ORLANDO, FLA. — The burgeoning better-for-you (BFY) macro-snacks market stands at $47 billion globally, growing at a CAGR of 4.2%. By 2030, these figures are expected to jump to $75 billion and a CAGR of 7.6%, according to Trifecta Research.

North America commands the largest share of the BFY snack market at 31.9%, with functional ingredients like fiber, protein and probiotics as well as sustainability claims all driving growth. 

While BFY snacks are an ever-growing opportunity for the category, researching and developing these snacks while satisfying consumer expectations and overcoming an evolving regulatory landscape poses many challenges for producers.

At SNAXPO25, held March 30-April 1 in Orlando, Fla., Alex Tipton, global director of food ingredients, PepsiCo, Purchase, NY; David Lestage, R&D officer for Kellanova, Chicago; and Lori Kelly, regulatory consultant and former PepsiCo regulatory affairs lead, shared how snack makers can navigate these challenges with their BFY offerings. 

Lestage emphasized that reformulating products to reduce or replace certain ingredients with BFY alternatives is never a simple swap.

“Some of these functional replacements bring in the necessity for additional modifiers and stabilizers, and some bring in off-flavors,” he said. “You have to account for that as well. It’s not simple at all.” 

Tipton shared the example of formulating snacks with whole grain corn and the challenges that brings. 

“If you all of a sudden want to switch from a degermed corn product to using whole grain corn, all the good stuff that you’re putting in there nutritionally now is causing all of the organoleptic, process and shelf life issues,” he said. 

While producers want to satisfy consumers’ BFY demands, these snacks still need to taste good, he emphasized. 

“In the end, salty snacks are about enjoyment, and that’s what it’s always going to be about,” he said. “But now it also needs to be about ‘I want my delicious salty snack, but I also want something with functional ingredients.’ ”

Consumers are increasingly seeking snacks personalized to their individual needs, Lestage observed, requiring producers to do more to connect with these shoppers and their specific health and wellness goals. 

“We’re seeing a lot of demand for snacks catering more toward dietary needs, functional benefits and mood states,” he said. “I think over the next several years we’ll see movement of brands from kind of this mass segmentation to a more dynamic, focused personalization of offerings. At the end of the day consumers want to engage more with brands. They want more ownership in what they claim that they eat.”

Lestage added that brands should be leveraging consumption data, loyalty insights and even emerging AI driven trend forecasting to understand not only what BFY snacks consumers are buying, but why they’re buying them. 

“We have many tools out there that can identify consumer trends that are occurring in real time through social media,” he said. “But the next stage of these, which we’re seeing a lot more prevalence of, is now being able to tap into prediction analytics and determine which of those trends is actually going to stick around.”

When it comes to federal regulations of BFY claims, Kelly stressed that regulators aren’t keeping pace with the needs of these snack makers. 

“How do we get new ingredients approved, and how do we get [regulators] to talk about them?” she asked. “It’s very easy to follow the regulations on nutrient claims. You put so much sodium in the product, you get to say it’s low sodium. But you get into the more complex cases of what consumers are wanting, and there are no regulations behind it.”

She continued, “Our government hasn’t’ even started to take a crack at what adaptogens are. There’s no definition, no ‘How do you put it in?’ and ‘How do you stay above board, truthful and transparent to the consumer when you want to put these things into the snack market?’ ”

With this in mind, snack makers must be diligent with the BFY claims they make, Kelly said, offering plenty of substantiation for their claims so that they stand up to regulations when they do come.

While regulations are lacking across certain BFY ingredients, snack manufacturers are adjusting to Food and Drug Administration (FDA) regulations recently put in place and on the horizon. Kelly pointed to the FDA’s new definition of healthy, as well as its proposed rule requiring snack makers to list saturated fat, sodium and added sugar content to the front of packaging and label the amounts as “low,” “medium” or “high.”

She observed that ingredient scrutiny is intensifying at both the federal and state level, even from Republican lawmakers who have traditionally been more lax in this area. 

“Who would have thought West Virginia would be the first state to ban seven artificial colors and preservatives last week?” she said. “That’s new. That’s different. We’ve got bans on key ingredients that are perfectly safe happening at federal and state levels.”

As ingredient bans increase, Kelly said she expects BFY snack producers to get squeezed in the middle.

“How healthy do you have to be?” she asked. “How clean is your label? What ingredients do you still not want to use, even though they’re perfectly legal and safe to use? And then you get to the middle and you try … to make the best tasting snack that consumers will still crave and be able to talk about the benefits.”

The Make America Healthy Again (MAHA) movement championed by the current presidential administration will significantly impact snack makers for the next four years, she predicted. This movement is only amplified by the fact that blue and red states are more aligned on ingredient regulation than in the past.

“Everybody wants to play the game of making Americans healthy again,” she said. “We are not seeing the partisan back and forth that sometimes helps the food industry where you can play a different side. … We all have to giddy-up and get ready for four years of MAHA.”