“The snacking industry is experiencing temporary headwinds following years of significant growth. The pace of normalization is being impacted by financial strain – especially in the middle- and lower-income households. We see a clear bifurcation of consumer behavior with continued growth in premium segments and increased trade down to the value options in the current economic environment,” said Chris Foley, president of Campbell Snacks division.
But, he added, some snack categories are “showing more volume recovery as pricing wraps, suggesting better momentum in the snacking segment” going forward.
For example, pretzels are growing at a five-year compound annual growth rate of 11.3% off a base of $1.8 billion in fiscal 2019, according to Circana data cited by Campbell. Kettle chips, cookies and organic and natural tortilla chips also have between 7.2% and 7.8% five-year CAGR, the company reported.
Premium snacks also are growing well, which bodes well for Campbell, Foley noted. While this may sound counterintuitive given economic pressures prompting some consumers to shop based on price, he explained while value has increased in importance, they drove only 28% of absolute dollar growth in the 52 weeks ending July 28 compared to the prior year. Premium products drove 53% of absolute dollar growth value year-over-year in the same period.
Campbell’s snack portfolio is more heavily weighted to premium, which make up 36% of its snacking branded sales compared to value, which make up only 9%, Foley added.
Value snacks are driving only 28% of absolute dollar growth in the 52 weeks ending July 28 compared to the prior year, while premium products drove 53% of absolute dollar value year-over-year in the same period.
3 major trends drive growth in snacking
Beyond these figures, Foley’s confidence in the space is reinforced by consumer snacking trends with snacking now accounting for half of all eating occasions and with Millennials and Gen Z consumers two to three times more likely to replace meals with snacks.
“There are three major trends driving long-term and sustained growth [within snacking, including,] the blurring of snacks as meals, evolving convenience demands and a significant generational shift in the snacking habits,” Foley explained.
“These are not just fleeting trends. They are macro shifts. And it is this change in eating habits that will continue to reshape the entire snacking landscape,” he added.
Goldfish standout in sea of salty snacks
To capitalize on consumers’ interest in snacking, Campbell has aggressively reshaped its portfolio – divesting several non-core businesses and sharpening its support of what it calls its “leadership brands,” Foley said.
All of Campbell’s eight snack leadership brands hold the No. 1 or No. 2 category position and have positive five-year CAGR growth ranging from 4% to 9%, but Foley noted that Goldfish stands out with an “incredible” story of increased growth, household penetration and innovation to seize market share.
“Goldfish accounts for a quarter of our entire portfolio,” and with a 50% increase in net sales growth between 2019 and 2024 it reached billion dollar brand status, he explained.
“We have transformed this brand from a kid snack to an all family snack. For the fifth year in a row, Goldfish is the No. 1 favorite snack among teens,” according to Piper Sanderl’s Taking Stock with Teens surveys from 2009 to 2024, and all household penetration grew by 1 million households in the past year, he said.
Goldfish’s 3-part playbook for growth
Campbell’s success with Goldfish hinges on three main prongs, the first of which is innovation.
“We are delivering two times the innovation dollars versus our closest competitors. We are creating consumption occasions and attracting new consumers with extensions beyond the core,” including through partnerships with Old Bay, Frank’s Red Hot, Hello Kitty and others, he said.
The brand also is reaching new occasions with the launch of Goldfish Crisps, which Foley characterized as “one of our largest innovation launches in recent history,” and projected it will surpass $75 million in sales this fiscal year.
The second prong is increased awareness with “culturally relevant activations and retail execution,” including through a partnership with a fashion designer who showcased the brand at New York Fashion Week earlier this month. It also plans to boost awareness through its away from home, which increased 13% via food service.
The third prong is expanded distribution beyond the US, which is the brand’s lead market. Canada is the brand’s fastest growing market, where its growth is nearly double that of the total cracker category and where it outpaces competitors, Foley said.
“Our strategy there is two-fold: extend into new occasions and channels mirroring that US successful playbook and age up our consumer base through targeted innovation and communication,” he added.
In Mexico, Foley reported, Campbell will launch Goldfish “in a big way” with both sweet and savory goldfish and a goal of $1.3 billion in net sales by fiscal 2027.
‘We do see a share fight’ coming
While Foley said he is confident in Campbell’s ability to grow its snacking business, he acknowledged “the competition in salty snacks is increasing,” and “we do see a share fight” coming.
To maintain and build share, Campbell will focus on delivering a superior quality experience, continued innovation in new categories, flavors, better-for-you and formats, and by building its value proposition as it expands availability.
Examples of innovation include Campbell’s Pop’ums, which Foley described as “the perfect intersection of pretzel and popcorn,’ and which is available in three flavors. It also launched Snack Factory bites – thin and crunchy pretzels
Within chips, the company continues to launch “bold, unexpected” flavors under its Kettle brand and Late July brand, and make “sophisticated simplicity” available through its Cape Cod offerings, Foley said.
On the sweet side of snacking, Foley said, Campbell is leaning into indulgence and permissibility with innovation under its Pepperidge Farm baked goods, including new white chocolate Milano cookies and new brioche rolls that will help the brand own the holidays, “where moments matter the most,” Foley said.
Based on the strength of its leadership brands and engagement around innovations, Campbell projects annual net sales for its snack business will grow 3-4% in the long term and its operating margin will increase about 17% by fiscal 2027.
