Snack-Food Industry – Driving Factors Essay

698 Words Oct 22nd, 2013 3 Pages
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Snack-Food Industry – Driving factors

The snack food industry benefited from increased demand for several of the industry’s products during the past five years in line with rising household disposable income. In addition the industry has a moderate level of market share concentration. The top four players are accounting 43% of revenue. This revenue depends on numerous reasons and factors. One are the changing eating habits due to less frequent restaurant dining and hurried lifestyles that encourage on-the-go eating and a growing tendency to replace meals with common smaller snacks. Companies and businesses combat the raising obesity by developing healthier snack foods that still taste appealing. The boundaries between meals and
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Based on a study conducted in 2011, GIA announced a forecast in the US snack food market to reach $334 billion by the year 2015 (“Global Snack Food Market”, 2011). Obviously, snack food manufacturers are required to research the market and their customer so they can innovate proactive marketing.

Firms in other Industries offering substitute products strong - risk for snack food producers in the form of sandwiches, fruits or delis that are produced by other companies in the nutrition field - local businesses and grocery stores might have special offers for their products, which might compete the snacks - can have an impact on the selling price indirectly for the producers to orientate themselves

Suppliers strong - pressure by bargaining and supplier-seller collaboration / contract - if suppliers provide raw material including key ingredients such as oil, sugar and wheat they can increase prices that would have an impact on the manufacturing prices of the producers - can influence the availability of material negatively

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Rivalry among Competing Sellers strong striving for a better market position competitive advantage for producing new products that are low in fat and calories pressure comes from the threat of entry of new rivals snack foods manufacturing industry generates about $300 billion in revenue with 4.3% annual growth between 2006-2011 market for snack is relatively large and expanding US

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