The evolution and future of snacking

PepsiCo is focusing more on catering to consumers looking for value and boosting its better-for-you options as it aims to stoke growth in its snacks business.

Ramon Laguarta, PepsiCo’s CEO, told analysts that “value is the number one decision maker” and the reason why the snacking category slowed down in 2024. He said the food and beverage manufacturer will offer additional multi-count packages in smaller counts with lower price points that consumers can purchase depending on their budgets. 

PepsiCo highlighted efforts to increase sales of healthier snacks like Simply, which has no artificial colors or flavors, as well as high protein items such as Quaker. The recent acquisitions of Siete and Sabra also increase its presence in better-for-you foods while building its exposure in meals.

A decline in volumes among Pepsico’s Frito-Lay and Quaker foods businesses come as consumers snack less and cut back on their spending. But executives remain upbeat that conditions are improving.

The maker of Cheetos, Doritos and Sun Chips started seeing volume growth in snacks during the last three months of the year along with a slight price improvement, Laguarta told analysts.

“We're very confident that our North America business will accelerate this year,” he said. “We're very confident in our plans and our long-term. And we see opportunities, especially away from home.”

Laguarta downplayed the need to lower prices across its portfolio to attract consumers. Instead, PepsiCo plans to use a “surgical price pack strategy and execution strategy” to drive growth in snacks. 

The food and beverage giant’s revenue during the fourth quarter of 2024 was $27.8 billion, down slightly from $27.9 billion a year earlier. Revenue climbed roughly $400 million to $91.9 billion during PepsiCo’s 2024 fiscal year, with net income rising to $9.6 billion from $9.1 billion in the prior year.

PepsiCo forecasted a low-single-digit increase in organic revenue across its food and beverage business for the 2025 fiscal year.

A study released in January found GLP-1 drug use cuts grocery spending by 6%. Purchases of calorie-dense, processed items such as chips, baked goods and cookies were the most affected.

While the New York-based company hasn’t seen a “direct impact” from GLP-1 medications, Laguarta said a higher level of awareness in health and wellness is driving consumer shifts in snacking and other categories. 

PepsiCo, he noted, can benefit through its portion-controlled offerings, higher protein items and innovation in better-for-you snacks, such as Sun Chips with legumes or Stacy’s pita chips with whole grains. It’s also trying to participate in protein beverages “with a sense of urgency.”

Food and beverage companies have seen product volumes drop as inflation-weary consumers cut back on spending. This has weighed on companies like PepsiCo, forcing them to find ways to juice sales and improve margins. Laguarta said his company plans to devote more attention to growing some of its lower-cost brands such as Chester’s.

Brittany Quatrochi, an analyst with Edward Jones, said PepsiCo is focused on spending more on marketing, innovation and promotions to drive growth in its brands. She also noted that it has strong market shares in snacks and beverages, giving it an advantage in dealing with suppliers and grocers.

“Longer-term, Pepsi is investing into its supply chain, consumer data analytics, and digital marketing with a focus on improving productivity and driving improved sales growth,” Quatrochi said in a research note. “These investments should drive solid earnings growth over time.”

PepsiCo’s earnings came out the same day the Senate Finance Committee voted to forward the nomination of Robert F. Kennedy Jr. to the full Senate. Kennedy, who would oversee the FDA as secretary of Health and Human Services, has targeted ultra-processed foods for instigating the obesity epidemic and said they should be removed from school lunches. 

In October 2023, the company formerly known as Kellogg’s embarked on a new future under a new name, spinning off its household name cereal brands and forging ahead as a snacking-only business.

Kellanova is now staring down a new future: joining candy brands, such as Snickers and Twix under the leadership of Mars, which plans to purchase the Pringles producer for $35.9 billion.

In an interview with Food Dive, Kellanova CEO Steve Cahillane said in early 2024, Mars CEO Poul Weihrauch called him and presented the idea of purchasing the Cheez-It maker over lunch.

“That led to a series of meetings over the coming months, continuing to talk about it until we came to the right outcome,” Cahillane said. “It was compelling industrial logic of the complementarity of their business and ours from a brand and categories perspective, as well as a geographic perspective.”

Kellanova believes the purchase will help expand its product portfolio into the front of grocery stores and gas stations, which Mars has on lock with its candy and gum presence. Ditto for growing its presence in new regions.

