Increasing Incomes, Healthy Trend Will Drive Snack Sales

Aug. 29, 2013

The snack industry's future prospects look promising, with continued revenue growth expected during the next five years to 2018, according to IBISWorld, an independent source of industry and market research. "Forecast increases in household disposable income will help drive demand for industry products," said IBISWorld Industry analyst Jeffrey Cohen, in a prepared statement. 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 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 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 percent to an estimated $31.4 billion during the five years to 2013 and includes expected growth of 0.8 percent 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.

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