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August 13, 2022
EDITORIALOPINIONPOINTS OF VIEW

Snacking is replacing traditional meals

Market commentary by eToro analyst for Romania, Bogdan Maioreanu

 The Covid pandemic has brought changes to how people eat- due to decreased access to dine-in restaurant options, more people are replacing meals with snacks. A study performed yearly by snacking giant Mondelez (MDLZ) together with The Harris Poll and NextAtlas is showing that in 2021 85% of consumers were eating one snack for sustenance and one snack for indulgence each day.

According the survey, Generation Z (people born between 1997 and 2021) are more likely to snack to relieve anxiety (86%, vs. 76% total) and boredom (79%, vs. 69% total), while millennials (people born between 1981-1996) are the most likely generation to snack to meet their nutritional needs (85%, vs. 78% total), and Gen X ( people born between 1965 and 1980 cites comfort as a top motivator (85%, vs. 82% total).

There is also a shift from traditional meals to snacks, 62% of surveyed people declaring that they replaced at least a meal with a snack. This figure is even higher among Gen Z – 75%. While seven in 10 consumers say they eat sustaining snacks in the morning, only around half do so in the evening (52%). On the other hand, just under half (49%) of consumers eat indulgent snacks in the morning, while 62% indulge in the evenings.

The reasons for meal replacement by snacks are complex, 91% declaring that they eat snacks because they are convenient, 90% because they are fresh, 85% because they are indulgent, 84% because they are healthy.

What types of snacks are preferred? 76% of people who eat snacks biweekly or more are eating sweet biscuits, 74% prefer chocolate, 69% savory biscuits, 66% chips and 56% snack bars. When it comes to chocolate, 74% of surveyed people say that they cannot imagine a world without it.

The results of the survey that questioned 3055 global adults were confirmed by Mondelez (MDLZ) Q4 earnings report. Mondelez exceeded expectations on revenues but missed earnings per share target with 0.02 dollars. The company’s organic sales were up 5.4% in Q4 vs. analysts consensus of 3.9%. Although organic sales were down 0.3% in North America, the result was offset by very positive results for the Latin America (+19.7%), Europe (+6.5%) and Africa, Middle East and Asia (+5.8%) regions. Inflation, increased transportation costs and increased raw materials prices affected gross profit margin that fell 90 bps to 38.7% of sales but was partially offset by pricing, manufacturing productivity and volume leverage.

Mondelez owns multiple snacking brands among which are Cadbury, Milka, Toblerone, Oreo, Belvita, Tuk and Philadelphia.

The snacking trend was largely driven by social media. Over half of global consumers say that  social media has inspired them to try a new snack in the past year (55%) – including even greater majorities of Gen Zs (70%) and millennials (71%)

Another study performed by IRI in the United States is revealing that when it comes to salty snacks, total sales reached 23.9 billion dollars in 2021, with dollar sales up 5.1% year over year. The market is dominated by potato chips with 6.7 billion dollars sales and tortilla chips with 5.2% billion dollars sales followed by cheese snacks, 2.3 billion dollars, ready to eat popcorn, and pretzels 1.2 billion dollars. The demand for salty snacks is forecasted to grow 1.5% in the US through 2025.

But snacking does not mean only sweets and indulgence snacks. Consumers are also looking for healthy snacks for subsistence, snacks that can replace a meal. Dried meat snacks consumption increased by 12.9% year on year, rice/popcorn cakes by 12.3% and dried fruit snacks 6%. Analysts estimate that globally, the meat snacks market is expected to grow at a CAGR of 7% and reach $14.5 billion by the end of 2029.

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Bogdan Maioreanu, eToro analyst and markets commentator, has over 20 years of experience in financial services and investments and a strong background in journalism. He held different Corporate Banking management positions in both Raiffeisen Bank and OTP Bank, before moving to business consultancy roles working for IBM Romania among others. Bogdan is an Executive MBA from Asebuss and Washington University.

 

About eToro

 

eToro is a multi-asset investment platform that empowers people to grow their knowledge and wealth as part of a global community of successful investors. eToro was founded in 2007 with the vision of opening up the global markets so that everyone can trade and invest in a simple and transparent way. Today, eToro is a global community of more than 25 million registered users who share their investment strategies; and anyone can follow the approaches of those who have been the most successful. Due to the simplicity of the platform users can easily buy, hold and sell assets, monitor their portfolio in real time, and transact whenever they want.

 

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