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Description

Description

"The chip category is in the midst of a decade of steadily growing sales, which should near $17 billion by 2024. Nevertheless, the category faces challenges: increased snacking among consumers has boosted the category, certainly, but it has also led to a rise in competitors, particularly options which promise a healthier solution. While consumers still seek taste, growing interest in chips that incorporate healthier ingredients and cooking methods and embrace more natural claims should be on brand radars. At the same time, those consumers are as motivated by familiar flavors as they are by the hottest flavor trends of the day. "

William Roberts, Jr, Senior Food & Drink Analyst

This report will look at the following areas:

  • Low interest in new chips
  • Consumers, particularly parents, perceive lack of healthy chip options
  • Premium options face a price threshold

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Top takeaways
          • Market overview
            • Figure 1: Total US retail sales of potato and tortilla chips, by segment, at current prices, with percent change in parentheses, 2017 and 2019
          • The issues
            • Low interest in new chips
              • Figure 2: Interest in new chips, by gender, by age, November 2019
            • Consumers, particularly parents, perceive lack of healthy chip options
              • Figure 3: Interest in healthy chips, any agree, by parental status, November 2019
            • Premium options face a price threshold
              • Figure 4: Price as a chip purchase factor, by household income, November 2019
            • The opportunities
              • Embracing nostalgia even of recent eras
                • Figure 5: Chip preferences, any agree, by age, November 2019
              • Healthier, if not healthy per se
                • Figure 6: Interest in healthy chips, by age, November 2019
              • Parents seek packaging improvements
                • Figure 7: Improvements in chip packaging, any agree, by parental status, November 2019
            • The Market – What You Need to Know

              • Strong chip sales growth to continue
                • Growth largely driven by tortilla chips
                  • Healthy snacker could necessitate healthy innovation
                    • Health messaging to distinguish chips
                    • Market Size and Forecast

                      • $15 billion chip market to continue growth
                        • Figure 8: Total US sales and fan chart forecast of potato and tortilla chips, at current prices, 2014-24
                        • Figure 9: Total US sales and forecast of potato and tortilla chips, at current prices, 2014-24
                    • Market Breakdown

                      • Tortilla chips drive majority of chip sales growth
                        • Figure 10: Total US retail sales and forecast of potato and tortilla chips, in millions, by segment, with % change from year prior in parentheses, 2014-24
                        • Figure 11: Total US retail sales and forecast of potato and tortilla chips, by segment, at current prices, 2014-24
                      • Changing channels for chips
                        • Figure 12: Total US retail sales of potato and tortilla chips, by channel, in millions, at current prices, 2014-19
                    • Market Perspective

                      • It’s a competitive market for the growing healthy snacker base
                        • Figure 13: Interest in chip innovations, November 2019
                    • Market Factors

                      • Changing definition of health can be difficult from brands to navigate
                        • Aging population likely to snack more, but not on potato/tortilla chips
                          • Figure 14: US population by age, 2013-23
                      • Key Players – What You Need to Know

                        • Rising sales for all major brands
                          • Chip flavor innovation gains heat
                            • Natural chips fall short of other snacks
                              • Expanding flavors beyond simply hot
                              • Company and Brand Sales of Potato and Tortilla Chips

                                • Legacy chip brands faring well among chip sales
                                  • Sales growth permeates major companies
                                    • Figure 15: Multi-outlet sales of potato and tortilla chips, by company, 2018-19
                                • What’s Working

                                  • Imaginative and hotter flavors driving chip innovation
                                    • Figure 16: Leading chip purchase factors, by gender, by age, November 2019
                                  • Success with healthier, if not healthy
                                    • Single serve + product integrity = classic portability
                                    • What’s Struggling

