blueberries muffins close up in a basket

As American consumers get increasingly busy, snacks and packaged baked goods are gaining ground. To be successful in this sector of the food industry, processors must keep a finger on the pulse of upcoming trends.

Snack foods

According to Euromonitor, snack sales make up 40% of the $370 billion U.S. packaged food market, and sales are expected to increase by 2% annually through 2019.

Studies disagree on who's driving much of this growth. The Euromonitor analysis found that Millennials are the biggest snackers, while a study by the NPD Group found that Baby Boomers snack 20% more than the younger generation.

In “How America Eats,” IRI explores the state of the snack food industry and identifies potential opportunities. Here are some of the highlights.

The snacking habit is alive and well, especially among children and young adults

  • Americans consume an average of 2.7 snacks per day, and 46% of Americans snack three or more times daily. Sales of variety packs and multi-packs are increasing.
  • Early-day snacking is on the rise, with 57% of 2016 respondents saying they snack in the morning, compared to 29% in 2010. People aged 18-34 are driving the majority of early morning snacking, and kids play a major role as well.
  • In general, households with kids snack more often, buy larger-sized packages, and bring meals or snacks to work or school more often. They also seek natural/organic snacks, want biodegradable packaging, and look for snacks that can be eaten on-the-go.

Consumers want fresher, healthier snacks

Consumers are looking for fresher, healthier snacks.

  • More than half of consumers want snacks that contain vitamins/minerals and provide health benefits beyond nutrition.
  • 44% of consumers want natural/organic products, and 60% want snacks that deliver an energy boost.
  • Nearly half of consumers look for snacks that are high in fiber or provide a serving of fruit or vegetables.

But…they still aren't willing to give up their guilty pleasures.

  • While healthier snack sales were up by 3.8% in 2015, indulgent snack sales still rose by 3.4%.

Top factors influencing purchase decisions include price, quality, and value

Consumers want quality products at a good price, and they're willing to pay more for higher quality.

  • Premium products are seeing the most sales growth, as compared to moderate- or low-priced products.
  • 92% of respondents say that taste is important, and 88% say they look for flavors they prefer.
  • 74% of consumers report that price influences their snack purchase decisions, and 68% look at price before choosing a product.
  • 82% of consumers look for snacks that are a good value.

Baked goods

Sales of packaged baked goods rose about 2% in 2015, according to Nielsen data reported by Frozen and refrigerated baked goods are seeing declines in sales, while cookies, snack cakes, crackers, and baked breads are gaining. There's evidence that the gluten-free niche may be slowing. Meanwhile, “indulgence remains a solid trend.”

Food trend expert Claire Nuttall predicts the following trends for 2016:

  • “Good,” “honest” ingredients, with a potential “premium craft angle”
  • An increase in the use of beans and seeds as sources of natural protein
  • Clean labels with limited ingredients and clear information
  • “Free-from” products without preservatives, cholesterol, GMOs, etc.
  • Less-sweet offerings
  • Protein- and nutrient-rich snacks
  • Colorful, vibrant fruit and vegetable snacks
  • Raw and “pure” products that highlight “honesty, transparency, and integrity”

Implications for food processors

What does this all mean for food processors looking to up their game? Here are a few conclusions we can draw from the data.

In the overall snack category, breakfast-focused products may be a good place to explore as morning snacking increases. Snacks that offer freshness, variety, and health benefits are also important, perhaps especially for families and kids. Flavor is crucial, and on-the-go, snack-as-meal products seem to be gaining ground. While price continues to be a factor, sales of premium products are showing the strongest growth.

With baked goods specifically, processors may want to consider healthy products that use natural, protein-rich ingredients. As in other food sectors, consumers are looking for clean labels and “free-from” products. Baked-goods preferences may be trending toward less-sweet and nutrient-rich options… but indulgent treats will always have a place in snacking as well.