Mars has a much larger business in China, Cahillane said, which Kellanova believes will benefit its brands that have less of a presence in the country, particularly Pringles, because of the candy giant’s route-to-market expertise. On the flip side, Kellanova has a larger presence in Africa whereas Mars does not.

“You think about all the Snickers and M&M’s that we can put through our system to help those brands and you see the logic again,” Cahillane said. “The combination is very compelling.”

This vision of combining the two businesses also factors in the snacking giant’s active innovation pipeline that has led to a number of product launches in recent years from Cheez-It Puff’d and Pringles-flavored Morningstar Farms plant-based Chick’n Fries.

Under an integrated Mars and Kellanova, the combined company would have an expansive array of candy, snacks and even plant-based meat products to experiment with blending the flavors and formats.

“Very quickly people at our company started to talk about M&M’s Pop-Tarts,” Cahillane said, “and all sorts of innovations that can come by fusing the brands together.”

Cahillane — who joined Kellogg as CEO in 2017 after decades in executive roles at companies such as Coca-Cola, Anheuser-Busch InBev and Nature’s Bounty — said his intention is to hand off the snacking giant to Mars by helping Kellanova maintain its momentum before he steps down and decides what to do next.

 

Confidence amid harsh antitrust climate

Kellanova does not foresee difficulty in the transaction with Mars withstanding regulatory approval, even with the Biden-Harris administration’s aggressive antitrust pursuits.

Cahillane reiterated that the only area where the two businesses overlap is in the snack bar category. Kellanova produces RXBar and Special K while Mars owns Kind bars.

“I don’t expect that it should be problematic,” the Kellanova CEO said, “but we’ll work very collaboratively with the regulators to explain exactly the way we see the situation.”

The Mars-Kellanova transaction is not without its critics. Amanda Starbuck, a research director at Food & Water Watch, predicts the merger could lead to higher prices for consumers amid a period of high food inflation.

“While processed food giants stand to ramp up profits from snack market domination, the American consumer will lose out with higher costs and fewer healthy options,” Starbuck said in a statement. “The Biden-Harris administration has committed to reining in the food monopolies. The Federal Trade Commission must intervene to block this destructive corporate coupling.”

Some experts speculate that the Mars-Kellanova merger could open the door to more consolidation in the food and beverage industry.

In a note to investors, TD Cowen analyst Robert Moskow said Kellanova’s portfolio could benefit from the leadership of Mars, specifically internationally.

Moskow recalled the last time a slew of major food industry acquisitions happened in the late 90s and early 2000s, such as General Mills buying Pillsbury; Kraft acquiring Nabisco and Kellogg purchasing Keebler.

But M&A deals of that kind of magnitude also have drawbacks, Moskow said. “Many of the remaining large cap food companies today have trusts or family members with significant controlling shares, which pose obstacles for acquirers.”

When Gerald Shreiber acquired a struggling soft pretzel company out of bankruptcy for $72,000 in 1971, a foundation was laid for one of the most successful, yet largely unknown, businesses in snacking.

J&J Snack Foods has since evolved into a juggernaut across the food space with a portfolio of well-known brands, including Dippin’ Dots, SuperPretzel, ¡Hola! Churros and Icee, even if the company name itself is largely unrecognizable to the average consumer.

Built around the motto, “Fun served here,” J&J’s roughly 30 brands are available across nearly every retail channel, from movie theaters and amusement parks to supermarkets, convenience stores and restaurants.

“Gerry used to say it was dusted from ashes,” Dan Fachner, J&J’s CEO, said of the company. “He built what it is today, and last year we did roughly $1.5 billion [in net sales.] It’s a good story with a lot of great brands.”  

Few executives are as familiar with J&J as the 64-year-old Fachner. He started working for the company in 1979, repairing ice cream equipment and delivering the flavored syrup used to make the frozen concoctions to retailers while attending a trade school in Arizona.

Fachner rose through the ranks at Icee, gaining experience in everything from finances and operations to sales and marketing, before assuming the role of president. J&J eventually purchased Icee in 1987, bringing Fachner into the fast-growing snack food company. When Shreiber retired in 2021, Fachner was chosen as CEO.

He has been careful not to drastically alter what made J&J successful. But Fachner’s appointment, as only the second CEO in the company’s more than 50-year history, provided him with an opportunity to rethink how it sold and marketed its fun-focused brands.

