ELF 2018 Insight: Snack Industry in Great Shape Going Forward

October 9, 2018

AMELIA ISLAND, FLA. — With a paradigm shift in consumer eating habits, salty snacks are poised for revolutionary growth, said Robert Sarlls, president and chief executive officer, Wyandot Inc., Marion, Ohio and second vice-chairman, SNAC International.

“A dramatic increase in the frequency of snacking, combined with a sea change in how people consume food, are redefining our market opportunity,” Mr. Sarlls said.

Speaking at SNAC International’s Executive Leadership Forum (ELF), held Sept. 27-29, he outlined a bullish perspective for the state of the $24 billion salty snack food industry.

“We expect it to grow by at least $5 billion over the next five years,” he said. “This is an extraordinary opportunity for all of us. We just have to pick our spots and be smart.”

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Robert Sarlls, president and chief executive officer, Wyandot Inc. and second vice-chairman, SNAC International, Mr. Sarlls noted that more than 90% of consumers snack regularly — and at all times of the day. Additionally, the latest consumer research shows that 7% of all Americans essentially eat no regular meals.

“The sit-down meal is going away in the millennial household,” he said. “That’s a phenomenal metric for our industry.”

Alternative snacks, such as protein bars and bean chips, are growing “uber fast,” he added. Bean snacks are expected to grow by 25% through 2020 while chickpea-based items will increase by 35%, according to data from Information Resources, Inc., a Chicago-based market research firm.

Not surprisingly, 88% of consumers are willing to pay more for foods they perceive as healthy.

“How you play within this space is up to you,” Mr. Sarlls noted. “The key is to develop quality products, a unique brand position, and consistent management. Most important, follow as well as anticipate the changes taking place with the snacking consumer.”

In this traditionally indulgent category, taste reigns, with 63% of individuals indicating they eat snacks as a “treat for myself.”

Such growth in snacking has drawn a new generation of investors, Mr. Sarlls stated. Not unexpectedly, many of these are larger snack companies partnering with incubator brands. But there is also important interest from private equity firms. He called food “the new tech.”

“Be alert,” Mr. Sarlls warned. “Many of the people coming into our industry have no food background, yet they want to tinker with what we make,” Mr. Sarlls said.

He advised fellow ELF attendees to prepare for more change ahead.

“If you think there was a lot of change in the last 50 years, we expect the next five years to be just as explosive,” Mr. Sarlls observed.

“Things are moving rapidly, and we all need to stay, as leaders of our businesses, very attuned to what’s going on and make sure we remain very relevant with consumers,” he advised.

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