Americans are eating more snacks than ever before, and food and beverage companies are capitalizing on the trend.
Almost half of Americans are snacking three or more times a day, which is an 8% increase over the past two years, reports the Wall Street Journal, while U.S. snacks sales increased to $181 billion in 2022, up 11% year over year.
“Snacking is where the consumer is going,” Dan O’Leary, chief growth officer at Hostess, told the Journal. Hostess has expanded its lineup of sweet snacks since the maker of Twinkies was bought out of liquidation a decade ago.
Snack companies are banking on consumers’ increased noshing. Between fiscal 2019 and 2022, Hershey’s sales grew 30% while Mondelez’s rose 22%, outpacing other major food companies.
Hershey told the Journal that snacking has always been part of American culture, but the pandemic increased snacking habits. It spurred demand for foods such as popcorn and candy, which people have continued eating during family movie nights or other group activities, Hershey told the Journal.
The company has been buying up snack brands in order to capitalize on America’s desire to snack, including SkinnyPop and Pirate’s Booty. Hershey also recently acquired two popcorn manufacturing plants for SkinnyPop, and it plans to build another facility to produce chocolate ingredients.
Mondelez CEO Dirk Van de Put told the Journal that snacking has generally become more acceptable. “Indulgence will be big no matter what,” he said.
Millennials and Gen Zers tend to snack more than older generations, eating about 10% more snacks a day partially because of their busy lifestyles, Nick Graham, global head of insights, Mondelez, told the Journal.
“Millennials took something that had a negative connotation with older generations—parents would tell you ‘don’t snack and spoil the meal’—and turned snacks into the entire meal itself,” Andrea Hernández, author of Snaxshot, an online newsletter focused on food and beverage trends, told the Journal.
More Americans are playing video games as well, which has boosted snack consumption, Sally Lyons Wyatt, an executive at Circana Group, told the Journal.
Because of rising food prices, many consumers have switched to private-label products, but snack brands have been shielded from this switch, as consumers tend to stick with their preferred brand when it comes to snacks, even if it costs more.
The Journal reports that both Hershey and Mondelez raised their sales and profit growth forecasts last month for the year after double-digit sales increases in the companies’ latest quarters. Both company’s shares are up—Hershey +21% and Mondelez +18%—and each one is higher than the S&P food and beverage index’s increase of roughly 4%.
Other companies are getting into the snack business. Campbell Soup’s snack division made up 46% of its sales in 2022, and the sector is growing faster than its meal and beverages division. In February, the company announced an air-fried version of its Kettle Brand potato chips with less fat than the original products. The company is also marketing its snacks more to adults instead of children as it has done in the past.
Kellogg is doubling down on snacking, deciding to split its North America cereal business. The division will create Kellanova, a new global snacking business made up of brands including Cheez-It, Pringles, Pop-Tarts and Rice Krispies Treats, which currently make up about 70% of Kellogg’s North American snack sales. It’s even trying to market its cereals, such as Froot Loops and Apple Jacks, as snacks.
“You’ve started to see the ‘snack-ification’ of everything,” Hernández told the Journal.