Why Americans Are Eating So Many Snacks

with americans stuck at home snack food has become a valuable commodity for the pandemic stress consumer frito-lay a subsidiary of pepsico and one of the largest snack food makers has seen sales surge the company produces over 1200 different snacks including brands like cheetos doritos lays smart food and ruffles in early 2021 frito-lay north america announced 2020 fourth quarter net revenue of 5.4 billion dollars a 5 increase from a year earlier from a product perspective variety seems to be uh very important um people are seeking more snacks they're snacking 40 percent more right now than pre-pandemic the snacking industry uh you know was kind of growing low to mid single digits humming light right along and then the pandemic just gave it this explosive growth with the stay at home trends and it's not just free delay it is seeing a boom in its snack business north american sales of savory snacks like chips popcorn and pretzels climbed to 56.9 billion dollars in 2020 11 more than 2019 in stressful times people turn to snacking for comfort and kopit 19 has transformed kitchens across the u.s into giant vending machines so has coveted 19 put an end to the shift to healthier snacks [Music] frito-lay got its start in the midst of the great depression in 1932. for a hundred dollars charles elmer doolin purchased a recipe a handheld potato ricer and over a dozen retail accounts from a corn chip manufacturer selling corn chips out of his car by day and cooking out of his mother's kitchen by night doolan soon expanded to the family's garage and later to the west coast he named the business the frito company that same year hermann lay started a snack food delivery company in nashville tennessee by 1956 lay had more than 1 000 employees and was the largest manufacturer of potato chips and snack foods in the u.s the two men joined forces in 1961 to form the frida lake company and quickly made plans to expand even further in 1965 friday merged with pepsicola to form pepsico combining the soft drink giant with a salty snack maker the union made lays the first nationwide potato chip brand by 2008 friday had a 57 share of the u.s potato chip market the company kept busy churning out new recipes in 1966 friday launched doritos tortilla chips in 1981 the tostitos brand and in 1992 it added flamin hot flavoring to the menu well this is in fact the number one product in spicy snacking for full stop flaming hot as a flavor and americans were consuming snacks like never before from the late 70s through the late 2000s the number of people who had at least one snack a day in the us surged from 59 percent to 90 and the amount of snacks they consumed doubled free delay relies on a mix of clever marketing schemes social media influencers and celebrities in 2019 the company enlisted chance the rapper and the backstreet boys a 2020 advert starred hip-hop artist post malone we have uh we have brands that are really about entertainment and and actually enjoyment um in in the case of doritos and that's what we've leaned into we want to make sure that we take a moment to remind people that it's it's great uh to smile and have a little bit of levity in in life and since the start of the pandemic frito-lay has made moves out of the grocery store aisle as well in may 2020 pepsico launched snacks.com for consumers to purchase items directly from the company the beauty of this company and certainly at a healthy category is we own the value chain seed to shelf and so i think you know the the backs of what this company was built on from making product moving products selling product owning that value chain seed to shelf allows for so much flexibility and agility that you know not just in a pandemic but over the last 10 years has allowed us to be pretty nimble [Music] according to a 2020 study by mondelez international about 90 percent of adults surveyed said coven 19 has enticed them to snack more about 60 percent of people said snacking will be their new normal after the pandemic ends that trend has added a boost to the bottom line of most of the biggest makers of snacks including hostess brands hershey kellogg company mondelez international nestle and of course free delay sales of snacks in north america reached 133 billion dollars in 2020 seven percent higher than a year earlier with americans turning to their kitchen pantries for relief hostess the maker of twinkies and ding dongs saw a net revenue surge 15 in 2020 to 1 billion dollars due in part to the strong performance of its vortman cookies and hostess brands in the morning in the afternoon and at night and you're exactly right 97 90 brand awareness and consumers love us snacking trends and indulgence snacking both in the morning afternoon we're on trend before covet and it's just accelerated the in-home behavior prior to the start of backyard barbecue season and summer camping trips hershey saw a surge in the sale of milk chocolate packs used to make s'mores kellogg's north american snacks division which includes pringles and cheez-it had organic growth of 3.3 percent in 2020 in sales of 4.4 billion dollars