Better for You Snacks - US - September 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
BFY snacks is a $1.1 billion market; room for growth exists
Figure 1: Sales* of better-for-you snacks, at current prices, rolling 52 weeks, June 2014-June 2016
BFY snacks face competition from range of snack options
Figure 2: Salty snacks purchase, January 2016
Consumers are skeptical of BFY snacks
Figure 3: BFY snack attitudes – Agree, June 2016
The opportunities
Vegetable and fruit chips experience the strongest dollar sales growth
Figure 4: Sales* of BFY snacks, by segment, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Consumers ask for lower price points, more flavor from the category
Figure 5: BFY snack attitudes – Agree, June 2016
Big can still be BFY
Figure 6: BFY snack attitudes – Agree, June 2016
What it means
THE MARKET – WHAT YOU NEED TO KNOW
BFY snacks is a $1.1 billion market; room for growth exists
“Other” snacks dominate BFY market
Nearly all US adults snack daily; snack occasions move into meal times
BFY snack eaters indicate eating more healthy snacks in the past year
BFY snacks face competition from range of snack options
MARKET SIZE
BFY snacks is a $1.1 billion market; room for growth exists
Figure 7: Sales* of better-for-you snacks, at current prices, rolling 52 weeks June 2014-June 2016
MARKET BREAKDOWN
“Other” snacks dominate BFY market
Figure 8: Sales* of BFY snacks, by segment, 52 weeks ending June 12, 2016
Vegetable and fruit chips experience strongest dollar sales growth
Figure 9: Sales* of BFY snacks, by segment, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Multigrain chips comprise largest share of “other” snacks segment
Figure 10: Sales* of other snacks, by type, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
“Other” vegetable chips make up largest sale of veg/fruit chip segment
Figure 11: Sales* of vegetable and fruit chips, by type, 52 weeks ending June 12, 2016
Growth of “other” formats point to adoption of less traditional options
Figure 12: Sales* of vegetable and fruit chips, by type, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Vast majority of category sales are through MULO channels
Figure 13: Sales of better-for-you snacks, by channel, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
MARKET PERSPECTIVE
Category players face competition from a range of snack options
Figure 14: Total US sales of various snack categories, at current prices, 2010-15*
Figure 15: Salty snacks purchase, January 2016
Figure 16: What consumers are snacking on, June 2016
Consumers ask for lower price points, more flavor from the category
Figure 17: BFY snack attitudes – Agree, June 2016
Figure 18: What consumers want from BFY snacks, June 2016
Figure 19: Flavors associated with BFY snacks, June 2016
Consumers snack to satisfy a craving; indulgence plays a role
Figure 20: Reasons for snacking, January 2015
Figure 21: BFY snack attitudes – Agree, June 2016
Figure 22: BFY snack attitudes – Agree, by generation group, June 2016
MARKET FACTORS 
Nearly all US adults snack daily
Figure 23: Daily snacking frequency, January 2015
Half of category participants snack in place of meals
Figure 24: BFY snack behaviors – Snack in place of meals, June 2016
Consumers see the benefit of healthy eating
Figure 25: Important to achieve good health – Any top three rank, May 2015
…but close to a third of consumers don’t have time for healthy meals
Figure 26: Attitudes toward health -- Agree
BFY snack eaters indicate eating more healthy snacks in the past year
Figure 27: BFY snack behaviors – Change in purchase/consumption, June 2016
…but the majority still want more
Figure 28: BFY snack attitudes – Agree, June 2016
Consumers’ view of healthy snacks expands
Figure 29: BFY snack attitudes – Agree, June 2016
Figure 30: What defines a healthy snack – Then, June 2016
Figure 31: What defines a healthy snack – Now, June 2016
Four in 10 BFY snackers follow special diets
Figure 32: BFY snack behaviors – Special diet, June 2016
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Big can still be BFY
BFY-ness may come more from ingredients than from positioning
Sales of non-GMO and natural offerings are on the rise
Flavor can be an area of focus in the category
WHAT’S WORKING?
Big can still be BFY
Figure 33: BFY snack attitudes -- Agree, June 2016
A third of BFY snacks are gluten-free
Figure 34: Sales* of better-for-you snacks, by segment and gluten-free labeling, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Consumers think Quaker, Kashi, and Trader Joe’s are getting it right
Figure 35: Who’s getting it right, June 2016
Non-GMO claims rise
Figure 36: Sales* of better-for-you snacks, by segment and GMO ingredients, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Half of BFY snacks are labeled natural
Figure 37: Sales* of better-for-you snacks, by "natural" labeling or perception, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
WHAT’S STRUGGLING?
The majority of BFY snacks are not organic
Figure 38: Sales* of better-for-you snacks, by segment and organic ingredients, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Whole grain losing share; may signify a move away from grain-based snacks
Figure 39: Sales* of better-for-you snacks, by segment and Whole-Grain-Council certification, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Less than a quarter of BFY snacks are low/no/reduced fat
Figure 40: Sales* of better-for-you snacks, by segment and fat content, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
WHAT’S NEXT?
