I and other Foodsphere observers have been saying that an overall recession in the Snacks Industry was due. In company with an inevitable drop in junk food consumption as the stuff gets more ex-pensive, and folks become more concerned with healthy eating…
I became aware of this phenomenon when the first symptoms came to light, back around a year ago. That was when fiscal results for the previous year were released… And Pepsico reported the first sales ‘plateau’ in snacking in its history….
Major indicator
Pepsi, of course, isn’t just a fizzy soda maker. It’s owns dozens of snacks brands, a whole passle of them under its Lay’s brand banner alone. So, when a major power in a huge food sales category reports it’s ‘stuck’, that’s big news. And other players will be worrying if they’re next.
Add to that an unexpected cranky, out-of-character social media video from then-US President Joe Biden condemning snack-sector shrinkflation.
Since then, other subsectors of the snacking space have also reported lagging sales. Particularly the sweetened, fizzy drinks pie chart slice, as excess sugar, specifically, comes under increasing scrutiny – and criticism.
The so-called War on Processed (particularly ultra-processed) Foods has hotted up considerably over the same period. That trend has been attributed to increasing condemnation by the medical and nutritional establishments bolstered by a veritable avalanche of learned studies showing, each succeeding round, clearer and clearer connections between junk food and cancer, heart and meta-bolism-related diseases.
Junk Food in general is taking over the supermarket shelves a well as our own pantries. ‘Junk’ now accounts for more than 75 percent of the foods on Western supermarket displays.
An, to top all that off… Two thirds of all Americans are now considered either overweight or obese, with that figure projected to reach 3/4 by 2030.
Not surprising
So… It’s surprising that most recent market studies suggest an overall recession has begun in the snacking sector.
For a start, high food prices have not been coming down as promised by US president Donald Trump’s a since the start of his second term a little over a year ago. Eggs are still chronically scarce and egg prices remain at record highs, thanks to the avian flu crisis. The rate of growth in overall inflation has more or less stabilized. But prices for everything – especially food – are still rising.
At the same time, wages still aren’t still not keeping pace with inflation, forcing more and more North Americans below the poverty line, and placing unprecedented pressure of the Food Banks and other relief efforts.
Ask your parents or grands what’s the first thing to go, budget-wise, when times truly get tough. They’ll all tell you, it’s the ‘extras’…
Survey says…
Amost half of all Americans asked in a poll taken this past February (42 percent), reported, “they are spending less on snacks now in general. This is already showing up in the bottom line of companies like Frito-Lay, whose corporate owner, PepsiCo, has revealed that sales volume for Frito-Lay decreas-ed by 3 percent last quarter in its latest earnings announcement.”
The deterioration in snack ales has been slow but steady, Ramon Laguarta, PepsiCo CEO, and Jamie Caulfield, the company’s CFO, both said in their public remarks surrounding the earnings announ-cement. The bottom line? Survey respondents overwhelmingly said snacks of all kinds are just getting too expensive. In fact, a recent investigation by TODAY found the average price of a large bag of chips now stands at (US)$6.46 – up 31 percent from 2021.
My take
There are other factors impacting the snack sector negatively, as well. For example, Trump’s tariffs are dramatically pushing up the price of imported snack ingredients.
TODAY reports that the average cost of a bag of chips is currently $6.46. That’s an increase of 31 percent since 2021.
Now… Ask your parents or grands what’s the first thing to go, budget-wise, when times truly get tough. They’ll all tell you, it’s the ‘extras’…
I think it bears pointing out that any signficant decrease in junk food sales and consumption is a good thing for Western Society, in general. The next step in evaluating the magnitude of the so-called snacking recession will be, how deep is it destined to get, and how long it will last. ‘Forever’ would be good…
~ Maggie J.