Market research around the opportunity to create more vegetable snacking options to quantify market size (VG14024)

What was it all about?

This project undertook market research to investigate opportunities for creating more vegetable snacking options, including looking at the potential market size for those options.

The five areas of research were: 

• The Australian snack food market
• Australian snack food distribution channels
• International retail snacking range analysis
• Australian consumer snacking behaviour
• Quantification of identified vegetable snack food opportunities.

The researchers’ key findings included: 

• Most Australian households (87 per cent) eat snacks, and the demand is likely to continue.
• The total snack food market has an annual retail value of $9.33b. 
• Most snack foods are processed shelf stable products that are aligned with well supported brands, however, a substantial 40 per cent are viewed as healthy snacks, with fresh fruit contributing over half of these sales. 
• Supermarkets dominate the retail distribution of snacks by a substantial amount over other channels. 
• Processed healthy snack foods will be welcomed by many, if not most, distribution channels.
• The options for fresh or fresh cut snacks are more limited, restricted by distributor and end reseller capacity to handle fresh produce. 
• Apart from the challenges of handling a perishable product, there are substantial barriers to successfully launching a range of vegetable-based snack products into the Australian food market. 
• Based on success in global markets, there are apparent opportunities to introduce cut and peeled mini carrots into the Australian market. 
• There is also an apparent opportunity to add a mixed cut vegetable snacking range, including carrots and celery, to the Australian market. 
• Combining vegetables with fruit, crackers, seasoning or other ingredients is a viable option, albeit with the challenges arising from producing a mixed-ingredient fresh prepack. 
• Small sized whole vegetables, such as tomato and cucumber, are the highest volume fresh vegetable snack foods in Australia. This is a clear signal that the more durable nature of small vegetables in their whole form is an attractive aid to their supply chain handling.
• New processing technologies such as freeze drying and vacuum frying offer potential for new shelf-stable vegetable snack products for the Australian market. 
• Households with children have quite different snacking consumption behaviour, and are more likely to snack on fruit and vegetables than households without children. 
• Healthy snacks are consumed more frequently and dominate morning snacking. 
• Supermarkets are by far the most frequently used outlet to purchase snacks, with convenience stores and other distribution channels primarily catering to infrequent snack buyers. 
• The potential market values of these opportunities range in size from $2.98m to $21.25m. Consumer research indicates they have potential to appeal to shares of consumers from 9 per cent to 37 per cent, spanning the breadth of opportunities from niche market to broad appeal.