As the cost-of-living crisis carries on, pricing moderation, volume recovery, and attending to heightened value perceptions have become priority across snacks. The disinflation process has begun but is likely to land differently across markets and categories, if at all, as supply and demand balances are sought out. Beyond prices, healthier snacking and the targeting of nutrients of concern (sugar, salt, and saturated fat) remain key to snacks’ future growth.
This report comes in PPT.
In 2022, Western Europe saw a decline in snacks value and volume as high inflation and the impact of the war in Ukraine weighed on consumers’ snacking habits. 2023 is expected to turn sales around as the wider industry pushes for more reasonable product prices and retailers lead the way on disinflationary actions.
As consumers have been unable to afford as many snacks as in the past, given high inflation, the industry is set to focus on improving volume growth in the years to come for more sustainable, balanced growth. The expected improvements in volumes, however, may come as contractions to value growth – especially as inflationary pressures ease and price growth normalises.
Input cost inflation has remained elevated above expectations for more than a year, triggered in part by the pandemic. Confectionery commodities like sugar and chocolate are surfacing as continued inflationary pockets for snacks. A lot of this is pointed to poor crop yields and the policies aimed to curb demand for sugar.
As the disinflationary process has begun to show, snack category prices, and category prices by market, are showing varying degrees of change – from the still above 100% inflation in Argentina snack bars to the price drops in China snack bars. The process towards normalised prices is set to be fragmented. But as prices moderate, healthier snacking demands are expected to grow and better for you (BFY) innovations are set to deliver on value for money demands.
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