The minnows may outswim the whales in the healthy-ingredient snacks market

The minnows may outswim the whales in the healthy-ingredient snacks market

American consumers have permanently changed their eating habits.  The era of three square meals a day has gone the way of the typewriter and vacuum tube.  More and more Americans eat smaller portions of food more frequently throughout the day, and there is universal agreement in the food industry that this megatrend is here to stay.  Another cultural shift fueling the healthy-ingredient snacks market is the high priority placed by many consumers on making sure that the food they-and their kids-eat is safe and healthy.  These trends are converging to produce a new generation of snackers attracted by the “health halo” surrounding healthy-ingredient snacks, creating a vibrant market for snacks such as cereal/granola bars, snack nuts and seeds, dried fruit snacks and trail mix. 

Our new report Healthy-Ingredient Snacks in the U.S. highlights the surprising influence of numerous small, boutique marketers in setting the tone and raising the bar for competition in the healthy-ingredient snacks market.  These often are family-run and given to cause marketing.  They frequently use locally sourced ingredients and almost always highlight their concern for the global environment as well as the health and well-being of their customers.

These smaller firms have an outsize impact on the market.  First, they are a never-ending source of the innovation that characterizes the market.  Boutique firms are a main driver of an unceasing flow of new healthy-ingredient snacks based on inventive flavor combinations, exciting ingredient ideas, innovative formats and shapes, exotic fruits and vegetables, “superfoods” claiming to provide wide-ranging health benefits, bold contrasts of the sweet and the salty, and novel and unexpected amalgamations of spices and heat from around the world.

Another characteristic of the smaller firms shaping the healthy-ingredient snacks market is the fact that their products are surrounded by the brightest and shiniest of “health halos.”  Of course, all marketers of healthy-ingredient snacks take full advantage of the health-halo effect, a phenomenon that leads consumers to perceive that food products with certain claims, such as “organic” and “natural,” are healthier for them than other foods are, regardless of what a nutrition scientist might say.  Healthy-ingredient snacks commonly carry labeling that sets them apart with objective characteristics such as non-GMO, vegan or organic.  They also often are labeled more subjectively as being “local,” “pure,” “real,” “natural,” “safe,” “clean,” “minimally processed” and “allergy-friendly.”

However, the products marketed by boutique healthy-ingredient snacks marketers appear all the more safe, healthy and authentic because the founders of these companies have a deeply personal story to tell about why they got into the snacks business.  The entrepreneurial drive of healthy-ingredient snacks marketers can be based on biographical experiences ranging from a love of baking to family illnesses to business-school projects to just plain epiphanies seemingly coming from nowhere.  These fledgling entrepreneurs are passionate about their products and are able to leverage their personal history and enthusiasm with consumers. 

Major marketers of packaged foods have not ceded ground to these upstart healthy-ingredient snacks marketers.  Companies such as Kellogg and General Mills are aligning their strategies and assets to take advantage of the growing market for all kinds of snacks, including those in the better-for-you category.

This Packaged Facts report raises two strategic questions for mega-marketers of snacks. First, will their focus groups and test kitchens prove agile enough to compete with the continuous flow of new and inventive products emerging from boutique healthy-ingredient snacks marketers?  Perhaps even more importantly, can multinational corporate marketing organizations find ways to make consumers trust their healthy-ingredient snacks to the same extent that consumers believe in the products and marketing messages of small and folksy firms?