                                      • Lack of NPD negatively impacting Santitas’ tortilla chips
                                        • Figure 17: Sales of PepsiCo’s Santitas tortilla chips, in millions, 2018-19
                                      • Natural claims notably less among potato/tortilla chip launches
                                        • Figure 18: Chip/puff snack launches in the US, by claim category, 2018-19
                                        • Figure 19: Consumer attribute ratings, natural potato snack launches versus potato snack launches overall, 2017-19
                                        • Figure 20: Consumer attribute ratings, natural potato snack launches versus all potato snack launches, 2017-19
                                    • What to Watch

                                      • BFY in a category driven by convenience and flavor
                                        • Figure 21: Interest in chip innovations, November 2019
                                      • International flavors leveraging interest in adventurous experiences
                                      • The Consumer – What You Need to Know

                                        • Chips consumed by virtually all consumers
                                          • Young men consume chips often
                                            • Price plays a leading role, followed by familiar flavors and brand
                                              • Familiarity leading to consistency
                                                • Healthy evolution
                                                  • National brands could face store-brand onslaught
                                                    • Moms notably interested in packaging improvements
                                                      • Chips resonate most strongly with Adventure Eaters
                                                      • Chip Consumption

                                                        • Just 5% of consumers abstain from chips
                                                          • Figure 22: Types of chips consumed, November 2019
                                                        • Young adults reach for flavored varieties
                                                          • Figure 23: Types of chips consumed, by age, November 2019
                                                        • Chip diversity appealing to parents
                                                          • Figure 24: Chips consumed, by parental status, November 2019
                                                        • Hispanic Millennials a rich target for chip NPD
                                                          • Figure 25: Chips consumed, by Hispanic origin, by generation, November 2019
                                                      • Potato and Tortilla Chip Consumption Frequency

                                                        • Health halo drives popped chips to frequent consumption
                                                          • Figure 26: Frequency of chip consumption, November 2019
                                                        • Young men turning to virtually all chips frequently
                                                          • Figure 27: Frequency of chip consumption – weekly or more often, by gender, by age, November 2019
                                                        • Hispanics overindex in consuming all chips regularly
                                                          • Figure 28: Frequency of chip consumption – weekly or more often, by Hispanic origin, November 2019
                                                      • Chip Purchase Factors

                                                        • Price a key driver, followed closely by the familiar
                                                          • Figure 29: Chip purchase factors, November 2019
                                                        • Flavor, familiar or new, is a strong draw for young men
                                                          • Figure 30: Leading chip purchase factors, by gender, by age, November 2019
                                                        • Parents turning to natural rather than free-from claims
                                                          • Figure 31: Health and natural chip purchase factors, by parental status, by gender, November 2019
                                                      • Chip Purchase Behaviors

                                                        • Familiarity leading to consistent purchase behaviors
                                                          • Figure 32: Chip purchase behaviors, November 2019
                                                        • Relative lack of interest in new chip types
                                                          • Figure 33: Chip purchase behaviors, by gender, by age, November 2019
                                                        • Parents much more likely to seek new chip options
                                                          • Figure 34: Chip purchase behaviors, by parental status, November 2019
                                                        • Familiar flavors influence even impulse purchase
                                                          • Figure 35: Chip behaviors – CHAID – Tree output, November 2019
                                                      • Interest in Chip Innovation

                                                        • Healthy chips evolve to embrace positives
                                                          • Figure 36: Interest in chip innovations, November 2019
                                                        • Seasonal flavors appeal to a largely untapped market
                                                          • Figure 37: Interest in chip innovations, by gender, by age, November 2019
                                                        • Hot and sweet hold considerable appeal among Black consumers
                                                          • Figure 38: Interest in chip flavor innovation, by race, November 2019
                                                      • Chip Attitudes

                                                        • Freshness concerns highlight chip attitudes
                                                          • Figure 39: Chip attitudes, November 2019
                                                        • Nostalgia for not so long ago
                                                          • Figure 40: Chip preferences, any agree, by age, November 2019
                                                        • Ingredients role in parental perceptions of health
                                                          • Figure 41: Health's role in chip behaviors, any agree, by parental status, November 2019
                                                        • Potential for store brand encroachment
                                                          • Figure 42: Opinions of chip brands, any agree, by age, November 2019
                                                      • New Chip Purchase Drivers

