State of Global Snacking: New Growth Frontiers · State of Global Snacking: New Growth Frontiers SNAXPO, April 2019 Jared Koerten, Head of Packaged Food

State of Global Snacking: New Growth FrontiersSNAXPO, April 2019

Jared Koerten, Head of Packaged Food

© Euromonitor International

3

Euromonitor International

OVERVIEW


4

“Snackification” Trends

Health Trends Shape the Market

Snacking as Experience

Channel Shifts

“Snackification” Trends

Confectionery Sweet biscuits Snack bars

Ice cream Fruit snacks Savory snacks


6

StaplesSnacks

Sweet biscuits

Confectionery

Fruit snacks

Ice cream

Snack bars

Savory snacks

Baby food

Baked goods

Breakfast cereals

Dairy

Dessert mixes

Edible oils

Rice, pasta and noodles

Processed fruit and vegetables

Processed meat and seafood

Ready meals

Sauces, dressings and condiments

Soup

Spreads

7


$15.6 billionRepresented by 0.7% of global

packaged food in 2018

$191 billionAbsolute growth in snacks

between 2008-18

56%Snacks growth between 2008-18


8

Source: Euromonitor International

22.1% 22.5% 22.8%

77.9%

77.5%

77.2%

$0

$500

$1,000

$1,500

$2,000

$2,500

2008 2013 2018

Sale

s (U

SD b

illio

n)

Global Packaged Food: Snacks versus Staples, 2008-18

Staples

Snacks


9

Younger consumers have driven this “snackification” of food

SNACKIFICATION TRENDS

2.88 2.79 2.14 1.32

Source: Euromonitor International Lifestyles Survey, 2016 n:28,305

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Generation Z Millennials Generation X Baby Boomers

% o

f re

spo

nd

ents

How many times per week do you typically buy a snack outside the home?

0 Times

>1 Time

1-2 Times

3-4 Times

5-6 Times

7+ Times


10

Occasions matter: Snacks take the place of traditional “sit down” meals


Source: Euromonitor International Lifestyles Survey, 2011 n:15,933; 2017 n:28,466

+48.7%

+30.8%

+6.4%

+4.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

7-10am (Breakfast) 12-2pm (Lunch) 5-8 pm (Dinner) All Other Times

% o

f re

spo

nd

ents

On a typical day, at what time do you eat a snack?

2011

2017


11

Younger consumers are particularly fond of snacking as meal replacement



18.6%

12.9%

16.5%17.5%

11.1%

13.5%14.4%

6.9%

10.1%11.2%

5.3%

7.7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

7-10am (Breakfast) 12-2pm (Lunch) 5-8pm (Dinner)

% o

f re

spo

nd

ents

On a typical day, at what time do you eat a snack?

Generation Z

Millennials

Generation X

Baby Boomers


12

The battle for breakfast


Source: Euromonitor International Source: Euromonitor International

0%

1%

2%

3%

4%

5%

6%

7%

Breakfast Cereals Snack Bars Yogurt Sweet Biscuits

CA

GR

, 20

13

-18

Global Breakfast Categories, 2013-18

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

2012 2013 2014 2015 2016 2017 2018

Sale

s (U

SD m

illio

n)

Disruptive Brands: Global Sales, 2012-18Belvita KIND


13

Manufacturers target mornings with breakfast innovations


1. South Korea: Yohai Greek Yogurt Biscuits

2. Brazil: Dan’ Up & Nesfit

3. Saudi Arabia: Deemah Kleija

4. Philippines: Quaker Good Start

5. USA: Jack Links AM

1 2 3

4

5

Portability is critical for snack innovation

Source: Euromonitor International Lifestyles Survey, 2017 n:25,362

Single-serve Canisters

Pouches


14

0% 10% 20% 30% 40%

Ready meals are tastier than thefood I cook myself

I do not like to cook

I do not cook very well

Ready meals are affordable

I would rather spend my timedoing other things

I do not have time to cook

More convenient than cooking

What are reasons you eat pre-prepared meals (versus cooking)?


