When it comes to replacing meals with snacks, younger consumers are most likely to engage in this behaviour: More of younger millennials say that this is common practice for them, the most of any age group
Mumbai: Until about a decade or two, snacks were considered a break-time light food. In recent times, however, people have been increasingly eating snacks between the meals. Indians, in increasing numbers, are becoming snack eaters between the meals as they love to snack everywhere – from theatre to workplace, to car, and everywhere else.
According to Mintel research, snacking today is pretty much an established trend for Indian consumers. Its study showed that about 75% of adults aged 18-64 years snacked at least once a day. Among younger adults – those in the 18-34 age group – 77% said they snacked once a day. This dropped slightly to 73% for adults aged 3564 years.
When it comes to replacing meals with snacks, younger consumers are most likely to engage in this behaviour: More of younger millennials say that this is common practice for them, the most of any age group. Lunch was the most common meal to be replaced by a snack, with breakfast being the second most common meal to be replaced.
Today, several health experts recommend smaller, frequent meals over three square meals a day, thereby changing the concept of ‘snacking’ for good. The term ‘snackification’ has been increasingly gaining impetus and has truly caught on in the pop-culture references of today’s millennials and Gen Zers. No more are large and heavy meals (three times a day) the norm; in recent years, the consumption of healthy snacks at regular intervals has blurred the lines of what defines a ‘hearty meal’, or what constitutes a ‘complex meal’.
As the line between snacks and meals becomes increasingly blurred, consumers have higher expectations about what snacks should deliver than ever before. Consumers expect snacks to do more for them – in terms of the physical, nutritional, emotional, social and cultural experiences they offer.
Mintel Global Consumer research shows that 39% of Indians look for new foods/flavours to try most of the time. For a majority of Indians, snacks provide a sense of emotional wellbeing – a feeling of comfort and pleasure. As consumers crave for novel sensorial experiences and as they explore diverse regional and globally inspired flavours in foods, snacks are performing like an innovation machine with flavour innovation becoming critical to the category, leading to the rise in snacking occasions.
Market size and growth rate
According to an Assocham report, India’s savory snacks market has grown bigger over the past 8 years, and it largely remains dominated by western snacks – chips, extruders (corn-based snacks, puffs, rings, etc.) and bridges (like nachos and kurkure).
The value of India’s savoury snacks industry grew from INR 500 billion (INR 50,000 crore) in the financial year 2015 to around INR 751 billion (INR 75,100 crore) by FY2022, says the report.
“The organized traditional snacks market has grown in maturity in recent years, and is likely to pick up even further as new products are getting added to the product range, which not only appeal to the Indian taste palate but also showcase many of the superior product (technical) aspects including good quality & nutrition,” the report said.
The organized traditional snacks market is dominated by traditional Indian salty snacks – namkeens, bhujias, dry samosas, kachoris and chakli, etc.- which is the largest selling snack product in terms of retail value sales with a contribution of 55%-58% of total value sales within snacks in India. It is also the largest in terms of volume share.
Niche Western snack like tortillas is gaining prominence in the Indian sub-continent so are traditional Indian snacks like namkeens, bhujia, daal, bhakarwadi, khakhra, chakli, kodublae, which are mostly region-specific.
According to Prem Singh, FMCG Foods Head, Jio bp Convenience Stores, “The snacks category in our convenience format stores is primarily dominated by potato chips. Popular snacks can be broadly divided into Indian & Western snacks. In the convenience format stores like ours, Western snacks are more preferred by the consumers. Potato chips, extruded snacks & nachos are the top-selling snacks at our stores. Other top-selling snack brands are Lays, Kurkure, Bingo, Crax & Makino.”
“Potato-based chips are fastest-selling snacks at our stores and are recording maximum growth. Baked and imported snacks are also popular with customers,” says Srinivasan Ramakrishnan, Category Head – FMCG Foods, Wines & Spirits and Tobacco, Reliance Retail.
Singh says that although the growth across all snack segments is almost the same, extruded snacks is getting higher traction amongst the customers. “The snacks Category is growing at a higher rate than categories like Cold Drinks, Biscuits & Chocolates, may be due to more indulgence and more impulse buying in this category.”
When comparing the growth rate of the snacks category to other food categories, Ramakrishnan says that the snacks segment is growing @ 10%, which is slightly more than other food categories.