He has used the opportunity to refresh the company’s executive ranks, often going outside J&J to bring in experience from other CPG sectors. Within 10 months of taking over, Fachner hired his CFO from Walmart and added a chief marketing officer with 23 years of experience from Coca-Cola. It marked the first time J&J had an executive to oversee marketing company-wide in its history.

“Like a lot of founder-led organizations, [Shreiber] was kind of the heart and soul of everything that happened, and at some point it has to be bigger than you,” Fachner said. “I found when I got here some opportunities to what I believe will take us to the next level.”

Todd Brooks, an equity analyst at Benchmark, noted that J&J has amassed a “unique collection” of brands that are leaders in their respective categories. He praised the executive team’s work on spurring innovation, accelerating cross-selling among its brands and improving margins since it took over.

“They’ve really professionalized the business so dramatically over the past four years,” Brooks said. “I honestly don’t think they get enough credit for the work they’ve done because so much of it has been masked by outside influences” like the pandemic and supply chain disruptions.

Shake it up 

During much of its existence, J&J executives showed little willingness to change how they ran the business.

Sales to stores, foodservice and bakeries — the three segments responsible for its $1.6 billion in annual sales — were run independently within the company. Brands were largely siloed, too. A product did so well in one category, and was often a market leader, there was little incentive to mess with success by bringing it into a new domain where a similar performance was far less certain.

The structure led J&J to miss out on sales and limited its ability to tap into efficiencies, resources and innovations embedded within its snacking portfolio. 

“For a long time, this was a company that really didn't do much, and kind of just kept doing what it was doing,” said Connor Rattigan, an analyst at Consumer Edge. “Obviously in CPG, the world is constantly evolving. They’re constantly talking about innovation and that really kind of didn't happen for a long time with J&J Snack Foods.”

Fachner made changing that a top priority.

Each employee at J&J is given a laminated card outlining five strategies and seven principles they are expected to adhere. Fachner carries his card in his wallet. One of the key principles centers on collaboration among brands and business units. Fachner holds quarterly meetings where leaders discuss ways they can work closer together.

A big part of that centers on cross-selling among its brands. A salesperson with a close relationship at a larger retailer is encouraged to use their connections to open the door for a colleague to sell another product, providing instant credibility and shortening the time to market. 

Few brands exemplify this strategy and the growth potential for J&J more than Dippin’ Dots.

For much of its 36-year existence, the beaded ice cream was a staple of outdoor fairs, sporting events and amusement parks. Fachner, who for years had observed Dippin’ Dots alongside J&J’s offerings at the same venues, lobbied hard for the food manufacturer to buy it, finally getting his chance in 2022. J&J purchased Dippin’ Dots for $222 million — the largest acquisition in the company’s history.

Since J&J added Dippin’ Dots to the fold, it has aggressively expanded where the frozen novelty is sold, often partnering with corporations that already carry its other snack products. Movie chain AMC, which has offered Icee and SuperPretzel for decades, started selling Dippin’ Dots in 2023. 

A similar cross-selling strategy emerged at the restaurant and entertainment chain Dave & Busters. It began carrying SuperPretzel soft pretzel bites in 2011, a brand new SKU created for them, before adding Icee in 2024. It’s rolling out Dippin’ Dots this fall.

Theaters and indoor amusement centers are especially valuable for Dippin’ Dots. Not only do they bring the frozen treat into new outlets, but they help balance out the seasonality that naturally comes with ice cream sold outdoors in variable climates.

J&J also is deepening Dippin’ Dots’ presence in convenience stores, which Fachner calls “a really big opportunity,” with the installation of ultra-cold freezers. (Dippin’ Dots must be kept at minus 40 degrees Fahrenheit so the frozen beads keep their shape. The average store freezer is typically set at minus 32 degrees.) 

The expansion effort is paying off. Dippin’ Dots achieved its highest sales and profitability levels in its 36-year history in 2023.

“The brand is a great fit and a natural complement to wherever people are having fun,” Fachner said. “It’s ... universally appealing, allowing lots of channel expansion opportunity.”

Rattigan said J&J has a ”more focused business” compared to other CPG food companies that generally sport broader portfolios and typically play in more categories. J&J’s deep, but heavily focused portfolio centers on entertainment outside of the home, giving it a leg-up on competitors who try to encroach on its business.

“When you're a unique player and you have that kind of established moat, you have that entrenched presence in those certain locations, you own the stadium, you own the movie theaters,” he said. “It's hard for someone else to come in there and win and take those away from you.”

