U.S. snack food exports rose for the second consecutive year in 2004, up 8.3% from 2003 to $1.3 billion. Although U.S. snack food exports to Mexico fell 2% in 2004, exports to Canada increased 18%, and the Japanese/ Chinese Economic Area displaced Europe to become our second largest export market, as a result of a 9% increase in U.S. snack food exports to that region and a 23% decline to Europe.
Natural and Organic Foods
With potentially huge consequences for all types of food products including snacks, retail competition is driving rapid market growth in natural/organic products, with organics particularly serving as a key point of differentiation both within and across the major retail sectors.
At the forefront of this trend is Whole Foods, which plans to increase its store count by 25-30 stores per year through 2010, with the stated goal of $12 billion in annual sales. Trader Joe’s has plans for continued expansion nationwide as do smaller natural supermarket chains including Earth Fare, Sprouts Farmers Market, and Sunflower Markets.
Mainstream markets such as Safeway and SuperValu have introduced store-brand organic products in response to specialty chains including Whole Foods. For example, in January 2006 SuperValu opened its first Sunflower Market store in Indianapolis, and the new chain is expected to expand to at least 50 stores in the next five years
Market Overview
Based on Information Resources, Inc. (IRI) data for mass-market retailers, Packaged Facts estimates that U.S. retail sales of snack foods through all outlets totaled $61.4 billion in 2005, up 1.5% over 2001 sales.
Candy forms the largest snack food product category, with retail sales of $19.9 billion in 2002, for a market share of 32%. Ranking next is the salty snacks category, with retail sales approaching $12 billion, followed by cookies and bakery snacks, approaching $8 billion.
Salty snacks is the largest snack category, at 22.5% of the total IRI-tracked sales in 2005, followed closely by snack candy, at 20.5%, and then by cookies and bakery snacks, at 17.2%.
Yogurt snacks and food bars are also the top growth categories in terms of both dollar gains and compound annual growth rate during 2001-2005 period. Yogurt snacks lead in dollar growth, with gains of $721 million, followed by food bars and nut snacks, at $465 and $422 million, respectively. Popcorn and rice/popcorn cakes and crackers meanwhile experienced losses of $45 million, although cookies and bakery snacks category took the biggest hit, down $344 million.
Clustering the snack food product segments in sweet and salted classification, the sweets have it with nearly $18.1 billion in sales in 2005, for approximately 58% of the snack food market according to IRI sales tracking. Salted snacks, in turn, weigh in at $13.1 billion, or 42% of the market.
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