Why Snack Brands Are Booming

Share this article

Behind the scenes at Goldman Sachs, thought-provoking insights are bubbling up each day. This space is for a few nuggets we think are worth sharing. From macroeconomics to the genome medicine revolution to the rise of digital gaming, these stories from around 200 West show you how top-level views can impact your life (and maybe even shape the way you think about money).

It’s an age-old question: when it comes to snacks, do you prefer savory or sweet? 

These days, savory snacks have jumped ahead to be the more popular answer, and as Goldman Sachs Research’s Jason English explains in this The Long & Short of It video, they’ve become a driving force behind a booming snack industry and related snacking trends.

And we’re talking about a specific kind of savory: salty snacks, including potato chips, ready-to-eat popcorn and beef jerky to name a few. People can’t seem to get enough of them, so much so that the category of salty snack companies has recently seen growth accelerate to 6 to 7 percent.

Got more of a sweet tooth? Categories of snack brands tied more to sugar – think gum, mints, candy and packaged desserts – are growing less than 1 percent today, compared to 3 to 4 percent just a few years ago, English said.

Aside from savory snacks, here are two additional snack food company sub-trends that have contributed to the robust growth of the industry.

Premium Preferred Snacks

Natural, healthy, organic, plant based, feel good, clean labeling, craft…they’re buzzwords at the heart of many snack brand’s value proposition, aimed at appealing to more health and quality-conscious consumers. And the millennial cohort has really taken a liking to snacks labeled as such, boding well for the trend to continue. 

 “[Millennials’] spending importance is going to rise even further over the next 5 years and 10 years, as they begin to form households of their own, begin to form families of their own and start to push a very big shopping basket down the grocery aisle,” English said.

So to put it plainly? Expect millennials to continue enjoying premium stuff from premium healthy snack brands, powering the healthy snacking trend ahead.

Everyone Wants a Piece of the (Snack) Pie

It’s no surprise that the rapid growth of packaged snacking products has attracted a lot of competitor interest from food manufacturers. Some legacy brands have entered the field organically through product innovation, while other companies have crashed the snack table via acquisition. Think Kellogg’s purchase of Pringles and The Hershey Company’s acquisition of Pirate’s Booty and SkinnyPop Popcorn for examples in the snack category. 

 And there’s still plenty of room for growth: Goldman Sachs Research sees snacking sales growing 5 percent to exceed $600 billion by 2025.

“As we look forward, we absolutely believe that snack food’s [going to] remain growth advantage,” English said. “They’re [going to] remain a rich source of growth for the industry overall, as consumer behavior continues to evolve.” 

This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.  Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.