15

Shrinking pack sizes speak to the growing importance of portability



0%

10%

20%

30%

40%

50%

1-2oz 3-4oz 5-11oz 12-18oz 18-27oz 27oz +

Un

it s

har

e

Global Savory Snacks Packaging: Unit Sales by Pack Size

2012

2017


16

Satiety: Protein and fiber are vital


Chocolate Confectionery

Austria

Sweet Biscuits

USA

Savory Biscuits

UAE


-10% -5% 0% 5% 10% 15% 20% 25%

Sugar

Salt

Saturated Fat

Fat

Carbohydrates

Fiber

Protein

Calories

Change in consumption, 2011-16

Growth in Nutrient Consumption across Global Snack Categories


17

Are staples staging a comeback?



2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18p

Y-o

n-y

gro

wth

Growth in Global Packaged Food: Snacks versus Staples

Snacks

Staples


18

0% 5% 10% 15% 20% 25%

Middle East & Africa

Latin America

Eastern Europe

Asia Pacific

Australasia

North America

Western Europe

Value growth (2016-18)

Growth in Snacks and Staples, 2016-18p

Snacks Staples

“Snackification” is alive and well in developed markets




19

Traditional staples are still lagging; a fewstandout categories are driving growth


Total Pack Food Avg


Edible Oils

Ready Meals

Butter

Soup

Spreads

Baby Food

Sauces/Condiments

CheeseMilk

Yogurt

Other Dairy

Baked Goods

Breakfast CerealsProcessed Fruit & Veg

Processed Meat

Rice, Pasta & Noodles

0%

5%

10%

15%

20%

25%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Gro

wth

(2

01

6-1

8)

Share of total packaged food

Staples: Category Share and Growth, 2016-18

Cheese Breakfast cereal Spreads

Dips Processed fruit Soup


20

Packaging innovation creates a new segment

21


P3 Kraft Trios

Sargento Balanced Breaks

Hillshire Snacking Plates

Babybel Cheese & Crackers

Oscar Mayer Natural Source: Euromonitor International

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2013 2014 2015 2016 2017 2018

Sale

s (U

SD m

illio

n)

US Chilled Lunch Kits, 2013-18

Health Trends Shape the Market


23

Sugar becomes enemy number one

HEALTH TRENDS SHAPE THE MARKET


-10% -5% 0% 5% 10% 15% 20% 25%

Sugar

Salt

Saturated Fat

Fat

Carbohydrates

Fiber

Protein

Calories

Change in consumption, 2011-16

Growth in Nutrient Consumption across Global Snack Categories


24

Leading to strong growth in savory



Confectionery

Ice Cream

Savory Snacks

Fruit Snacks

Snack Bars

Sweet Biscuits

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

$0 $5 $10 $15 $20 $25 $30

CA

GR

, 20

13

-18

Per capita sales, 2018


25

Savory snacks get healthy around the globe



Nuts, Seeds & Trail Mixes

Potato ChipsTortilla Chips

Puffed Snacks

Rice Snacks

Vegetable, Pulse &Bread Chips

Savory Biscuits

Popcorn

Pretzels

Other Savory Snacks

2%

4%

6%

8%

10%

$0 $1 $2 $3 $4 $5 $6

CA

GR

, 20

13

-18

Per capita sales, 2018

Superfoods / Ancient grainsLocally-sourced

Colombia Philippines

Nigeria Costa Rica

Thailand Germany

Hungary Mexico


26


27

Clean label becomes a global priority


Croatia USA Chile

Georgia Bulgaria


20 30 40 50

Is low calorie

Contains added vitamins

Has no added fat

Has no artificial ingredients

Does not contain GMOs

Has no trans fats

Has no added sugar

Has no artificial sweeteners

Is all-natural

% of respondents

What factors do you look for on food labels?


28

Organic and free-from lead the way


Romania

Organic

USA

Organic

Spain

Vegan

Israel

Gluten-Free

14%CAGR

9%CAGR

* Organic snack categories include Savory Snacks, Confectionery, Yogurt, Nuts/Seeds, Ice Cream, Sweet Biscuits, Cereal Bars and Fruit Snacks ** Free-From snack categories include Yogurt (Dairy), Ice Cream (Dairy), Sweet Biscuits (Gluten), Cakes (Gluten)


$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2013 2014 2015 2016 2017 2018

