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 570 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.

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.

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%.

Industry size & Structure

The average snack food manufacturer employs 103 workers and generates $69 million annually.

    • The snack food manufacturing industry consists of about 570 firms that employ 58,900 workers and generate $39.5 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 42% of firms and 37% of industry revenue.
    • Other snack food manufacturers account for 58% of firms and 63% of revenue.
                                    Industry Forecast
                                    Snack Food Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Feb 28, 2023 - Store Brand Cookie Sales Grow
                                    • Grocery price inflation is driving sales and volume growth of private-label products -- including salty snacks -- the Private Label Manufacturers Association (PLMA) reported in its 2023 Private Label Report. Store brands, which typically cost less than national brand products, contributed to an 11.3% sector sales increase in 2022, according to full-year data from IRI Unify. In 2022, store brands’ annual dollar volume increased by $23.2 billion, setting a new record of $228.6 billion for sales across all US retailing channels, according to the PLMA report. Increases among food products were particularly strong, with dollar sales of salty snacks up 10.1% to $1.6 billion and sales of cookies rising 18.3% to $3.4 billion last year.
                                    • Whole Foods Market is asking its suppliers to lower prices as inflation moderates, The Wall Street Journal reports. The Amazon-owned grocery chain told suppliers at a recent virtual summit that it wants to bring down retail prices in its stores as companies’ own costs start to decline, according to a recording of the meeting viewed by WSJ. Food manufacturers have raised wholesale prices, citing higher transport, labor and production costs, and grocery chains have passed those increases along to customers. While higher food prices have helped grocery-store operators and their suppliers generate higher sales and profits, inflation-battered consumers are cutting back on purchases, trading down to less expensive store brands, and are doing more shopping at dollar stores to save money. While overall inflation has begun to slow, grocery prices have continued to climb, although less steeply in recent months.
                                    • To crack down on fraud and strengthen oversight, the US Department of Agriculture in January issued new requirements for foods labeled organic, Food Manufacturing (FM) reports. The new rule strengthens enforcement of the department’s strict definitions of organic, which must rely on "natural substances and physical, mechanical or biologically based farming methods to the fullest extent possible." It requires USDA's National Organic Program certification for all imported organic food, increases certifications of more businesses in the supply chain, and boosts authority for inspections, record-keeping, traceability and fraud prevention practices. The Organic Trade Association (OTA), which lobbied for the rule, said it represents the biggest change to organic regulations since the creation of the USDA organic food program. Sales of organic foods in the US topped $63 billion in 2021, according to OTA.
                                    • More than two-thirds of food and beverage company executives have a positive outlook for 2023, according to a recent survey released by accounting and advisory firm Marcum LLP. The survey showed that 69% of executives were optimistic about the food and beverage industry this year. Nearly 70% of those surveyed said their firm’s revenues were up in 2022 compared to 2021, and of those reporting growth, nearly half said 2022 revenues were up by 10% or more. However, 70% of respondents said inflation, and rising commodities and other costs were their top concern for 2022 and 2023. To cope with inflation in 2023, 62% of food and beverage executives said they plan to trim costs and 57% say they will raise prices. About a third of those surveyed said they plan to negotiate with suppliers to help tame inflation and about the same percentage will alter inventory strategy.
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