J&J is “primed” to further increase distribution of its products, Rattigan added. He said the company is “currently demonstrating progress” and gaining foodservice distribution in theaters, c-stores and other establishments.

Retail also could be a lucrative opportunity for J&J. Dippin’ Dots, for example, is in just over 2% of the retail locations where it could conceivably be carried. Luigi’s Real Italian Ice and Icee also have opportunities to command a bigger presence at stores, Rattigan said.

Spreading the risk

J&J's commanding presence in three channels and multiple usage occasions has proven valuable in allowing the company to reach more consumers. Roughly 60% of J&J’s net sales in 2023 came in foodservice, a quarter in frozen beverages and the rest in retail.

This diversity has proven especially valuable amid the volatility and uncertainty that has roiled the market in recent years.

During the pandemic, movie theaters, which at the time made up 25% of Icee’s sales, shut down. But retail sales of J&J’s products rose 40% as homebound shoppers stocked up, benefiting brands such as Whole Fruit, Luigi’s and SuperPretzel.

More recently, a prolonged period of inflation has led every food manufacturer to pass along multiple price hikes. J&J has been no exception. The company increased the price for items it sells at retail three times during an 18-month period. 

But higher costs for groceries and other everyday staples have prompted cash-strapped shoppers to cut back on how much they spend when they go to the store. This has resulted in sharp product volume drops for many CPG companies, including J&J.

Despite challenges at the supermarket, visitors to movie theaters and theme parks — places some families are choosing as alternatives to more expensive vacations — are not afraid to spend on treats like Dippin’ Dots. Other consumers might opt to stop by a convenience store for an Icee rather than spend $20 on a meal at McDonald’s.

“These are affordable luxuries,” Fachner said. “We have a really broad selection of places that we sell to today, which gives us some protection from an economic struggles. I call us recession resilient, not recession proof, but resilient because we have that broad array of customers.”

Brooks with Benchmark said J&J’s product mix is ideally positioned for an environment where consumer spending is under pressure. “It gets back to brands that matter, brands that differentiate versus the me-too brands that don’t feel like a special way to spend money,” he said. 

Let’s make a deal

While J&J hasn’t shied away from developing its own brands — most notably ¡Hola! Churros and Dogsters, an ice cream-style treat for dogs — the company has largely depended on acquisitions to build its brand portfolio. It’s a strategy that’s unlikely to change.

“There probably isn’t a week that goes by that I’m not looking at something. I’m looking all the time,” Fachner confessed. “But we’re being very disciplined in the approach that we’re taking here.”

J&J can afford to be patient. The business is growing and doesn’t need a deal to boost sales. In 2023, the food manufacturer posted its third consecutive year of double-digit net sales growth. Profitability also was the highest in its history. 

Fachner is no stranger to deal-making. In addition to Dippin’ Dots, he recently acquired the Thinsters cookie brand from Hain Celestial. Fachner also purchased and integrated more than 20 regional Icee distributors during his time with the frozen beverage company.

Any future deal needs to follow the Dippin’ Dots playbook, Fachner said. The brand must be scalable across multiple channels and have $100 million or more in sales so it’s big enough to “be something meaningful” at a food company of J&J’s size.

“I’m not going to overpay. We have enough organic growth,” he said. “I can afford to be patient and disciplined in the approach that we take with M&A.”

Still, Fachner has broad ambitions for J&J. The executive wants to more than triple net sales to $5 billion and bring organic growth from 3% to 5% annually to the mid-single digits. 

Dan McCarthy, an associate professor of marketing at the University of Maryland, said while J&J still has plenty of room to increase sales through cross-selling and other changes within its business, he was skeptical that the snack maker has enough opportunity to reach its more lofty organic growth targets.

“It's certainly a noble goal to try and be able to squeeze more revenue out of the existing base,” McCarthy said. “But I'm not sure that I see a whole lot of new levers that they would pull to be able to do that.”

For Fachner, obtaining a higher growth rate is not only dependent on having products that resonate with consumers but having the ability to manufacture more of them efficiently.

“We have invested a lot in distribution and capacity, but J&J Snack Foods is equally focused on innovation,” he said. “The categories go hand in hand and both are critical to our business’ success and future growth.”

Soon after taking over, he observed that J&J had no capacity to grow churros, pretzels and its other core products.

