Extruded Snacks Market Analysis

Extruded Snacks Market (Global, 2023)

Introduction

The extruded snack market has become a dynamic market within the broader snack industry, characterized by its innovative production methods and diverse product offerings. Extrusion, a process in which a mixture of ingredients is forced through a die to create unique shapes and textures, has revolutionized snack-making. It has enabled producers to create products with improved taste, nutritional profiles, and consumer appeal. With consumers increasingly seeking convenient and nutritious snacks, the demand for extruded snacks has increased. This has led manufacturers to explore new ingredients and flavors to satisfy consumers’ evolving preferences. The growing popularity of plant-based diets and the proliferation of snacks throughout the day have also fueled interest in this market, leading to a proliferation of products that not only satisfy consumers’ cravings but also align with their dietary choices. The emphasis on clean-label and sustainable products has also made the extruded snack market a focus of innovation and growth for the food industry.

PESTLE Analysis

Political

In 2023, the extruded snacks market is influenced by many political factors, such as trade policies and regulations. The U.S. Department of Agriculture reported that about 15% of all imported snacks were subject to tariffs, which affected the price and availability of products. In addition, the implementation of the Food Safety Modernization Act (FSMA) has led to a higher degree of supervision of food production processes, and the companies must invest in the food safety system, and the annual cost of small and medium-sized enterprises is up to 100,000 dollars.

Economic

In 2023, the extruded snacks market will be shaped by the inflation rate and the way consumers spend. In early 2023, the US inflation rate will be 4.2%. The impact on consumers' incomes and the way they spend will change. Many consumers will switch to cheaper snacks. The demand for value-for-money snacks is expected to increase by 30% compared to premium snacks. These changes will force manufacturers to adjust their prices to remain competitive in the tightening economy.

Social

Social trends have a great influence on the market for extruded snacks, particularly the growing health consciousness among consumers. In a survey from 2023, 62% of consumers said they were looking for healthier snacks, resulting in a 25% increase in demand for snacks made from whole grain and natural ingredients. Also, the popularity of vegetarianism has caused a considerable increase in the production of extruded snacks, which are suitable for vegetarians and vegans.

Technological

In the extruded snacks market, technological developments play an important role, especially in the areas of production efficiency and product innovation. The estimated value of investments in extrusion technology for the year 2023 will be around $ 50 million. The aim is to improve product quality and reduce waste. Artificial intelligence has reduced the production time by up to 20 percent and has made it possible to respond more quickly to the needs of the market and the preferences of consumers.

Legal

In 2023, the extruded snack market is mainly influenced by the laws and regulations of food labeling and the standards of health. Food and Drug Administration (FDA) has issued a rule that all food products must be clearly labeled with nutritional information. This has caused the cost of labeling to increase, and the cost of labeling per product line is about 75 thousand dollars. Moreover, state regulations are complex, and there are many different regulations from state to state.

Environmental

Extruded snacks are gaining in importance on the market, with more and more emphasis on the environment and sustainable development. In 2023, about 45 per cent of consumers prefer brands that use eco-friendly packaging, which has made companies invest in biodegradable materials. In addition, the industry is under pressure to reduce its carbon footprint. The United Nations has set a target for food manufacturers to reduce greenhouse gas emissions by 30 per cent by 2030, which is putting pressure on operating costs.

Porter's Five Forces

Threat of New Entrants

The extruded food market has moderate entry barriers, including the need for specialized equipment and technology and the need to comply with food safety regulations. The market is attractive because of the growing demand for convenient and healthy snacks, but established brands have a significant market share and brand loyalty, which can be a deterrent to new entrants.

Bargaining Power of Suppliers

The bargaining power of the suppliers of the extruded snack market is relatively low. There are many suppliers of raw materials such as cereals, spices and flavors, which makes it easy for manufacturers to change suppliers. This keeps the power of the suppliers in check and makes it possible for companies to negotiate favorable terms.

Bargaining Power of Buyers

The buyers in the extruded snacks market have a medium level of bargaining power. They can easily switch brands if they find a better quality or a lower price. But brand loyalty and the unique offerings of certain products can limit this power to some extent.

Threat of Substitutes

The threat of substitutes in the extruded snack market is high. There are many alternative snacks to extruded snacks, such as potato chips, popcorn, and healthier snacks such as nuts and dried fruit. These alternatives are increasingly used by consumers who are looking for healthier snacks.

Competitive Rivalry

Competition in the market for extruded snacks is high, with a large number of companies competing for market share. In order to attract consumers, companies are constantly launching new flavors and healthier products. There are also fierce price competitions. This fierce competition has made it difficult for companies to compete.

SWOT Analysis

Strengths

• Diverse product offerings catering to various consumer preferences.
• Growing demand for healthier snack options, including gluten-free and organic varieties.
• Strong distribution networks enhancing market reach and accessibility.
• Innovative production techniques improving product quality and shelf life.

Weaknesses

• High competition leading to price wars and reduced profit margins.
• Dependence on raw material prices, which can be volatile.
• Limited consumer awareness about the nutritional benefits of extruded snacks.
• Potential health concerns related to additives and preservatives.

Opportunities

• Expansion into emerging markets with increasing disposable incomes.
• Rising trend of snacking among health-conscious consumers.
• Potential for product innovation, including new flavors and formats.
• Collaboration with health and wellness brands to enhance product credibility.

Threats

• Intense competition from traditional snacks and healthier alternatives.
• Regulatory changes regarding food safety and labeling requirements.
• Economic downturns affecting consumer spending on non-essential items.
• Shifts in consumer preferences towards fresh and minimally processed foods.

Summary

The extruded snacks market in 2023 is characterized by a strong product diversity and a growing demand for healthier snacks, which offers considerable opportunities for innovation and market growth. However, the market is also faced with strong competition and potential health concerns that could have a negative effect on consumers' perception of the product. Companies should take advantage of the emerging trends and capitalize on them by focusing on product quality, consumer education and strategic cooperation.