mondelez international maker of oreo cookies and ritz crackers saw net revenue increase by 2.8 percent to 26.5 billion dollars in 2020. with a drop in demand for impulse purchases at the checkout counter nestle the maker of kitkat saw weaker demand in its chocolate division offset by some momentum in the sale of baking products but it may have been free to lay that's all the biggest gains with families stuck at home binging on netflix and snacking on potato chips and popcorn frito-lay north america had 20 20 net revenue of 18 billion 6.5 percent higher than a year earlier we really delivered strong growth in the fourth quarter 5.7 percent was a terrific number uh the snack food business for five and a half the beverage business actually grew a little bit faster about six our big brand our biggest brand like lay's potato chips continues to do very well tostitos is a brand that has probably accelerated more than most and i think it's this nature of people um having small gatherings there's less big parties pepsico ceo ramon laguarta said in a fourth quarter 2020 earnings call that while its snacks business lost a slice of its high profit away from home sales the category saw an increase in both at-home consumption and multi-pack snacks the company also strengthened its place at the top of the savory snacks category with new product launches including limited edition lays flavors like pimento cheese and new england lobster roll according to a study published in the journal obesity while some people have spent the pandemic at home munching on fruits vegetables and healthy snacks the majority of us were binging on a steady diet of chips chocolate and cookies so about a quarter of people say that their snacking has increased during the pandemic but it's been really healthy snacking whereas about almost 50 percent of people report an increase in unhealthy snacking prior to the pandemic u.s adults on average received about 24 of their daily calories through snacks one in six americans was getting about forty percent of their daily calories from snacks so are those in between meals causing americans to put on more weight according to one analyst research looking into a direct link between obesity and snacking has so far come up with mixed results what is it that people are snacking on if somebody is snacking on vegetables it's unlikely to have an effect on on their weight but if somebody is consuming um excess calories from sugar sweetened beverages from alcohol from these savory snacks that tend to be very high in calories but low in nutrients like chips and crackers and cookies things like that it could potentially contribute if done excessively over time frito-lay has faced its share of criticism according to 2012 media reports its widely popular flamin hot cheetos brand was banned from schools in california new mexico and illinois citing nutritional concerns a one ounce serving of flamin hot cheetos at the time had 160 calories 11 grams of fat in 10 of the day's recommended intake of sodium under pressure to do its part to help reverse trends in obesity and appeal to health-conscious consumers in 2002 frida lay began work to eliminate trans fats in 2010 frida lay's north american division said that about fifty percent of its products would be made with all natural ingredients we've taken our core businesses and we've pivoted them into more permissible snacking spaces so we've got a simply line that is lays simply tostitos simply that is um healthier alternatives or cleaner ingredients in some cases and people may want different choices we've also though acquired companies like bear snacks or bfy with pop corners which you know again healthier alternatives to snacking very high growth spaces in addition to its cheese flavor popcorn line smart food and its multi-grain sun chips in 2021 pepsico also announced a joint venture with beyond meat to produce snacks made from plant-based protein these are going to be delicious they're going to be healthy and they're going to be plant-based that's all i'm ready to talk about right now whatever form they take analysts say healthy snacks will become an even bigger part of our diet as more americans continue to move away from the traditional three meals a day during the pandemic there was this gravitation toward comfort foods um you know people not everyone has put on the you know coveted 10 or 15 pounds it seems like and so um you know people not as concerned about eating healthy but we think that you know that starts to change in in 2021 with the economy reopening [Music] gradually [Music] you

Channel: CNBC

Views: 600,078

Rating: 4.8019233 out of 5

Keywords: CNBC, business, news, finance stock, stock market, news channel, news station, breaking news, us news, world news, cable, cable news, finance news, money, money tips, financial news, Stock market news, stocks, snacks, quarantine, pandemic, covid-19, chips, popcorn, and pretzels, quarantine snacks, healthy snacks, junk food, cheetos, dorritos, lays, ruffles, snack industry, snack earnings, stay at home

Id: PzImyUnLoOY

Length: 10min 24sec (624 seconds)

Published: Sat Apr 03 2021