Growing PH snack market in Asia Pacific

‘PHL snack food market will continue to grow’

BusinessMirror
April 29, 2024

The Philippines’s snack food market will outpace its peers in Asia Pacific, according to a Global Agricultural Information Network (Gain) report.

The Gain report said the local snack food market will experience “robust growth” at a compound annual growth rate of 8 percent through 2028, double the growth rate of the Asia Pacific region. 

“The Philippine snack food market, including both local and imported products, reached an estimated retail value of $2.6 billion in 2023,” the report read.

“Savory snacks dominated the market accounting for 70 percent of total sales and outselling sweet snacks.”

Among individual products, the Gain report noted that potato chips were the most widely consumed, followed by savory biscuits, nuts and seeds, filled biscuits, and puffed snacks. Collectively, these five product categories captured 75 percent of the entire snack market.

It added that established local companies hold an estimated 85 percent share, dominating the Philippine snack food market. Key players include Leslie, Monde Nissin, Republic Biscuit, and Universal Robina. 

As for imports, the Philippines purchased $380 million worth of snack foods from other countries in 2023. Baked snacks constituted the largest share (70 percent), followed by dried fruit, nuts, and seeds (15 percent), potato chips (12 percent), and popcorn (3 percent). 

“Despite regional competitors benefiting from zero-tariff trade agreements, more than 20 percent of these imports originated from the United States.”

Of the products imported by the Philippines last year, backed snacks topped the list at $265 million. Baked snacks include crackers and biscuits, cookies, and wafers. 

While the US was the fourth-largest supplier of the Philippines, the Gain report noted that 80 percent of baked snacks came from regional sources like Japan and South Korea, which benefit from zero-tariff trade agreements. 

Dried fruits, nuts, and seeds imports for use as snack foods totaled $57 million, with the US holding the top supplier position and capturing a 45-percent market share.

“Despite facing stiff competition from regional players, the United States dominated certain product categories like raisins and organic offerings (almonds, cranberries, dates, pumpkin seeds).”

The Gain report also said the Philippines saw its potato chip imports surge 42 percent year-on-year to nearly $40 million. Fueled by strong consumer demand, the import value growth was accompanied by a 30-percent increase in import volume.

The US dominated the imported potato chip market, capturing a commanding 65 percent share. 

“This success can be largely attributed to the established reputation of American brands like Frito-Lay and Pringles. PRC/Hong Kong/Taiwan (20 percent) and Malaysia (10 percent) follow, driven by Frito-Lay and Pringles, respectively.”

Retailers attribute the strong consumer preference for US-made Frito-Lay and Pringles potato chips to perceived differences in taste and texture, despite the price advantage offered by regional alternatives due to lower shipping costs and zero tariffs, according to the report.

The report also noted that upper and upper-middle income classes are the primary consumers of imported snack foods. Accustomed to consuming three regular meals daily, these consumers also engage in two to three snacking episodes.

“Consequently, they seek diverse snack options. While seeking value for money, they exhibit a willingness to pay a premium for high-quality products and demonstrate openness to exploring novel flavors and experiences.”

The Gain report was prepared by the Foreign Agricultural Service of the US Department of Agriculture in Manila.