The young category can play host to snack innovation
BFY snacks have room for both healthy and indulgent flavors
Figure 41: BFY snack launches, by leading flavors, July 2011-June 2016
What’s inside sets this category apart from other snacks
Portability will be key for maintaining relevance
THE CONSUMER – WHAT YOU NEED TO KNOW 
Half of consumers purchase BFY snacks
Flavor leads purchase drivers, but consumers care about ingredients
Small formats can meet the needs of portion control and portability
Category participants are paying attention to labels
Consumers are skeptical of BFY snacks
BETTER-FOR-YOU SNACK PURCHASE 
Half of US adults purchase BFY snacks
Figure 42: BFY snack purchase – Net*, June 2016
Veggie-based snacks lead
Figure 43: BFY snack purchase, June 2016
Men are more likely to purchase BFY snacks
Figure 44: BFY snack purchase – Net*, by gender, June 2016
Figure 45: BFY snack purchase, by gender, June 2016
Seven in 10 Millennials purchase BFY snacks
Figure 46: BFY snack purchase – Net*, by generation, June 2016
Hispanics are strong targets for BFY snack purchase
Figure 47: BFY snack purchase – Net*, by Hispanic origin, June 2016
BFY snack purchase generally correspondents with HH income
Figure 48: BFY snack purchase – Net*, by HH income, June 2016
Parents are twice as likely as non-parents to purchase BFY snacks
Figure 49: BFY snack purchase – Net*, by parental status, June 2016
PURCHASE DRIVERS
Flavor leads purchase drivers, but consumers care about ingredients
Figure 50: Purchase drivers, June 2016
Brand plays a less important role in BFY snacks than for snacks overall
Figure 51: Important features when eating a snack, January 2015
Half of BFY snack buyers look for the lowest price
Figure 52: BFY snack behaviors – low price, June 2016
A focus on flavor can attract less likely users, such as women
Figure 53: Purchase drivers, by gender, June 2016
…and older shoppers
Figure 54: Purchase drivers, by generation, June 2016
Portion size, including snack formats appeal to Hispanics
Figure 55: Purchase drivers, by Hispanic origin, June 2016
A third of parents rely on brand
Figure 56: Purchase drivers, by parental status, June 2016
PURCHASE LOCATION
Supermarkets lead purchase locations
Figure 57: BFY snack attitudes – Agree, June 2016
Figure 58: Purchase location, June 2016
The majority of BFY snackers buy the products on impulse
Figure 59: BFY snack behaviors – Impulse, June 2016
PRODUCT CLAIMS
BFY snacks have various avenues for appeal
Figure 60: Product claims, June 2016
Organic is especially important to alternative-based chips buyers
Figure 61: Product claims, by BFY snack type purchased 2016
Protein, vitamins appeal to men; women avoid artificial ingredients
Figure 62: Product claims, by gender, June 2016
Added nutrients can appeal to Hispanics
Figure 63: Product claims, by Hispanic origin, June 2016
BFY SNACK BEHAVIORS
The majority of BFY snackers eat the products on-the-go
Figure 64: BFY snack behaviors – On-the-go, June 2016
Category participants are paying attention to labels
Figure 65: BFY snack behaviors – Label awareness, June 2016
Some segments may struggle with ingredient recognizability
Figure 66: BFY snack behaviors – Label awareness, by BFY snack type purchased, June 2016
Variety packs may find appeal among majority of consumers
Figure 67: BFY snack behaviors – Multiple snacks, June 2016
ATTITUDES TOWARD BETTER-FOR-YOU SNACKS
Consumers are skeptical of BFY snacks
Figure 68: BFY snack attitudes – Agree, June 2016
Natural, low calorie, non-GMO, and organic imply BFY
Figure 69: Claims associated with BFY snacks, June 2016
Fresh still leads as BFY
Figure 70: Perception of BFY snacks, June 2016
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms
APPENDIX – MARKET 
Figure 71: Sales* of better-for-you snacks, at current prices, rolling 52 weeks June 2014-June 2016
Figure 72: Sales* of better-for-you snacks, by segment, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 73: Sales* of other snacks, by type, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 74: Sales* of vegetable and fruit chips, by type, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 75: Sales of better-for-you snacks, by channel, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
APPENDIX – KEY PLAYERS 
Figure 76: Sales* of better-for-you snacks, by gluten-free labeling, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 77: Sales* of better-for-you snacks, by segment and gluten-free labeling, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 78: Other snacks launches, by top 10 leading flavors, July 2011-June 2016
Figure 79: Vegetable and fruit chips launches, by top 10 leading flavors, July 2011-June 2016
Figure 80: Puffed snacks launches, by top 10 leading flavors, July 2011-June 2016
Figure 81: Soy crisps and snacks launches, by top 10 leading flavors, July 2011-June 2016
Figure 82: Sales* of better-for-you snacks, by GMO ingredients, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 83: Sales* of better-for-you snacks, by segment and GMO ingredients, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 84: Sales* of better-for-you snacks, by "natural" labeling or perception, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 85: Sales* of better-for-you snacks, by segment and "natural" labeling or perception, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 86: Sales* of better-for-you snacks, by organic ingredients, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 87: Sales* of better-for-you snacks, by segment and organic ingredients, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 88: Sales* of better-for-you snacks, by Whole Grain Council certification, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 89: Sales* of better-for-you snacks, by segment and Whole-Grain-Council certification, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 90: Sales* of better-for-you snacks, by fat content, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
Figure 91: Sales* of better-for-you snacks, by segment and fat content, at current prices, rolling 52 weeks ending June 15, 2014 and June 12, 2016
APPENDIX – CONSUMER 
Figure 92: Attitudes toward health – Agree