                                                        • Mix contemporary and traditional word of mouth tactics to build
                                                          • Figure 43: New chip purchase drivers, November 2019
                                                        • Maintaining freshness appeals strongly to mothers
                                                          • Figure 44: New chip purchase drivers, by gender, by parental status, November 2019
                                                        • Merge the familiar with modern notions of healthy
                                                          • Figure 45: TURF analysis – new chip purchase drivers, November 2019
                                                      • Potato and Tortilla Chips by Food/Drink Consumer Segmentation

                                                            • Figure 46: Food/drink consumer segmentation of potato and tortilla chips, September 2019
                                                          • Adventure Eaters most engaged with chips and their brands
                                                            • Figure 47: Opinions of chip brands, any agree, by food/drink consumer segmentation, November 2019
                                                          • Quality Seekers prove problematic for chips
                                                            • Figure 48: New chip purchase drivers, by food/drink consumer segmentation, November 2019
                                                          • In-store sampling to reach Time Savers
                                                            • Figure 49: Chip purchase behaviors, by food/drink consumer segmentation, November 2019
                                                          • Value Chasers most likely to purchase on impulse
                                                            • Figure 50: Impulse purchase behavior, by food/drink consumer segmentation, November 2019
                                                        • Appendix – Data Sources and Abbreviations

                                                          • Data sources
                                                            • Sales data
                                                              • Fan chart forecast
                                                                • Consumer survey data
                                                                  • Abbreviations
                                                                    • Abbreviations
                                                                    • Appendix – The Market

                                                                        • Figure 51: Total US retail sales and forecast of potato and tortilla chips, at inflation-adjusted prices, 2014-24
                                                                        • Figure 52: Total US retail sales of potato and tortilla chips, by segment, at current prices, 2017 and 2019
                                                                        • Figure 53: Total US retail sales and forecast of potato chips, at current prices, 2014-24
                                                                        • Figure 54: Total US retail sales and forecast of potato chips, at inflation-adjusted prices, 2014-24
                                                                        • Figure 55: Total US retail sales and forecast of tortilla chips, at current prices, 2014-24
                                                                        • Figure 56: Total US retail sales and forecast of tortilla chips, at inflation-adjusted prices, 2014-24
                                                                    • Appendix – Retail Channels

                                                                        • Figure 57: Total US retail sales of potato and tortilla chips, by channel, at current prices, 2014-19
                                                                        • Figure 58: Total US retail sales of potato and tortilla chips, by channel, at current prices, 2017 and 2019
                                                                        • Figure 59: US supermarket sales of potato and tortilla chips, at current prices, 2014-19
                                                                        • Figure 60: US drugstore sales of potato and tortilla chips, at current prices, 2014-19
                                                                        • Figure 61: US convenience store sales of potato and tortilla chips, at current prices, 2014-19
                                                                        • Figure 62: US sales of potato and tortilla chips through other retail channels, at current prices, 2014-19
                                                                    • Appendix – Key Players

                                                                        • Figure 63: Multi-outlet sales of potato and tortilla chips, by leading companies, rolling 52 weeks 2018 and 2019
                                                                        • Figure 64: Multi-outlet sales of potato chips, by leading companies and brands, rolling 52 weeks 2018 and 2019
                                                                        • Figure 65: Multi-outlet sales of tortilla chips, by leading companies and brands, rolling 52 weeks 2018 and 2019
                                                                    • TURF Analysis – Potato and Tortilla Chips – Methodology

                                                                        • Figure 66: TURF Analysis – Factors encouraging trial of new chips, November 2019
                                                                        • Figure 67: Table - TURF Analysis – Factors encouraging trial of new chips, November 2019
                                                                    • CHAID Analysis – Potato and Tortilla Chips – Methodology

                                                                        • Figure 68: Chip behaviors – CHAID – Tree output, November 2019
                                                                        • Figure 69: Chip behaviors – CHAID – Table output, November 2019

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