The global organic snack food market is expected to grow from US$ 10.81 billion in 2020 to US$ 12.41 billion in 2021 at a compound annual growth rate (CAGR) of 14.8%.
According to a recent report by ResearchAndMarkets.com, the growth is mainly due to the companies resuming their operations and adapting to the new normal while recovering from the Covid-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach US$ 20.53 billion in 2025 at a CAGR of 13%.
Major players in the organic snack food market are Sprout Organics, My Super Foods, Clif Bar & Company, Annie’s Homegrown Inc, NurturMe, Navitas Organics, YummyEarth, Inc., Utz Quality Food, LLC, Eat Real and Creative Snacks Co.
Organic snack food contains healthy nutrients and ingredients such as minerals, proteins, and vitamins. For example, nutritious and gluten-free items which include tortilla chips, corn chips, potato chips, chocolates, raisins, bagel, pretzels, cookies, and pancakes, made from organic ingredients are termed as organic snack food.
The growth in spending capacity of the end users coupled with the growing health consciousness and rising consumption of organic foods by the populace owing to harmful side effects of conventional snacks including increasing calorie content, increasing obesity, and less nutritional benefits is driving the market. Moreover, the increasing spending capacity of people, especially in developing countries including India and China is contributing to higher demand for organic snack food manufacturing over the forecast period. According to the Trading Economics, consumer spending in India increased to Rs 17962.90 billion in the third quarter of 2020 from Rs 14611.64 billion in the second quarter of 2020. Therefore, increasing consumer spending is predicted to generate higher demand for organic snack food in the coming years.
Challenges to growth
The high cost of production is anticipated to hinder the growth of the organic snack food manufacturing market. The organic certification, cost of fertiliser for organic crops, and post-harvest handling costs are comparatively higher than that of conventional snack items, which in turn increases the price of organic snack food. This scenario is likely to hinder the demand for organic snack food in the forthcoming years.
Many food manufacturers are making new and healthy snack launches by reducing the use of artificial colours and increasingly using natural ingredients in order to meet the consumer requirements for healthier and natural ingredients. For instance, more than 11 food companies including Chipotle, Kraft, Taco Bell, Pizza Hut, Subway, and others removed the usage of artificial colours and flavours in 2018. Moreover, government bans on artificial flavours are a major opportunity for organic snack food manufacturers for future expansion.
According to the U.S. Food & Drug Administration, the FDA removed six of the ingredients from FDA’s approved list, which included ethyl acrylate, benzophenone, myrcene, pulegone, eugenyl methyl ether, and pyridine. This scenario is predicted to boost the demand for the organic snack food market during the forecast period (2019 to 2023).
