It is a bold new world for snack foods — in particular popcorn — as the global market is forecasted to achieve sales of $12 billion by 2020, and where flavor innovations contribute to the growth of the snack food, according to a recent report by Technavio.
With a Mintel Group study reporting that half of adults snack two to three times a day, and 70% believing any food can be a snack, food manufacturers are responding. They are coming out with exotic ready-to-eat popcorn flavors such as sriracha, hot cinnamon, and Thai coconut curry.
Food manufacturers from other sectors can learn lessons about innovative flavors and surging sales from popcorn manufacturers. Popcorn, which has been considered junk food, is now healthy and millennial friendly, Nicholas Fereday, executive director and senior analyst at Rabobank, told Food Business News. In the ready-to-eat popcorn category, small firms have largely driven innovations in the sector, responding to trends such as natural, organic, and exotic flavors.
Startups have created niche varieties with exotic flavors, while at the same time tapping into healthy foods and the rise of snacking. FoodThink’s "Snacker Nation" noted snack sales in the United States were expected to increase from $34.2 billion in 2005 to $47.5 billion in 2015.
When comparing microwave popcorn to ready-to-eat popcorn, microwave popcorn earned 55% of market share in 2015, Technavio's analyst found. However, microwave popcorn is expected to lose market shares to ready-to-eat popcorn, driven by changing customer buying preferences.
Millennials snack in their own unique way
Snack food manufacturers have learned that millennials and boomers snack differently, with millennials committed to heavier levels of snacking in the future, according to "Snacker Nation." They want to be surprised with bold flavors and unexpected flavor combinations. They also want to be the first to try new snack flavors, and share the flavors with their friends.
"If you think about the desire to try new things, snacking is a really easy way to do that because it’s a lot less involvement and commitment to try something new in a snacking category versus trying something new and different that impacts an entire meal," said Christy Niebaum, senior researcher at FoodThink.
By focusing on key motivations for each generation, manufacturers can respond to snacking motivators, such as emotional or practical, according to Mintel’s report on snacking motivations and attitudes.
Millennials are functional snackers, snacking throughout the day in order to stay focused. Although consumers are health-conscious, manufacturers should "recognize the impact of flavor and satisfying a craving on snacking occasions," Mintel reports.
North America is the largest market for popcorn, with more than 61% revenue share, according to Technavio, and sales of popcorn doubling in size in the U.K. between 2010 and 2015, according to Mintel’s report "Crisps, Savory Snacks and Nuts, UK," small and large firms will develop bold and exotic flavors to satisfy consumer cravings.
The future for popcorn looks strong. Technavio’s research analyst determined the global popcorn market will grow steadily at a CAGR of approximately 7% from 2016 to 2020. By appealing to generational snacking needs, popcorn manufacturers will find opportunities.