Fachner has since invested more than $100 million to improve and modernize the company’s supply chain through the addition of six production lines and three distribution centers. This has allowed J&J to increase production of its signature treats, save millions of dollars on shipping and generate more robust margins. 

The extra production capacity provides J&J with opportunities its business didn’t have before. The snack maker can promote its products to customers rather than only responding to existing demand. J&J also can carry less inventory, address a sudden uptick during peak seasons and take on business it previously couldn’t.

“Those are the sort of things that will help them achieve those organic growth rates, just kind of the blocking and tackling of coming up with good new products and building up the supply chain,” McCarthy said. “It's not the stuff that gets headlines, but oftentimes it can really help just kind of keep the company moving forward.”

In 2023, J&J partnered with Subway to sell foot-long churros in the restaurant chain's 22,000 stores, a partnership that could never have occurred without the extra capacity to produce the cinnamon and sugar-coated treats.

The three regional distribution centers in Arizona, New Jersey and Texas have helped cut the average time to ship a product by 38%. On-time performance also has improved, jumping to more than 82% versus 73% in 2023. The regional centers alone will save the company an estimated $10 million annually.

“We've made some really big investments [that allow us to] ... go out and drive the growth where we want to grow," Fachner said.

Analysts remain upbeat on J&J’s prospects but warn that a severe economic slowdown could be problematic.

So far, experiences that J&J serves “have proven more resilient versus more traditional foodservice businesses, but if economics worsen, that could change,” he said.

A slowdown also could hinder the company’s ability to get more of its products into existing or new locations, a key part of J&J’s growth plan.

“If you're really struggling, if the macro environment worsens, you're not taking the Disney trip and you're not going to buy those Dippin’ Dots, then you're probably not going to get that Icee,” Rattigan observed. “That's the big concern for J&J is really the macro environment, and whether or not it can continue to grow distribution in a more challenging macro.”

Fachner said he is looking for ways to enhance J&J and better position it to withstand external challenges. He compared building a strong company to stacking blocks, emphasizing the need for a solid foundation among executives and employees before strengthening distribution and production networks.

“The company has come a long way in a short period of time, and our transformation has been phenomenal, across company culture, vision and strategy,” Fachner said. “There are a lot of great opportunities ahead of us, and I’m excited about what the future holds.”

PepsiCo is buying Mexican-American food maker Siete Foods for $1.2 billion, the snack and beverage giant said in a statement. The transaction is expected to close in the first half of 2025.

Siete Foods, founded in 2014, produces tortillas, salsas, seasonings, sauces, cookies and snacks. Its products can be found in grocery stores, club stores and organic food retailers largely across the U.S. 

The acquisition by PepsiCo further expands efforts by New York-based company to improve the healthiness of its snacking portfolio as consumers more closely watch what they eat.

PepsiCo’s snacking roots are built on household staples such as Doritos, Fritos and Cheetos. But the company has spent several years lowering the amount of saturated fat, salt, sugar and other less healthy ingredients in many of its brands. It’s introduced innovations such as Kettle Cooked Lays and others with better ingredients, such as a Sun Chips variety made with black beans. 

At the same time, PepsiCo has turned to M&A to supplement its snacking portfolio. In 2018, it purchased Bare Foods, which makes baked fruit and vegetable snacks. A year later, it added PopCorners maker BFY Brands to the mix.

Siete makes heritage-inspired Mexican-American foods for a variety of dietary needs and preferences. It sells tortillas made with almond flour, vegan beans and grain-free puffs made with lentils. As consumers continue to stock up on healthier products, Siete stands to be a major beneficiary.

The addition of Siete not only builds out PepsiCo’s better-for-you portfolio, but it also allows it to tap into growing demand for culturally authentic products. Mexican cuisine is the third most popular in the U.S., according to Datassentials, and growing in popularity, particularly among younger adults. 

"PepsiCo believes in the spirit and authenticity of the Siete brand,” Ramon Laguarta, PepsiCo’s CEO, said in a statement. “We look forward to expanding our multicultural portfolio with these incredible products and even more consumers discovering and enjoying Siete." 

The food space has been hit hard by consumers pulling back on what they buy, and how often they make purchases, amid a prolonged period of inflation. 

Laguarta told analysts in July that prices for certain products, like unsalted potato chips or tortilla chips, will likely need to be adjusted to make them more attractive to consumers. Some offerings also will see increased levels of marketing.

