Savory Snacks Market Analysis

Savory Snacks Market Deep Dive – PESTLE, Porter, SWOT

Savory snacks have become a rapidly evolving and changing part of the food industry. As our lives become ever more hurried, the demand for savory snacks that are easy to carry, tasty and satisfying keeps growing. From the traditional potato chip and pretzel to healthier alternatives such as baked snacks and plant-based products, the snack market is undergoing a major transformation based on the trend towards health consciousness and the growing interest in unique flavor profiles. The rise of e-commerce and social media has also changed the way consumers find and purchase snacks, opening up new opportunities for snack brands to engage with consumers. In the future, as manufacturers continue to strive to meet the changing tastes and dietary needs of consumers, the snack market is set to continue growing and diversifying, reflecting the changing preferences and habits of consumers.

PESTLE Analysis

• Political:
  The savory snacks market in 2024 is influenced by many political factors, such as the trade policies and regulations. For example, the U.S. government has imposed a tariff on some imported snack foods, which has increased the cost of these products by up to 15%. Also, the European Union has introduced strict labeling requirements for food products, requiring that all ingredients be clearly listed on the package. This will affect the cost of production and the strategy of complying with these requirements.
• Economic:
  The economy of the savory snacks market in 2024 is characterized by a high rate of inflation. In the United States it has reached 4.2%. The price of raw materials such as potatoes and corn rose by about 10% over the previous year. But the expenditure on snacks by consumers remains constant, and each household spends on average $300 per year. This is due to a change in lifestyle that has favored convenience foods.
• Social:
  In 2024, the tendency in society is to favor healthier snack food. The market is flooded with low-fat, high-protein snacks, with the result that the demand for such products is growing at an astonishing rate. A further development is the trend towards plant-based diets. By 2024, one in four new savory snack launches will be plant-based, catering for the growing number of consumers who identify as vegetarian or flexitarian.
• Technological:
  TECHNOLOGY IS PLAYING A KEY ROLE IN THE MARKET FOR SNACKS, especially in production and distribution. Companies are putting a great deal of money into automation. In 2024, about thirty percent of the production lines are already using robots to increase productivity and reduce labor costs. Artificial intelligence is also being used to optimize the supply chain. It has reduced stock-outs by twenty percent, and has sped up deliveries and reduced waste.
• Legal:
  Legal factors affecting the savory snacks market in 2024 include new regulations for food safety and the Food Safety Modernization Act (FSMA). This law requires 95% of food plants to use preventive controls to ensure food safety, which will lead to increased compliance costs for manufacturers. There are also ongoing discussions about the regulation of food advertising to children, which could affect the marketing strategies of savory snack brands that target younger consumers.
• Environmental:
  In 2024, the savory snacks market will be increasingly influenced by the environment and will be focused on the concept of sustainable development. Around 40 per cent of consumers will pay a premium for snacks that are packaged in environmentally friendly materials. In response, many companies have adopted a green concept, and 50 per cent of the major brands have pledged to reduce their carbon footprint by 25 per cent by 2025. The industry is also under pressure to source ingredients more sustainably. By 2025, 30 per cent of savory snack manufacturers will favour suppliers that practice sustainable farming.

Porters Five Forces

• Threat of New Entrants:
  The threat of new entrants is moderate. The savory snacks market in 2024 faces a medium-level threat of new entrants. The market is attractive and growing, but the established players have built up a significant brand loyalty and distribution network that makes it difficult for new players to enter the market. The substantial investments required for production and marketing can also be a deterrent to new entrants.
• Bargaining Power of Suppliers:
  The suppliers in the snack market generally have low bargaining power. The market is characterized by a wide variety of raw materials, such as cereals, spices and flavors, which are readily available from many different suppliers. The manufacturer can easily change suppliers, which limits the influence of the supplier on price and terms.
• Bargaining Power of Buyers:
  The buyers of savoury snacks have high bargaining power due to the wide range of choice available to them. With the large number of products, brands and varieties competing for their attention, the buyer can easily switch from one to another, based on price, quality and taste preferences. The competition in the market forces the manufacturer to come up with new and better products, and to reduce prices to retain the customer.
• Threat of Substitutes:
  The threat of substitutes is high in the savory snack market because consumers have a wide range of alternative snacking options, including healthier choices such as fruit, nuts, and yogurt. The growing trend towards healthier eating has increased the availability of snacks that can easily replace traditional savory snacks, which increases the threat of substitutes.
• Competitive Rivalry:
  Competition in the savory snacks market is very strong, and there are many established brands and new entrants. The companies are constantly developing new products and new flavors to attract consumers, so there is a lot of competition in terms of marketing strategies and prices. The fierce competition has eroded profit margins, and continuous investment in brand differentiation is necessary.

SWOT Analysis

• Strengths:
  • Diverse product offerings catering to various consumer preferences.
  • Strong brand loyalty among established players in the market.
  • Growing demand for convenient and on-the-go snack options.
• Weaknesses:
  • High competition leading to price wars and reduced profit margins.
  • Health concerns related to high sodium and fat content in many savory snacks.
  • Limited shelf life for certain products affecting inventory management.
• Opportunities:
  • Increasing trend towards healthier snack alternatives and organic options.
  • Expansion into emerging markets with rising disposable incomes.
  • Innovative flavors and product formats to attract younger consumers.
• Threats:
  • Economic downturns affecting consumer spending on non-essential items.
  • Regulatory changes regarding food labeling and health claims.
  • Intense competition from both established brands and new entrants.

The Savory Snacks Market in 2024 is characterized by a high product variety and brand loyalty, but faces the challenge of high competition and health-related consumer concerns. Opportunities include a growing demand for healthier products and expansion into new markets. Threats include economic fluctuations and increasing regulatory scrutiny. In order to seize opportunities and maintain market share, companies must build on their strengths and address their weaknesses.