Jun 04 2019
The Snack Food Manufacturing industry has faced a number of challenges over the past five years, including fierce competition, volatility in the price of domestic raw materials, and changing consumer preferences. However, industry revenue is anticipated to rise at an annualised 1.2% over the five years through 2023-24, to reach $1.8 billion. Increasing household disposable income and the rising popularity of healthy snack foods are anticipated to present opportunities to industry operators over the next five years.
Health and wellness concerns remain a major priority for Australian consumers. Urban populations, which have had greater spending power, are at risk of developing detrimental health conditions such as diabetes and obesity as sedentary lifestyles become more common. Therefore, many consumers have been concerned with healthier and more conscious eating, and have been spending more towards improving their health.
Health-conscious customers have been changing their consumption habits by moving away from traditionally high-fat and high-sodium snacks, towards high-value gourmet and healthier snack products, such as muesli bars, grain or wheat snacks, and a variety of nuts. To meet these changing consumer demands, industry firms have been expanding their product ranges, introducing products such as wholegrain and premium chips, or low-fat and low-carbohydrate versions of popular snacks.
Increasingly time-poor consumers have been consuming nutritious snack foods as meal replacements. Many traditional on-the-go and fast foods have offered consumers convenience, but have otherwise been nutritionally poor. In response, manufacturers have used labelling to emphasise the nutritional benefits of their snacks to enhance the creditability of these foods as genuine meal replacements. Consumers have been increasingly consuming food outside the home, therefore boosting demand for portable snacks. Snack makers have focused on providing smaller, snack-sized packages and adding more point-of-sale locations to encourage impulse buys.
Over the next five years, snack food producers must continue adapting to the changing tastes of consumers to remain relevant. Snack manufacturers will likely need to tailor their product ranges to better compete with private-label, substitute and imported products.