USD

mill

ion

Organic and Free-From Snacks, 2013-18

"Free-From" Snacks* Organic Snacks**


29

Innovation in fortified snacks goes beyond protein and probiotics


Fortified snacks

CaffeineUS:WrigleyAlert

CollagenColombia:ColombinaGrissly

BotanicalsJapan:Lotte Wakan

GinsengRussia:LyubelEco

Snacking as Experience

31

The rise of the “green” shopper


Alternative ethics

Plastic-free

Religious label reinvented

Plant-based consumption

Clean label reformulation

Concerns drive ethical labels

$0

$50

$100

$150

$200

$250

Total Snacks

Sale

s (U

SD b

illio

n)

Global Snacks: Ethical Labels by Type, 2016

SustainableSourcing

Animal Welfare

Clean Label

Religious Labels

SustainablePackaging

64.7% of global consumers try to have a positive impact on the environment through everyday actions

32




33

Snack innovations cater to demand for ethical labels

SNACKING AS EXPERIENCE

Costa RicaConservation

USAConservation / Fair Trade

SwedenFair Trade

FinlandSustainable Proteins

SwitzerlandSustainable Proteins

LatviaFood Waste

TaiwanFood Waste

USAFood Waste

Texture / Mouthfeel:Savory snacks

Texture / Mouthfeel:Choco-bakery

Argentina

Milka Bis - Mondelez

USA

Cookie Layer Crunch – Hershey

Switzerland

Petit Beurre Lait – Cailler/Kambly

Dominican Republic

Chokis Mix – Gamesa

Combinations

Cheez It Duoz - USA

Mouthfeel

Tasu Mango Chips - Guatemala

Format

LaFabrique Browkie - France

Texture

Babol Filifolly Gum - Indonesia


34

Channel Shifts


36

Are unplanned purchases under siege?

CHANNEL SHIFTS

Source: Euromonitor International Lifestyles Survey, 2013 n:16,327; 2015 n:16,353; 2016 n:28,305; 2017 n:28,487

21%

22%

23%

24%

25%

26%

27%

28%

2013 2014 2015 2016 2017

% o

f re

spo

nd

ents

I often make impulse purchases

28%

29%

30%

31%

32%

33%

34%

35%

36%

37%

2013 2014 2015 2016 2017

I regularly buy myself small treats because I

deserve them

32%

34%

36%

38%

40%

42%

44%

2013 2014 2015 2016 2017

I like to browse in stores even if I don’t need to

buy anything


37

The challenge of e-commerce

CHANNEL SHIFTS

DeliveryClick and Collect

Fewer store trips

Third-party delivery Pureplay online retail

38

Click & collect



39

The challenge of e-commerce

CHANNEL SHIFTS

Changes at the front-

end

Focus on the store perimeter

Fewer impulse

moments


40

Changing the shopper journey

CHANNEL SHIFTS

Zone 1

Self checkouts Automated stores

41

Scan & go



42

Changing the shopper journey

CHANNEL SHIFTS

Zone 1

Zone 2


43

Foodservice and prepared food Fresh food In-store meal kits


43

Image: NACS


44

Threats to unplanned in-store purchases

CHANNEL SHIFTS

Focus Areas

Strategies/Approaches

Challenges/Threats

Market Shifts Omnichannel

E-CommerceDeclining trip

frequency

Online Focus Position brands to win in e-commerce

New merchandising

New models

New logistics

In-Store Impulse zones are

losing traction

In-Store FocusReconsider store-

based investments

Prioritize the right channels

Improve trip

efficiency

Snacks as destination

retail

Conclusion

“Snackification” is changing how consumers eat

Young consumers snack in place of meals; portability

and satiety are crucial

Staple foods innovate with format and packaging in

order to compete

Better-for-you trends shape the

market

Sugar as public enemy number one; clean label

drives health trends

Superfoods / ancient grains, local ingredients and new

types of product fortification

46

New paradigms are shifting consumer

demand

The rise of ethical consumerism

Experiential snacking – texture, mouthfeel, combinations

Dramatic shifts in retail; new challenges for impulse


Thank YouJared Koerten, Head of Packaged Food

[email protected]

Facebook.com/euromonitor

@Euromonitor

Linkedin.com/in/jaredkoerten

Documents

State of Global Snacking: New Growth Frontiers · State of Global Snacking: New Growth Frontiers SNAXPO, April 2019 Jared Koerten, Head of Packaged Food