In addition, PepsiCo and other companies are facing pressure from private label. Siete’s unique flavor profile and product mix will provide PepsiCo with a differentiated, on-trend brand that will help it better withstand these outside pressures.

The Siete deal came nearly two months after Mars announced the purchase of Pringles maker Kellanova for $36 billion, the biggest deal in the food space in years. The merger will transform the candy icon into a leading seller of chips, crackers and other treats — giving it greater scale in the competitive snacking space and providing more heft to go up against juggernauts such as Mondelēz International and PepsiCo.

Snacks are continuing to gained prominence over the years as a premier spot in consumers’ lives. 

Six out of 10 consumers said they prefer multiple meals throughout the day to three larger ones, according to Mondelēz’s most recent State of Snacking report. 

From identifying a new trend known as “snackification” — opting for larger, protein-rich snacks instead of meals — to the rise in indulgences, Circana’s Eating Patterns in America research dives deeper into the snacking trends that are shaping foodservice and retail.

An increase in indulgence

The pandemic left consumers uncertain and stressed about the future, leading them to reach for treats throughout the day to ease their emotions. Research indicated that consumers are still opting for these comforting foods such as potato chips, cookies and ice cream. 

Brands have responded by reimagining their core offerings to make them more snackable and playful, the Mondelēz report said.

Doritos, Cheetos, and Sunchips debuted miniaturized versions of their products in order to give consumers more variety.

Although the data from the report revealed that the popularity of healthier snacks such as fresh fruits have declined, as their prices were more affected by inflation, companies have found ways to integrate the desired better-for-you ingredients into their indulgent offerings.

Clean labels are increasingly influencing consumer purchasing decisions, and companies are responding by putting an emphasis on “clean-label” and “better-for-you” ingredients in order to appeal to the changing consumer.

Price, however, still remained consumers’ top concern and priority in terms of picking foods to snack on, the report said. 

Snackification

Although augmenting a meal with a snack item isn’t new — chips with a sandwich, for example, has always been a lunchbox staple — more and more consumers are actually replacing meals with snack items.

Companies have been capitalizing on this by pushing protein-rich snacks. Chomps took the spot for the fastest growing snack brand in the U.S., according to data from Numerator. The meat stick maker touts its high protein content compared to added sugar and calories.

Other large food CPGS introduced protein-rich product lines such as Chobani with its new mega protein yogurt offering. General Mills also introduced Ghost cereal and Kellanova’s Eggo Fully Loaded waffles.

For the year ending in March 2024, SnackTrack shows 37% of main meals contained a snack item compared to 29% in 2010, the report said. And nearly all generations consume more snacks at breakfast than they did in the past.

The Mondelēz report pointed to foods such as fruit, snack cakes and muffins replacing traditional breakfast foods. Additionally, consuming snacks with or instead of a conventional lunch has grown prior to the last decade.

How the generations snack

Gen Xers, who are currently ages 44 to 59, were found to total more in-home snacking than any other generation, representing 21% of the category. The generation is at a pivotal life stage right now, the report said, grappling with becoming empty nesters but whose shopping behaviors are still dictated by younger family members and elderly parents.

Because the shopping habits of Gen X mirror who they shop for, they take a large part of the market as both kids and boomers snack at high rates.

Although millennials are likely to live in households with younger kids, they snack less than their younger and older counterparts.

Millennials accounts for only 15% of in-home snacking. Millennials are also still at a time in their life where they are developing favorites and brand loyalty. “Brands need to engage millennials now and appeal to their desire to stick with hip snack brands,” the report said. This can be done by working with influencers, deploying innovative branding, or experimenting with flavor profiles.

Although the report didn’t include data from Gen Z, recent research conducted by Lifesum found that Gen Z is health-conscious and seeks out functional nutrition to improve their holistic wellness.

Gen Z is also enjoying sweet indulgences, while wanting nutritious options in the category. Although they may reject previous generations’ infatuation with diet culture, this group still sees the value of wellness.

The Circana data found that Gen Alpha, born between the years of 2010 to 2024, is notoriously known for being big snackers. While older kids and teens have more influence over what their parents buy for them, parents of younger kids do more gatekeeping and seek healthier options, the report said.

Companies can capitalize on this by helping parents feel more comfortable with what they buy. 

“Brands and retailers will wind up leaving money on the table if they don’t think about ways to engage consumers as they enter different life stages,” the report said.

Mondelēz International’s BelVita is launching energy snack bites as the brand aims to provide a mid-morning option for busy consumers. 

