shift from sweet to savoury snacking
“ Swavoury ” options and vegetable chips steal confectionery share

THE UNSTOPPABLE RISE OF DAIRY PRODUCTS AS SNACKS

Across the world dairy is fast becoming the snack of choice
The transformation of dairy: From commodity to healthy snack
Snack consumption of drinking milk increasing almost everywhere
The four drinking milk trends driving dairy snack consumption
Micro and snack size yoghurt preferred in most countries
Snacking yoghurts being used to meet a variety of purposes
Soft and processed cheese are best suited for snacking…
…but occasion-driven formats can also work with harder cheese

Recommendations

Competition between conventional snacks and snack replacements
Danone, Kraft Heinz, Yili and Mengniu among new snack rivals
Food for thought
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