By Sally Lyons Wyatt

The snack food industry has been steadily growing over the years, even outpacing total food and beverage trends. Snacking in the U.S. is becoming more prevalent and is now a regular part of the day for many consumers, including millennials and boomers. As a snack manufacturer or retailer, what do you need to know now and in the years to come to drive growth with these important consumer segments?

With the U.S. demographic landscape evolving, shoppers are making different buying decisions, especially when it comes to snacks.  IRI’s 2015 Consumer Snacking survey shows that, compared to 2011, there’s quite a bit of good news for the snacking industry, including less shoppers (-16 percent) saying that they are cutting back on the amount of money they spend on snacks, and more consumers (+11 percent) saying that they are snacking more frequently.

With the various roles snacks play, consumers are looking for a balance between healthier and indulgent options. These roles and demand moments are instrumental in consumer choices and growth in several categories. For example, bars realized growth in 2014 due to several reasons, including being a healthy one-handed food option that is both a snack between meals and a nutritional mini-meal. Super premium and niche brands are leading the growth in several bakery and snack categories, like bars, cookies, pastry/doughnuts and bakery snacks. These niche products are driving excitement in the store and down the center store aisles and impacting sales of established brands.

Innovation has played a large role in the growth of snacks but so has tailor-made snack ideas. And innovation does not have to be product innovation – it can be packaging, communication, and/or technology.  Oreos™ Trending Vending Lounge at SXSW, for example, was an innovative way to engage millennials and increase sales.

The shift in demographics in the U.S. is also fueling changes, as millennials and boomers have different snacking attitudes and are making different snack choices at retail and in restaurants. Millennials want health, convenience, brand trust and customization with their snacks. Boomers are focused on wellness, convenience and customization. Snacking customization, in particular, is important as we’ve already seen with specialty stores and their unique coffee, juice and chocolate assortments. Even the time of day that snacks and mini meals are consumed varies. Eighty-one percent of consumers eat bakery snacks; however, millennials and boomers consume them at different parts of the day. 

Interestingly, almost one-third (32 percent) of both millennials and boomers are reducing impulse snack purchases. However, 36 percent of younger millennials (18-24) are snacking more frequently and 30 percent are eating more pre-portioned snacks. Many (32 percent) older millennials (25-34) are bringing snacks to school/work more often.

As incomes reduce in later years, some boomers will, of course, make cuts to their snack spending. This is a good opportunity for manufacturers to innovate with price-conscious products tailored to this segment. More than a quarter (26 percent) of younger boomers (45-54) and 27percent of older boomers (55-64) are cutting back on the amount of money they spend on snacks, while 28percent of younger boomers are buying what’s on sale more often rather than their favorite brands.

Eating snacks as meals at home is becoming the norm for all age groups, including 44 percent of millennials and 32 percent of boomers. Snacking across the day is also becoming typical, though millennials tend to snack all across the day while boomers start snacking later and end snacking earlier. A large percentage of both millennials and boomers have at least three snacks per day:

• 64% of younger millennials
• 54% of older millennials
• 43% of younger boomers
• 33% of older boomers

Of course, certain snack product claims resonate better with certain ages. Organic snacks are heavily driven by millennials, who also want to add more protein to their diets and reduce fast food consumption. On the other hand, boomers prefer snacks that are gluten free, natural and have fiber.

Here are some ways you can capture new growth in snacks:   

First, don’t ignore millennials OR boomers. The snacking industry will hit at least $200 billion in 2020, with 60% of sales coming from these two consumer segments. Snacking is important to them and innovation opportunities abound.

Make sure your innovation is customized to appeal to the different generations. Think about ways you could appeal to consumers with specific allergies or diseases who may need or appreciate certain types of ingredients or nutrients.

You also want a full view of your brand engagement, including how different segments are engaging with your brand at home and away from home. Explore the new path-to-purchase, day parts, trip missions and assortment options for different age groups and health preferences.

The future is bright for snacks in the U.S. Knowing your opportunities in the space will help ensure that you get the right snack in front of the right consumer at the right time.

And, yes, I think I need a snack now.  

For more information on the latest snacking trends, watch the State of the Snack Food Industry webinar.