Snack Food Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 595 snack food manufacturers in the US produce a variety of salty snacks, including nuts, chips, popcorn, pretzels, peanut butter, and other grain or seed-based snack foods. Related product categories include dried and dehydrated foods and confectionary products. The industry does not include crackers or cookies.

Large Firms Dominate

The snack food industry is highly concentrated; the 50 largest companies account for 86% of revenue, and the top four companies account for 50%.

Health Concerns

The nutritional content of traditional salty snacks, such as chips and pretzels, has come under public scrutiny, due to the connections between processed foods and the rising incidence of obesity, diabetes, and heart disease.

Industry size & Structure

The average snack food manufacturer employs 105 workers and generates $68 million annually.

    • The snack food manufacturing industry consists of about 595 firms that employ 62,800 workers and generate $40.4 billion annually.
    • The industry is highly concentrated; the top 50 companies account for 86% of industry revenue.
    • The biggest firms with snack food manufacturing operations are multi-national companies with large portfolios of food and beverage products and include Pepsico (Frito-Lay), Kraft-Heinz (Planters), and Campbell Soup (Snyder’s-Lance, Emerald).
    • Roasted nut and peanut butter manufacturers account for 41% of firms and 39% of industry revenue.
    • Other snack food manufacturers account for 59% of firms and 61% of revenue.
                                    Industry Forecast
                                    Snack Food Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 30, 2024 - Labor and Ingredient Costs Fueled 2023 Price Hikes
                                    • The producer price index for snack food manufacturers, which measures prices before reaching consumers, rose 6% in December compared to a year ago after posting a 12% gain in the previous annual comparison amid rampant inflation in the grocery aisles, data from the US Bureau of Labor Statistics show. By comparison, employment by snack food manufacturers was relatively flat – up just 0.5% in December year over year – while average wages at food manufacturers hit a new high of $22.80 per hour in December, a 3.9% year-over-year change. Rising consumer spending and price hikes by producers are helping to offset rising labor and ingredient costs for snack food manufacturers.
                                    • The price of cocoa, a key ingredient in many popular snacks, has surged to record highs, The Wall Street Journal reports. In mid-March, May cocoa futures added $438 a metric ton to end at $7,405 in New York, nearly three times the price compared to a year ago and 38% above the previous record set in July 1977 during an earlier period of poor growing conditions in West Africa that shrank the global supply. Most of the world’s cocoa is grown in West Africa where unusually wet weather followed by hot, desert air led to a weak harvest and diminished stockpiles for the second consecutive year. Moreover, the supply shortage has been exacerbated by speculators stocking up on cocoa futures. The surge in cocoa prices has chocolatiers, confectioners, and big food companies raising prices, tweaking recipes, and shrinking products, WSJ reports.
                                    • The food industry is pushing back against the US government’s probe regarding the health effects of heavily processed (aka ultra-processed) food, The Wall Street Journal reported in January. The industry is concerned that the government’s bid to get Americans to eat a more healthy diet could threaten its profits. Opposition to ultra-processed foods – those foods most likely have many added ingredients such as sugar, salt, fat, and artificial colors or preservatives – is gaining steam, WSJ reports. Federal researchers are studying the health effects of processed foods and lawmakers are holding hearings highlighting their possible risks ahead of the next release of dietary guidelines, which tell Americans which types of foods to eat and how much. Some big food companies are seeking to forestall those recommendations in the coming guidelines and defending processing to regulators, arguing that it's made food safe, convenient, accessible, and affordable, according to WSJ.
                                    • Some Oreo lovers suspect the maker of the chocolate creme-filled snacks of skimping on the filling, a charge manufacturer Mondelez denies, The Wall Street Journal reports. Oreo – the world’s best-selling cookie – is the latest example of a brand suspected of engaging in shrinkflation – the practice of reducing a product's amount or volume per unit while continuing to offer it at the same price. Distrust of big consumer brand companies has grown as inflation has required consumers to pay the same amount for less. On r/shrinkflation, a Reddit forum where consumers vent about perceived instances of the practice, Oreo fans are complaining about the perceived lack of creme, according to WSJ. “Nowadays it’s barely even a squeeze of filling on the cookies,” wrote one poster. Whether or not the charge is warranted, consumers’ perception that Mondelez is skimping on the creme has the potential to tarnish the iconic Oreo brand.
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