Today's WSJ:
America Is Binging on Snacks, and Food Companies Are Eating It Up
The ‘snack-ification’ of U.S. diets has cookie and candy giants drooling
U.S. consumers are gorging on snacks, fueling boom times for cookie and candy giants while other packaged-food companies vie for bigger shares of the snack aisle.
Nearly half of U.S. consumers are eating three or more snacks a day, up 8% in the past two years, according to Circana Group, a market-research firm. U.S. snack sales rose to $181 billion last year, up 11% from the year prior, the firm said.
That has translated into big business for companies such as Hershey and Mondelez International, which make products from Oreos cookies to Ritz crackers and SkinnyPop popcorn.
Between fiscal 2019 and 2022, Hershey’s sales grew 30% while Mondelez’s rose 22%, outpacing other major food companies.
“Snacking is where the consumer is going,” said Dan O’Leary, chief growth officer at Hostess, which has expanded its lineup of sweet snacks since the maker of Twinkies was bought out of liquidation a decade ago.
Amber Murayi, Hershey’s vice president of strategy, said that while snacking has long been part of U.S. consumers’ lives, the pandemic drove a significant increase. It spurred demand for foods such as popcorn and candy, which people have continued eating during family movie nights or other group activities, she said.
Hershey since 2017 has spent billions of dollars buying up brands such as SkinnyPop and Pirate’s Booty to grow its lineup of salty snacks. Last month, the candy maker said it would acquire two manufacturing plants primarily for SkinnyPop popcorn, as it builds a new facility to produce ingredients for chocolates.
Zoë VanHoose, who credentials doctors at a children’s hospital in Cincinnati, Ohio, said a jam-packed schedule has led her to snack more in the past five to six years. Rather than eating three square meals, she said she nibbles crackers or carrots and celery throughout the day. On Fridays, she treats herself to Cheetos.
Kroger, the biggest U.S. grocery-store operator by sales, is selling more products catering to snackers, such as boxes with 24 or 36 smaller snack bags inside, said Chief Executive Rodney McMullen. Mondelez CEO Dirk Van de Put said that snacking has generally become more acceptable. “Indulgence will be big no matter what,” he said.
As food prices soar and consumers increasingly look for cheaper alternatives to name-brand products, snack makers have been insulated because they tend to face less competition from lower-priced store brands, said Bernstein analyst Alexia Howard. Often consumers will stick with their chosen brands of chocolate and other snack foods even when prices increase, Ms. Howard said.
Last month, both Hershey and Mondelez raised their sales and profit growth forecasts for the year following double-digit sales increases in the companies’ latest quarters. Shares of Hershey and Mondelez are up about 21% and 18% year to date, respectively, surpassing the S&P food and beverage index’s increase of roughly 4%.
Hostess last week reaffirmed its guidance for sales growth of 4% to 6% in 2023, following a 50% increase in revenues between 2019 and 2022. The company’s shares are up about 18% year to date.
Nick Graham, global head of insights and analytics for Mondelez, said millennials and Gen Z consumers, generally in their teens to early 40s, on average eat about 10% more snacks daily compared with other generations, partly due to what he said were their busier lifestyles.
“Millennials took something that had a negative connotation with older generations—parents would tell you ‘don’t snack and spoil the meal’—and turned snacks into the entire meal itself,” said Andrea Hernández, author of Snaxshot, an online newsletter focused on food and beverage trends.
The rise of videogaming has boosted snack consumption, according to Sally Lyons Wyatt, executive vice president of Circana’s client insights division. U.S. snack sales will likely grow between 7% and 9.5% in 2023, compared with 5.5% growth for all food and beverage, Circana estimates………it continues but is too depressing.
The Top Selling Snacks in the US by dollar sales are Potato Chips, $10.5 Billion and #2 Tortilla Chips, $8 Billion.
One factor in the Satiety Index is DEHYDRATION, although the PE of pork rinds looks good, its satiety is non-existent. Pork rinds are just like potato and tortilla chips. Same with the hedonic factor, artificial sweeteners are no better than sugar.
Whatever WHO writes will fall on deaf ears as Americans eat More Snacks.