Consumer Trends
Indian consumers are looking for snacks that are fresh, crisp and flavourful, and have a great taste. Freshness is also one of the top criteria in choosing a snacking product. According to a Mintel study, while nearly three-quarters of consumers wish there were healthier snack options, more than three in five agree that taste is more important than how healthy the snack is for them. “So, to keep the balance between Health & Indulgence is the mantra for success in snacking segment,” says Avinash Tripathi, Concept Head – Freshpik & Fresh Signature, Reliance Retail.
While the jury is still out on the health-versus indulgence debate, modern Indian consumers seem happy to be snacking their way through the day. In fact, the preference for on-the-go, dry snacks have gone several notches up in the past decade. Foreign brands entering India post liberalization, have acted as the chief propeller for this trend.
Industry pundits and analysts aver that more and more consumers today feel that snacks should be healthful and be made from whole real foods, starting with fruit and veggies, and should offer “good” fats and proteins, should have no artificial flavours, colours or preservatives and should offer healthy choices, where possible.
Thanks to the changing tastes of the millennials and the emerging health trends, the consumer is willing to experiment and has become receptive to fresher, newer ideas. A number of factors like mass media, social media and frequent international vacations, have become the catalysts for fostering these changes.
“Customers are now really looking forward to new brands & product categories in snacks as generally all the categories/sub-categories within snacks are dominated by 2-3 major players only,” says Prem Singh of Jio-bp Convenience Stores.
Solutions to rack up snacks’ sales
With consumers looking for healthier ingredients in their snacks and better-for-you attributes like all-natural, gluten-free, non-GMO, many new brands are entering this growing category. “Snacking is one of the top three fastest growing FMCG categories and it is likely to accelerate due to the transition to the organized segment of the industry. There is a high level of innovation and marketing activity happening to cater to the impulse demand from consumers. We see retailers adopting innovative methods of creating extra shelf space to expand the snacking portfolio, and to align with its momentum,” says Shaswat Goenka, Sector Head – Retail & FMCG, RP-Sanjiv Goenka Group that operates Spencer’s Retail.
Dinika Bhatia, Founder & CEO, DRB Foods, which operates the Nutty Gritties brand, feels that retailers need to allocate more shelf space in their stores and give more weight to the healthy snacks category. She believes that the market should be open to working differently with new-age brands, and give priority to brands and products that have the ability to innovate while providing great quality, because it helps in retaining customers.
“Brands that have a desire to push their products might not be able to afford the listing fees, visibility, and margins, in comparison to the established companies. Entrepreneurs, who have the ability to innovate in their products, also have the ability to innovate in the marketplace and retail space as well. Category managers must provide support to them and with some joint efforts one can surely see results in the category growth,” says Bhatia.
To ramp up the growth momentum in the category even further, retailers should actively collaborate with snack food suppliers by sharing current sales trends and data. This will ensure that suppliers have the most current data for making base retail and promotional retail decisions. This collaborative approach will also allow suppliers to react quickly to leverage best-in-category retails and tactics to drive additional sales.
Retailers should place healthy snack packs near the cash tills, which can help in the higher uptake of grab-n-go nut packs, for instance. Retailers who want to grow sustainable sales and increase customer traffic need to capitalize on the important trends. The ones who make snacking easy through effective merchandising, pricing, and promotion strategies that focus on shoppers wants and needs will help drive sales throughout the store.
Adopting effective retail strategies will enable brands to penetrate newer markets and make their presence felt in the market. From exploring the online channel to having dedicated teams working on the expansion of retail, brands should leave no stone unturned to become strong contenders in the market.
Better category management will not only help the retailers but also the consumers who are looking for better-for-you snacks. Here are a few suggestions offered by snack brands for better category management.
- Provide retail link to the brands for better understanding of buying trends
- Separation of healthy snacks from the regular snacks category
- Healthy snacks category can be further subdivided into products according to zero cholesterol, gluten-free, non-GMO, diabetic friendly, etc.
- Planogram to display new and emerging categories in a more prominent way without frequent changes
- Adapting to region-wise product category management on the part of retailers to grow at a faster pace
- Good visibility and promotion, and ad campaign promotion by retailers at positive points of sale
- Attractive combos with discounts and schemes to persuade buyers
This article is an excerpt from June Edition of Progressive Grocer magazine. To read the full article, subscribe to the magazine.
