Cottage cheese ice cream. Probiotic cookies. More on-the-go veggie chips. Just what is going on in the snack category these days?
As the Advantage Solutions Outlook quarterly survey of CPG manufacturers and retailers notes, the vast majority of CPG innovation happening today is focused on the health and wellness space — and nowhere is this more evident than in the multibillion-dollar snack category.
“Natural and better-for-you snacks, ranging from salty snacks and bars to dairy and beverages, appeal to consumers’ growing health and well-being needs — whether supporting mental well-being, weight control, immunity, gut health or other concerns,” says Jill Blanchard, president, enterprise client solutions at Advantage Solutions. “What we are seeing in 2023 is what I call the ‘great wellness reset,’ where, for instance, natural brands and healthier options are driving snack growth — even outpacing growth for conventional snack products.”
Take cottage cheese, for example. The longtime mainstay for dieters and older consumers has emerged as a nutritional meal or snacking alternative, showing up in single-serve fruit cups, dips, spreads and other surprising food items such as ice cream, cookies and more. Younger consumers, drawn by a viral barrage of cottage cheese videos and recipes have given new life to the dairy staple — with more than 700 million views on Tik Tok alone. That translates into more sales.
And it’s not just cottage cheese. “If you look at what’s happening broadly, social media is really disrupting the category,” Blanchard explains. “Gen Z, in particular, spends a lot of time watching videos on Tik Tok, YouTube Shorts, Instagram Reels, and what happens in those videos directly impacts retail sales. In many cases that impact on sales lasts well beyond the initial spark of interest — or a video going viral.”
Younger generations are actually leading the better-for-you snack trend, signaling that retailers and manufacturers can expect to see growth in this category in the years ahead. More than just cleaner ingredients and enhanced health and wellness benefits, other trends such as single-serve packaging and an increase in online sales for natural and healthier snacks also indicate growth in this segment with younger consumers, who can easily search different health benefits to find suitable snacks.
Over the years retailers have leaned into the low-fat chapter, the low-sugar chapter, the low-carb chapter, the organic chapter, the gluten-free chapter and more. All were consumer driven.
“Each chapter gets a little more complex and comprehensive with new wellness needs added versus replacing the old ones. More than a third of consumers today buy snacks to support a specific diet they’re following, whether that’s gluten-free, Keto, Paleo or whatever. Today’s consumers in all demographics want all-natural, high protein, low sugar and low carb — all in the same product,” Blanchard says.
“We’re seeing specialty cookies that offer adaptogenic and gut health benefits as a great example. These are benefits and claims we haven’t seen used in some of these categories before,” she explains. “We expect a lot of the excitement and novelty in snacking to be driven by unique better-for-you innovation in the next few years.”
Recent data from SPINS, a wellness-focused data technology company, shows natural, better-for you snacks on pace to reach $4.2 billion in sales by 2025, while 19% of consumers expect to increase natural salty snack purchases in the next year.
Snack manufacturers, particularly new and emerging brands, are paying attention to this growing trend, and using better-for-you and natural as a platform to differentiate — and even garner a premium price for — their innovations.
“We expect the better-for-you snack trend to continue to evolve and expand with new claims addressing physical and mental needs,” Blanchard says. “In the past, the big claim you’d see on packaged foods, including snacks, was low-fat. Today, there are hundreds or even more health and wellness claims on product packages. CPG companies have said this is where they’re placing their innovation bets. A lot of the excitement and novelty in snacking will be driven by unique better-for-you innovation in the next few years.”
So, while it may be too soon to expect veggie chips and cottage cheese dip at your next Super Bowl party, don’t count it out quite yet.