Snacking Instead of Three Meals a Day... New Eating Habits of American MZ Generation

Last Year's Snack Sales Increased by 11%
MZ Generation Snacking Instead of Meals Due to Busy Lives
Impact of COVID-19 and Increased Video Gaming
Snack Market Up 9.5% This Year... "Everything Becoming Snackified"

As Americans enthusiastically indulge in sweets and snacks, confectionery companies are experiencing an unexpected boom. Despite concerns over corporate earnings slowdown amid forecasts of a U.S. economic recession this year, the confectionery industry is enjoying soaring performance and stock prices, driven by strong demand for snack foods.

Half of Americans Snack More Than 3 Times a Day... Snack Sales Increased 11% Last Year

On the 15th (local time), the Wall Street Journal (WSJ) reported, citing market research firm Sucana Group, that U.S. snack sales reached $181 billion last year, an 11% increase compared to the previous year.

Half of Americans snack more than three times a day on average, leading to the rise in snack sales. This marks an 8% increase over the past two years.

Looking at companies, U.S. chocolate manufacturer Hershey's sales increased by 30% last year compared to the 2019 fiscal year three years ago. Confectionery companies Mondelez, well known for Oreo cookies, and Hostess, maker of Twinkies, often called the American chocolate pie, saw their sales grow by 22% and 50%, respectively, during the same period.

Boosted by improved performance, confectionery company stocks also surged. Hershey's stock price jumped 21% this year, driven by increased snack consumption, far outperforming the S&P Food & Beverage Index's 4% rise. Mondelez and Hostess stocks also rose 18% each during the same period, surpassing the industry average.

MZ Generation Replaces Meals with Snacks Due to Busy Lives... COVID-19 and Video Game Increase Also Contribute

What is behind Americans' obsession with snacking as if they were having three square meals a day?

First, analysis suggests that the MZ generation is increasing snack consumption instead of meals due to their busy lifestyles. The MZ generation, born between the 1980s and early 2000s and currently in their teens to early 40s, is estimated to consume over 10% more snacks than other age groups. Nick Graham, Global Head of Mondelez, diagnosed that this generation "has a busier lifestyle than other generations, leading to increased snack consumption." More people are replacing breakfast or lunch with snacks.

Joe Benhuz, a doctor working at a children's hospital in Cincinnati, Ohio, said, "Due to a tight schedule, I have been eating more snacks over the past 5 to 6 years," adding, "Instead of having three full meals a day, I eat small amounts of crackers, carrots, celery, and plan to have Cheetos on Friday."

Andrea Hernandez, author of Snacks Shot, noted, "Millennials often heard negative remarks from their parents, such as 'Don't ruin your meal by eating snacks,'" pointing out that "paradoxically, this led them to replace meals entirely with snacks."

Additionally, the COVID-19 pandemic, which reduced face-to-face activities, also played a role. Amber Murai, Vice President of Strategy at Hershey, analyzed, "Snacks have long been a part of American consumers' lives, but consumption significantly increased during the pandemic," explaining, "People increased demand for snacks like popcorn and candy while watching movies with family or engaging in group activities at night." The rise in video gaming is also cited as a cause for increased snack consumption.

Snack Market to Grow 9.5% This Year... "The 'Snack-ification' of Everything Is Coming"

Americans' love for snacking is expected to continue. Sucana forecasts that snack sales in the U.S. market will grow between 7% and 9.5% this year, surpassing the overall food and beverage market sales forecast of 5.5%.

Companies are optimistic about their earnings outlook. Hershey and Mondelez expect double-digit increases in sales and profits compared to a year ago. Hostess also projects a 4-6% sales increase this year.

Accordingly, existing food companies are rushing into the snack market. U.S. food manufacturer Campbell Soup introduced a low-fat Kettle brand potato chip in February. Previously, they expanded the marketing scope of snacks, which were targeted at children, to adults. The snack segment accounted for 46% of Campbell Soup's sales last year, growing faster than the food and beverage sector and emerging as a new cash cow.

U.S. food company Kellogg is also spinning off its North American cereal division and doubling the size of its snack segment. In 2020, it launched some cereals as large-sized snacks. Hernandez predicted, "We will see the 'snack-ification' of everything."

The WSJ analyzed, "The snack-ification of the American diet has confectionery giants salivating," adding, "As American consumers enthusiastically embrace snacks and other food companies compete to expand their snack market share, confectionery companies are enjoying a boom."