MINTEL | Consumers that prioritize a healthy lifestyle have historically gravitated to food and beverage products with “natural” and “organic” characteristics, but now “fresh” is emerging as a top attribute. Consumers define “fresh” as a clean label, free of additives/preservatives, and typically as either refrigerated products or those found in the produce section.
The growth of Fresh-Snacking Culture
With 94% of adults snacking daily, it’s no surprise that fresh snacking is driving the growth in grocery stores’ snacking categories. Data reported by SPINS indicates that the $40 billion Conventional Snacking market declined 2% annually over the past three years, while “health and wellness” snacking grew 6% annually, driven by outsized growth from Fresh Snacking which grew 8% annually.
Mintel research has identified six packaged product segments to most clearly define the fresh snacking category: refrigerated protein bars, protein snack packs, drinkable soups, bottled smoothies, yoghurts, and other products, such as hummus and guacamole.
The success of these segments, in addition to their clean labels and whole-food ingredients, has been the ability of these fresh snack foods to meet consumer demand for portability and convenience. Furthermore, these products have captured Millennial and iGen consumer mindshare, prompting discussion and engagement across social channels due to growing interest in health-food trends and demand for a variety of better-for-you CPG products.
Driving Attributes of Fresh Snacking
The rapid growth of the fresh snacking category is further supported by strong alignment with two adjacent and leading consumer trends in food as a whole: protein and plant-based. Half of U.S. consumers believe they need more protein in their diet, according to Mintel research on plant-based proteins, and the majority say that protein derived from plant-based sources is inherently healthy. In fact, plant-based protein also signals “clean” to consumers and reassures them that their snack foods provide high-quality nutritional benefits.
The Evolution of Fresh Snacking
We estimate that consumer interest in fresh snacking began in 2005 and during most of its initial development phase, the innovation was driven primarily by smaller brands, experimenting with formats, incorporating whole-food ingredients, and advancing packaging to increase portability and convenience. According to SPINS data, the market began accelerating in 2008, with the percentage of new, fresh-snacking product launches in the U.S. increased by about four times, between 2008 and 2017.
Fresh Snacking in grocery stores paralleled the rise of e-commerce, representing the growth of a “fresh” niche in brick-and-mortar retail; one that the online channel does not currently serve particularly well, due to shipping and cold-supply chain challenges. We anticipate that “fresh” categories will be a bright spot for brick-and-mortar retail as e-commerce continues to erode core-shelf stable categories for grocery retail.
Fresh is Redefining the Retail Environment
In recent years, consumer awareness of the location of higher quality, “fresh” and healthier options within the grocery store has increased. So much so that there is now an expectation that the perimeter of the store is the place for discovery and variety – with a third of shoppers saying they are specifically looking for new foods on the perimeter, while a quarter says the perimeter is where they purchase impulse items.
These purchase-decision areas have grown around the perimeter and are even driving retailers to expand refrigerated cases into the centre of the store; most notably in the pet food and baby food aisles. We anticipate that retail environments will continue to evolve around fresh concepts, with stores expanding their percentage of refrigerated shelf space and the front of store supporting click and collect or home delivery offerings that support refrigeration.
Future Opportunities and Insight from a Category Leader
The trend toward “fresh” is now moving beyond its infancy, which means substantial opportunities lie ahead. For example, chilled desserts that are traditionally positioned around pure indulgence can benefit from embracing “fresh” trends such as low or no preservatives and whole food ingredients to give them a “health halo.”
The incursion of refrigerated products into shelf-stable sections can continue into areas such as meals, baking ingredients and salty snacks. Therefore, opportunities lie ahead for fresh snacking to address the needs of the whole family and mindless-munching occasions, a trend that has been led by brands like Fairlife SuperKids, Crunch Pak, Mini Babybel and CuteCumbers.
One brand that has been a “fresh” pioneer since its inception is San Diego-based Perfect Bar. Founder and CEO Bill Keith talked about the company’s role in the fresh snacking evolution and Mintel’s findings:
“As the original refrigerated protein bar, Perfect Bar was an anchor brand in the fresh snacking set more than a decade ago. Since then, we’ve watched consumers’ adoption of a ‘fresher-is-better’ mindset drive brands to the perimeter of the store and, in turn, shift the retail layout to focus on making the fridge a prominent shopping destination,” said Keith. “We see a huge opportunity ahead in the future of fresh snacking and plan to continue delivering delicious and nutritious products that set the bar for what consumers expect out of the ‘fresh set.'”
David Lockwood founded Mintel Consulting in 2008, helping clients grow their business by putting consumer trends to work.