Top trends in snack food production and retail revealed

The production of Health Snack Food is set to soar as Australians seek healthier options. With less time to prepare and eat home-made meals as they increasingly navigate busier lifestyles, Australians are eating more snack foods. While overall consumption of snack foods is increasing, the Health Snack Food segment has shown strong growth over the past five years; growing at the faster pace than snacks generally.

With growth increasing at an annualised average of 3%, Health Snack Food is showing strong promise. While traditional Snack Food Manufacturing continues to generate the greatest overall revenue, Health Snack Food has benefited from changing consumer preferences. According to business information analysts at IBISWorld Australia’s Snack Food manufacturing and Health Snack Food production industries are expected to generate combined revenue of over $3.0 billion in 2015-16.

Health snack foods are forecast to make up a greater share of consumer snacking habits. “Snack food options have expanded beyond traditional snacks – such as potato chips and biscuits made with standard white flour – over the past five years as consumers become increasingly health conscious and seek higher quality snack foods”.

“However, there has also been a tangible shift towards premium snack foods, such as gourmet-flavoured chips, alongside those perceived to be healthier options or that respond to specific dietary requirements – such as low fat, low salt, low sugar, organic, gluten-free, dairy-free, vegan and so forth,” said IBISWorld senior industry analyst Ryan Lin, said:

“While potato chips remain the most popular form of snack food, increasing consumer demand for healthier options manufactured by Australia’s Health Snack Food Production Industry – including dried fruits and nuts, which account for 42.8% of industry revenue; muesli bars (29.1%); protein bars (17.4%), and other items such as fruit and vegetable bars (10.7%) – is anticipated to drive growth and deliver both challenges and opportunities for industry players,” said Mr Lin.

IBISWorld highlighted Australia’s biscuit manufacturing, potato chip production, cake and pastry manufacturing and chocolate and confectionery manufacturing industries as key sectors impacted by the trend towards premium and healthier snack food options.

“While timely and clever product innovation will help drive some growth for traditional snack industries, this will be tempered by an increase in availability of healthy substitutes,” said Mr Lin.