In 2014, global retail value sales of sweet and savory snacks are expected to grow by 7% to reach an all-time high of US$125 billion. Driven by innovations in flavor, portability and packaging as well as growing marketing investment from multinationals, chips/crisps and extruded snacks together represent almost half of the category’s sales. Meanwhile, fruit snacks and nuts will record the highest value growth in 2014, at 8%, due to the consumer trend toward naturally healthy products, led by growth in Latin America, but also Western Europe, where nuts will record double-digit growth in both Germany and Turkey, the third and fourth biggest nut markets globally.

2014 sees a shift in Top 10 companies

PepsiCo, Purchase, New York, US, remains the unchallenged leader of the category, commanding a forecast 29% share of the global market in 2014.

2013’s fifth biggest player, ConAgra Foods, Omaha, Nebraska, US, is expected to fall two places, behind Want Want Holdings, Taiwan, and Calbee Foods, Tokyo, to rank seventh, due to burgeoning demand in Asia Pacific.

Following its acquisition of London-based Unilever’s meat snacks business in April 2014, Link Snacks, Minong, Wisconsin, US, will take the eighth spot, leapfrogging both Snyder’s-Lance, Charlotte, North Carolina, US, and General Mills, Minneapolis, Minnesota, US.

Consumer-led innovation key to PepsiCo’s leadership

PepsiCo leads sweet and savory snacks with $US36 billion retail sales in 2014, which is more than 10 times that of nearest rival Kellogg Company, Battle Creek, Michigan, US, and almost three times that of global private label sales. PepsiCo’s success is mainly down to two factors: its wide geographical reach and its ability to rapidly respond to local tastes. The snacks giant is present in more than 70 countries and commands over half of the snacks sales in 13 markets, among which are some of the world’s fastest-growing countries, such as Egypt and Argentina, as well as the world’s biggest ones, such as Mexico and Brazil.

In addition, the company leverages its brands to cater to local and even individual tastes. The “Do Us a Flavor” campaign is a perfect example of this. The campaign, which has been deployed in 20 different countries, gives consumers a sense of individuality and freedom to create their own crisps and have a stake in the product’s yearly sales if their preferred choice makes it onto the shelves.

Localization of its global brands is also key to PepsiCo’s success. While the company is promoting Cheddar & Red Onion Chutney in the UK as its new sensational flavor, in China the traditional Peking Duck chips flavor is popular. PepsiCo has plans to go one step further and develop flavors for different regions in China and, eventually, India, where the success of its local Kurkure brand is leading the company to replicate it in Canada and the Gulf countries.

Protein hype explains Link Snacks’ growth

PepsiCo might be the world’s biggest snacks company, but it is not the fastest growing — that distinction goes to Link Snacks, the owner of Jack Link’s beef jerky. The company is expected to show an impressive 31% value increase in 2014 — the highest rate seen among the world’s top 50 snacks players. This is partly due to its acquisition of Unilever’s meat snacks business back in April and subsequent access to a number of Western European markets, including the UK, Germany and The Netherlands, where snacks consumption stands at 7 kg per person, one of the highest rates globally. The acquisition also makes the UK Link Snacks’ second largest market after the US, ahead of Canada.

The rising appeal of protein is also boding well for Link Snacks. As Western consumers are switching from a carb-based to a protein-based diet to promote satiety, aid in weight management and build muscle recovery, meat-based snacks are regaining their popularity. The trend is most prominent in the US but also picking up fast in the UK and Germany, where consumers are offered different ingredient choices, such as poultry and bacon, as well as different formats ranging from bite-size pieces to bars.

Nuts benefit from the confectionery checkout ban

The protein hype is not unique to meat snacks. Nuts are rapidly gaining popularity, in particular among those consumers who avoid meat. The top five markets will account for more than half of the value growth seen during 2009-14, with Germany, Turkey and China recording double-digit growth in both 2013 and 2014. Although the recent hazelnut shortage in Turkey, the world’s largest producer, might put upward pressure on retail prices and, consequently, volume sales, thereby resulting in fewer hazelnuts in mixed nut packs, retailers’ moves towards healthier tills may work in the category’s favor. With Tesco, Lidl and Aldi banning confectionery sales from their checkout displays in the UK, the world’s fifth largest nut market, nuts (and fruit snacks) could enter a golden age, at least in Western Europe.

For further insight, please contact Pinar Hosafci, food analyst at Euromonitor International, at pinar.hosafci@euromonitor.com.