The Total Addressable Market (TAM) for Extruded Snacks was valued at USD 54.15 billion in 2022. It is projected to reach USD 77.74 billion by 2031, growing at a CAGR of 4.1% during the forecast period (2023-2031).
The global extruded snacks market is projected to witness significant growth during the forecast period on account of changing customer lifestyles and rising demand for packaged foods, such as ready-to-eat food products. The shift in customer preference is largely driven by increasing purchasing power, rapid product launches, and rising health consciousness. In line with this, the market players are introducing healthy snacks for weight loss, with maximum vitamin and mineral content. The growing population and migration in emerging economies provide an impetus to market growth. Extruded products are gaining popularity among consumers due to their savory flavor profiles and unique shapes. Because of consumers' rising demand for on-the-go products, snacking has become one of the fastest-growing industry trends. During the forecast period, the emerging trend of nutrient-dense snacking is anticipated to deliver massive opportunities and innovations across industries.
Shifting consumer preference towards cereals as wholesome breakfasts, especially in developing economies, drives the market growth. In Asia-Pacific, Kellogg's generated about USD 26 million of revenue in the first quarter of 2018, up by 13% from USD 23 million in 2017. At the same time, the net sales of the company increased by 11% in 2018, which is about USD 252 million. In the last few years, the demand for healthy snacks has been witnessing a considerable surge, compelling the market players to develop protein and fiber-rich snacks. For instance, Naturell launched a seven-grain protein snack in India made from oats, wheat, soy, ragi, gram, corn, and rice, containing three times more protein and three times less fat than traditional snacks. The puffed and extruded snacks have better nutritional value as they consist of around 120 calories per serving, while the oil-laden snacks consist of more than 150 calories per serving. Additionally, the protein and vitamin content in the extruded snacks can be altered by changing the capacity of raw materials, further encouraging the players to develop healthy snack products.
Globally, the fast-paced life and busy work schedule, specifically in the urban areas, drives the demand for packaged food that requires less cooking time and is easy to make. Rising per capita income and the increasing millennial population are subsequently driving the demand for new product launches. In line with this, the leading players are adopting aggressive marketing strategies to gain a customer base and sustain in the raging competition.
The difficulties processors encounter as they transform raw materials into finished goods hinder the market. Due to the absence of these crucial ingredients, which give the finished product its flavor, texture, and binding properties, products like sugar-free, additive-free, and reduced-fat or fat-free healthy snacks experience various processing-related difficulties. When purchasing a snack, consumers pay close attention to the product's texture and crispiness. Thus, the difficulty in processing can slow down the market growth.
The rapidly changing snack market has created new opportunities for producers to develop cutting-edge processing & preservation techniques and modern product lines. Reduced fat, wholegrain, and preservative-free snacking options are processed more efficiently thanks to the growing demand for healthier products. The extruded category has gained popularity, and the market is observing a number of distinct trends. Currently, a larger segment of the consumer population is looking for tastier, healthier alternatives. Nowadays, consumers are more concerned with the nutrition facts on snack packets and look for clean labels, such as those that state a product is gluten-free, non-GMO, vegan, or allergen-free. Additionally, consumers seek out foods that are high in protein and fiber, which presents enormous opportunities for producers to add novel flavors and shapes to their product line.
The global extruded snacks market is segmented by raw materials and distribution channels.
Based on raw material, the global market is bifurcated into wheat, potato, rice, tapioca, and multi-grain.
The potato-based segment is the highest contributor to the market and is expected to grow at a healthy CAGR during the forecast period. Large consumption of potato-based extruded products, such as chips and pallet snacks, is expected to help it maintain its lead throughout the forecast period. The United States Census Bureau reports that about 60% of the potatoes grown in the country are sold as chips, French fries, dehydrated potato snacks, and other potato-related goods. Over the forecast period, these trends are predicted to increase demand for potato-based extruded snacks.
The tapioca segment is expected to witness a higher CAGR due to the young generation's growing demand for wholesome snacks all over the world. Due to its high nutritional value, tapioca is widely consumed in Latin America, Africa, and Asia in a variety of forms. Over the forecast period, it is anticipated that these consumer trends will create new markets for tapioca-based extruded snacks.
