This is the third in our series on Millennial snacking. Previously, we have talked of general trends of 18-34 year old snacker’s and in particular, the strong desire for more natural and healthy snacks – but not “diet” snacks. In this post we will try to identify snack foods areas that are undoubtedly being influenced by Millennials.
Although the snack category landscape is vast with numerous influences, there are still some significant trends being noted.
Examining snack dollar sales in the United States from three date years: 2005, 2010 and projected for 2015, by category (in billions of U.S. dollars) it is interesting to note that snack bars and granola bars, snack nuts, seeds and cheese snacks are all projected to have solid growth, while other areas are slowing down. This is consistent with Millennials seeking healthier between meal snacks.
However, percentage increases tell a more compelling story. IRI, “State of the Snack Industry” 2013 data comparing 2012 versus 2011, showed that snack and granola bars were experiencing a 2.6 percentage increase and yogurt a 1.5 percent increase in the category. These are influenced, in part, by Millennial buying behaviors. Food Business News (November 11, 2013), reported a year to year sales increase of granola bars versus 2012 of 4 percent, with sales climbing to a whopping $5.3 billion! Greek Yogurt is going through the roof; in 2012 sales were $7.3 billion and by 2017 it is expected to climb to $9.3 billion (Food Business News, February 18, 2014).
Why will Yogurts remain hot? According to Advertising Age on Millennial food trends (July 11, 2012), “Calcium is king…Among Millennials, 49% buy dairy and calcium-rich foods on a weekly basis, scoring higher than exercise (40%), eating whole grains (34%) and getting plenty of fruits and veggies (22 %). No wonder Greek yogurt is hot.”
Snack dollar percentage sales growth in the United States in 2012, by category (versus 2011), also shows strong trends in the more natural area; for example, snack nuts/seeds/corn nuts lead all snack foods by + 10.9; yogurt by + 7.4 and snack/granola bars by + 7.0. These are not total sales but percentage growth. With double-digit growth, nuts and seeds (such as almonds, pistachios, nut mixtures and sunflower seeds) have strong between meal health appeal that matches Millennial preferences.
Looking at snack nuts/seeds/corn nuts category alone, in the private label category sales shot up from $660 million to more than $1 billion, just from 2011 to 2012. More classic snacks such as chocolate candy and salty snacks, were up slightly more than + 4.0.
Baking Business (March 12, 2014), in an article entitled: “Nuts, seeds gaining share in global snacks market,” showed that snacks with nuts and seeds accounted for 37 percent of all new products globally and that in the U.S. 32 percent of all new snack products were nut and seed based. Much of this is being driven by Millennial healthy snack trends. According to the National Confectioners Association, in 2013 versus 2012 there was a +2.3 percent increase in nut and seed sales and + 4.0 percent increase in granola bars. Salty snacks are also increasing + 4.8 percent. However, 2014 trends are also seeing more snacks with ingredients such as kale, quinoa, vegetable chips and other ingredients perceived to be more healthy.
The category leaders are all spelling “good health.”
Looking at the Target
How do savvy marketers reach this target? The website MillenialMarketing.com attached percentages to what we already perceived.
By 2012 “‘Roughly 93% of Millennials used a mobile phone and among that about 63% used smart phones. Millennials also have the highest penetration of Internet usage, with 93% of Millennials using the Internet, 89% of Gen X and 77% of Baby Boomers.” In terms of the social media e.g. Twitter, Millennials are far and away the biggest users. By 2014, 93 percent of Millennials said their smart phones were important to them (July 2014, New York Post).
A large percentage of Millennials wanting healthier snack food choice to munch on between meals or as a meal substitute will be reached not so much by traditional media, but by the social media and devices. Marketers must take note.