The Nielsen survey of more than 30,000 online consumers in 60 markets revealed the figure equated to 2 per cent year-on-year increase between 2013 and 2014. Much of the growth came from Europe ($167bn) and North America ($124bn), which both outpaced emerging regions following a year of flagging demand and shifting consumption habits.
Sales in Asia-Pacific ($46bn) and Latin America ($30bn) climbed 4 per cent and 9 per cent respectively, while Middle East and Africa ($7bn) posted a 5 per cent rise. The slowdown in developing markets has knocked the profitability of many food makers forcing them to realign their short-to-medium term strategies in order to improve margins.
Mondelez and Unilever are among several companies to conduct internal overhauls since the turn of the year to identify new growth streams. Opportunities for snack makers are likely to come in the form of better health, nutrition and wellness snacks, according to the report.
It found that non-sugary snacks closely aligned with meal-replacement foods are showing strong growth with sales of dips and spreads jumping 6.8 per cent in Europe – the fastest growing snacking category for the region.
Sales of savoury snacks such as crackers and rice cakes increased 21 per cent in the last year in Latin America. Elsewhere, meat snacks including jerky and dried meat rose 25 per cent in the Middle East and Africa and 15 per cent in North America.
Susan Dunn, executive vice president for global professional services at Nielsen, says marketers need to understand the “why before the buy” through process consumers go through in order to overcome the challenges ahead.
“Demand is driven primarily by taste and health considerations and consumers are not willing to compromise on either. While conventional cookies, cakes and confections categories still hold the majority of snack sales, more innovation in the healthy snacking and portable food space is necessary to adjust to this changing dynamic”, she adds.
Nearly half (45 per cent) of consumers believe it is important snacks contain natural ingredients. The absence of artificial colours (44 per cent), genetically modified ingredients (43 per cent) and artificial flavours (42 per cent) are also rated very important, while one in four consumers feel caffeine-free products are more desirable.
Less is more for roughly one third of respondents who feel it is key for snacks to be low in sugar (34 per cent), salt (34 per cent), fat (32%) and calories (30 per cent).
Dunn adds: “There is a perception that snacks are intended more for in-between meals than for actual meal replacements. But busy, on-the-go lifestyles often dictate a need for quick meals, and many opt for fast food options that can be high in calories and low in health benefits. There is a massive untapped opportunity to gain market share in the nutritious, portable and easy-to-eat meal alternative market that snack manufacturers could fill.”