Based on distribution channels, the global market is bifurcated into supermarkets/hypermarkets, convenience stores, specialty stores, and e-commerce.
The supermarkets/hypermarkets segment is the highest contributor to the market and is expected to grow at a healthy CAGR during the forecast period on account of its widespread availability across the globe. Walmart Inc., a multinational retail corporation, has established a robust hypermarket chain in more than 11,088 locations across 27 countries. The availability of several options has compelled customers to purchase extruded snacks from supermarkets. The in-store marketing through displays and the right placing of the product to increase impulsive buying of snacks drives the segment growth. This distribution channel is being driven by rising consumer preferences for healthy snacks with a broad range of flavors and a long shelf life. Additionally, the demand for extruded food products through this distribution channel is expected to increase over the forecast period as a result of the presence of large grocery store chains and hypermarkets with a large customer base, including Walmart, Target, 7Eleven, SPAR, Aldi, Carrefour, and Lidl.
The e-commerce segment is expected to grow at a significant rate. Online shopping's expansion is credited to its simple, comfortable, and practical accessibility, as well as doorstep delivery. The range of online sales is growing as smartphones are increasingly popular and the internet's global reach increases. Additionally, due to changing consumer preferences, online behemoths like Amazon Prime Pantry, Yihaodian, Godrej Nature's Basket, Alibaba, Tesco.com, Walmart, and Honestbee are aggressively expanding. This is anticipated to drive extruded snack sales through e-commerce in the upcoming years.
The global extruded snacks market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
Asia Pacific region is the highest contributor to the market and is expected to grow at a healthy CAGR during the forecast period. Availability of snacks at affordable prices, the presence of umpteen local vendors, and rising spending power drive the regional market growth. India's extruded snacks market is projected to grow at a faster rate on account of increasing investments by prominent players to develop new products in order to increase the customer base. In 2018, PepsiCo secured the largest revenue from the APAC region, and the company is expecting higher sales in the coming years. The below-mentioned info-graph depicts the estimated market potential across the globe. The extruded snacks market is largely driven by the rising adoption of western culture and debouching trends among the millennial population. Consumers in the region are price-sensitive and prefer affordable snacks due to changing economic conditions. Moreover, the rising presence of hypermarkets and supermarkets in the region, offering low-priced products, drives the regional market growth.
North America is expected to witness dynamic growth in the global market during the forecast period. The rising consumer income of the individuals in the region is a positive indicator as the consumers are able to spend beyond the necessities, thus making way for extruded snacks. Moreover, the shifting preference of consumers towards healthy snacking and the trend for clean-label and non-GMO snacks are supporting regional market growth. The consumers present in the region are health conscious and are increasingly concerned about the health benefits associated with the products. Health-conscious consumers are significantly influencing the advancements and innovations in the North American extruded snacks market. The U.S. Snack Index survey data represents that many American consumers wish to try new snacks and prefer variety and convenience, particularly during the outbreak of the coronavirus pandemic. The major players in the market have an extensive distribution channel in the region which has strengthened the market growth. During the global pandemic, the Frito-Lay company launched a website for directly serving its customers who are facing problems locating their favorite snacks. Companies are changing strategies and will continue to do so to address the increasing consumer needs. These factors are considerably contributing to the growth of the extruded snacks market in the region.
Europe is expected to witness significant growth in the extruded snacks market during the forecast period. The demand for extruded snacks is being driven by social snacking in Europe as well as on-the-go or general snacking. Additionally, consumers are gradually reorienting themselves toward healthier alternatives like wheat and cereal snacks. While Germany is one of the markets for organic and natural healthy foods that is expanding the fastest, consumers there are more interested in the products' health benefits. Along with pulse flours, seeds, and naturally processed grains, wholegrain wheat, and other cereals are becoming more popular as snack foods.
The LAMEA region is expected to witness moderate growth in the global market during the forecast period. Because of the introduction of numerous nutrient-dense extruded snacks, consumers in the LAMEA region seem to be more aware of the health benefits of extruded snacks. These include snacks with low sugar and fat content and organic, non-GMO, and gluten-free options. These factors are further boosting the market growth in the region.
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