The BelVita Energy Snack Bites, which come in Banana Dark Chocolate and Sunflower Seed, and Blueberry and Sunflower Seed, are made with real ingredients, the company said. They also have no high fructose corn syrup, artificial flavors, colors, or sweeteners, 

The bites come as consumers look for more from food than just satisfying their hunger, particularly when they are on the go.

BelVita’s breakfast biscuits were launched nearly 30 years ago in France and today are sold in more than 50 countries. Mondelēz promotes the brand as a nutritious offering that provides sustained energy for consumers in the morning.

The launch of BelVita Energy Snack Bites has many of the same ingredients as the popular biscuits — including whole grains, fiber and B vitamins — but it comes in a more convenient portable offering. This is why Mondelēz is marketing it as a mid-morning snack to bridge the gap between breakfast and lunch when consumers are active and need a quick pick-me-up. The snack bites provide Mondelēz with a way to extend the reach of BelVita and increase usage occasions for the brand. 

Data released by Statista in 2020 found roughly two-thirds of consumers were interested in energy-boosting snacks. The firm noted that the global healthy snacks market is forecast to jump from $86 billion in 2021 to more than $152 billion in 2030.

With gut health top of mind for consumers, the aptly named Gutzy Organic is moving quickly to capitalize on its popularity.

The pouch maker launched a new packaging design and flavor, botanical turmeric and mango. It joins Gutzy’s other products, such as Apple Spinach Kiwi Kale and Apple Strawberry Blueberry + Turmeric Dandelion. The company’s products contain 5 grams of prebiotic acacia.

Gutzy’s founder and CEO David Istier said the growth of prebiotic sodas such as Olipop, Poppi and Health-Ade’s SunSip shows that several years after the COVID-19 pandemic disrupted the food industry, consumers continue to look for items that will improve their gut health.

“We’ve seen a shift into people looking at natural solutions instead of just popping pills,” Istier said in an interview. “That’s why prebiotics are gaining momentum, and we’re a part of that.”

Gutzy’s goal is to provide a clean-label, convenient snack to consumers looking for more fruits, vegetables and prebiotics but lacking sufficient time to prepare them.

Istier said by occupying a niche category with few competitors, it has been able to grow its presence quickly.

“If you go to a supermarket, we’ll be next to refrigerated food cups and bars,” he said. “In that environment, we are unique.”

Istier is a longtime veteran of food and beverage companies, most notably working in executive roles at the parent company of Go Go Squeez. He saw an opportunity to bring the fruit pouch brand’s squeeze bottle format into a product targeted at adults, particularly in the fledgling gut health category which hadn’t yet been explored in snack products.

Gutzy launched its products in 2019 and is now in 6,000 stores, including Wegmans, Publix and Meijer. The company pointed to Nielsen data finding that it was the fastest-growing brand in the fresh and healthy snacks category in the 13-week period ending in January 2024.

“Prebiotics were big in the supplement world, but they were not really in many mainstream food and beverage products before we launched,” Istier said. “We now have very strong repeat consumers, which is the most important thing.”

 

Prebiotic potential

Prebiotics stand out from other gut health ingredients because they feed the good bacteria that already reside in the gut. Consumer awareness of prebiotics has grown significantly as people place a greater importance on their health. The global prebiotics market was valued at roughly $8 billion in 2023 and is poised to increase at a compound annual growth rate of 14.9% by 2030, according to a Skyquest projection.

Istier said Gutzy prioritizes keeping its consumers informed about the benefits of the ingredients through its packaging.

“We have a claim on the back that talks about how acacia has been proven to increase the growth of beneficial bacteria over a period of four weeks,” Istier said. “It’s important for us to add something that is measurable, with what we know is scientifically backed up.”

As consumers familiarize themselves with prebiotics, products in the space are seeing their growth potential expand. Earlier this month, Poppi co-founder Allison Ellsworth told Food Dive in an interview that her company has not been approached by a suitor looking to buy the beverage maker. Instead, she is focused on growth after topping $100 million in sales. 

Istier said Gutzy is prioritizing R&D to develop a “very unique” product containing plant protein to expand the reach of its brand, particularly with consumers looking for more sustenance from a snack.

“It will be a bit like what we have currently with refreshing fruit, but with the creaminess of yogurt,” Istier said. “The protein trend is not going away anytime soon, and we need to be in that space moving forward.”