Best Positioned Snack Brands For Future Growth
Consumers continue to love snacking ! Total snack food sales increased to $ 130 Billion in 2015 with growth being led by categories that are perceived as being better for you like RTE popcorn, meat snacks, premium dark chocolates, vegetable crisps and premium snack nuts.33% of consumers said they are snacking on healthier products this year than in 2015. Indulgent products still have a role but consumers are actively seeking out better for you alternatives. Total snack category sales are still led by Frito Lay, Kelloggs, Mondelez and Snyder's Lance but with sales of $130 Billion there is plenty of room for many companies.We believe the following smaller brands are some of the best position products for future snack sales growth.
Brookside Chocolates
While the base chocolate sales are struggling, premium chocolates like Brookside continue to perform well. Brookside is owned by Hershey (HSY) and delivers premium indulgence with tropical fruit flavors like Goji ,Pomegranite and Acai and Blueberry. Hershey also recently completed acquisitions of Bark Thins and Krave beef jerky. Dark chocolates with high antioxidant capabilities of 75% or more cacao powder are also performing well for companies like Ghiradelli's and Lindt and Sprungli.
Jack Links Beef Jerky
The meat snack category led by Jack Links as the leader in the beef jerky segment has been a star performer in the last few years. Consumers looking for high protein snacks have made the meat snacks category one of the fastest growing snack categories. Jack Links owns a 57% share of the $1.4B beef jerky market segment and continues to grow with new products and innovative advertising. It's Feed your Wild Side campaign featuring Big Foot appeals to millennials looking for more high protein snacks. We expect a larger food company like PepsiCo (PEP),Hershey ( HSY), Hormel ( HRL) or Kellogg's (K) to buyout Jack Links at a premium price in the next 2 or 3 years.
Angie's BoomChickaPop
The RTE popcorn category has been the fastest growing snack in 2015 up more than +25% in total sales. The RTE popcorn category is now $1.1 B in sales and led by PepsiCo's Frito Lay's Smart Food brand and Amplify's (BETR) Skinny Pop. Angie's BoomChickaPop brand is a privately owned company out of Mankato Minnesota. Sales growth was +46% in 2015 and continues strong in 2016.Both Skinny Pop and Smart Food have also enjoyed robust growth as consumers look for lighter, better for you salty snack alternatives. The RTE popcorn segment also appears to being taking sales from microwave popcorn leaders Orville Redenbacher owned by ConAgra ( CAG) and PopSecret owned now by Snyders Lance (LNCE) after the Diamond Foods buyout. Look for Con Agra, Amplify, Frito Lay or Kelloggs to scoop up Angie's in the future.
Boulder Canyon
Owned by Inventure Foods (SNAK) Boulder Canyon is an upcoming brand with better for you chips and extruded snacks. Their kettle cooked chips come with innovative flavors and use olive oil and other better for you ingredients in the $ 7.2 B potato chip market.Inventure also has a strong portfolio of extruded snacks including veggie sticks and Jalapeno poppers under TGIF licensed brand. The company has struggled because of lack of scale and challenges in it's other divisions but the Boulder Canyon brand has a bright future.
Kars Snack Mixes and Nuts
Kars $ sales grew +21% in 2015 and is a well positioned brand in the growing trail mixes and snack nut market. Consumers continue to look for more complex flavors with nut and fruit combinations. They compete in the $1.1 B nutritional snack mix market vs. Kraft Heinz Planters brand(KHC) While private label still leads this category with more than 48% of all sales we believe Kars is well positioned with their better for you offerings including Nut & Yogurt Trail mix and Gluten Free Sweet and Salty mixes.
For a complete listing of our "rising stars" in the snack food market please contact us at www.sheafoodconsultants.com
About the author : Rick Shea is President and owner of Shea Food Consultants based in Chanhassen Minnesota. His background includes 20+ years as VP of Marketing for top food companies : Kraft, Unilever, Entenmanns/Thomas, Malt-O-Meal cereals. He has led top new product introductions including DiGiorno pizza, Thomas fresh bagels, Entenmanns Little Bites and Boboli bread shells. He partners with his dad Richard Shea Sr. who is former CEO of Pepperidge Farm and President of Campbell Soup International. Richard Shea Sr. was widely credited for making GoldFish crackers an iconic snack brand. ( www.sheafoodconsultants)