While inflation continues its decline going into 2025, the global economy faces moderate growth as rising uncertainty casts a shadow over the outlook. In response, top snack industry players are implementing diverse strategies to ensure stability and drive growth.
Optimising portfolios, making strategic investments
Snack companies are actively refining their portfolios by leveraging acquisitions, divestitures, and strategic investments. In 2024, major deals included Mars’s acquisition of Kellanova, PepsiCo's purchase of Siete Foods, and Ferrero's acquisition of Nonni's Bakery. These moves reflect a focus on fast-growing categories, including savoury snacks, sugar confectionery, sweet biscuits, and snack bars.
Beyond portfolio refinement, snack companies are doubling down on growth, diversification, and innovation. For example, Unilever's strategic decision to separate its ice cream division highlights a broader trend towards refining business models for more focused innovation.
Local and global tastes drive international expansion
In emerging markets, which are expected to be the focus of global companies’ expansion, brands are increasingly turning to localisation. Adapting products to local tastes and preferences is key to capturing new consumers.
At the same time, consumers are increasingly looking to local flavours from markets other than their own. For example, the global success of Dubai chocolate can be attributed to its unique texture, vibrant design, and the powerful influence of social media.
68% of global consumers expressed that experiencing cultures other than their own is important to them
Source: Euromonitor International’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2024
According to Euromonitor’s Innovation Attributes Tracker, which tracks attribute trends across new product launches online across 54 FMCG categories, chocolate confectionery with pistachio flavour increased by 73% between Q1-3 2023 and Q1-3 2024.
According to Euromonitor’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2024, 22% of consumers snacked out of boredom, almost doubling from the 12% who did so in 2023. As consumers increasingly seek out snacks for mood occasions, companies are responding by offering multi-sensory experiences that blend unique flavours and textures. Spicy savoury snacks continue to gain traction, with leading brands introducing new products, fuelling intense competition.
Health-orientated snacks continue to develop
Health-focused regulations are gaining momentum worldwide, with consumers becoming more health-conscious and more attentive to the health claims and functionality of the snacks they eat.
40% of global consumers closely read nutrition labels when purchasing food and beverages
Source: According to Euromonitor’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2024
Additionally, 54% actively seek out products with healthy ingredients, including those with reduced sugar, salt, saturated fat, gluten, and calories. Consumers are also increasingly interested in foods that offer added functional benefits, such as improved general health, mental wellbeing, and energy levels.
There is a growing willingness to pay a premium for functional foods that promote specific health benefits, including weight management, brain health, and digestive health, and for foods enriched with antioxidants, vitamins, or high protein content. In general, consumers are gravitating towards more natural, better for you snacks. As an example, in mid-2024, Mondelez launched gluten-free Oreos in Argentina – already available in the US and Canada – to cater to consumers with coeliac disease or those simply looking to reduce gluten consumption.
Sustainability remains a priority
Guilt-free indulgence means not only healthier snacks but also more sustainable ones.
34% of consumers seek natural food and beverages, 25% prioritise locally-sourced or locally-manufactured products, 24% favour eco-friendly options, and 20% value support for local communities
Source: Euromonitor International’s Voice of the Consumer: Sustainability Survey, fielded January to February 2024
Perhaps unsurprisingly given these consumer attitudes, sustainability is a top priority for leading snack companies as well. For example, there are several initiatives related to cocoa production among chocolate manufacturers, both around traditional production and important new approaches such as Mondelez’s investment in alternative (cell-cultured) cocoa production in 2024. Cocoa investments are particularly relevant, as climate-related crop damage sent prices soaring in 2024, hitting nearly USD10,000 per tonne, compared to around USD2,500 between 2019 and 2022, due to droughts in Ghana and Côte d’Ivoire. Global snack companies are also focusing on the social aspects of sustainability and developing initiatives committed to improving the lives of cocoa farmers.
Competition intensifies as companies diversify growth strategies
Overall, top snack companies are seeking growth through M&A and divestments, focusing on key categories and emerging markets. Some use “glocalisation”, adapting their global brands to local tastes, while some innovate new products utilising the popularity of local niche brands and flavours going viral globally. Snack companies also continue to focus on healthy options and sustainability, and brands are collaborating globally to create co-branded products generating social media buzz.
Learn more about strategies that are shaping the future of the snack industry in our report, Competitor Strategies in Snacks.