The chips category has been branching out lately. Consumers are looking for chips fried in different oils, such as avocado, as well as protein-packed varieties. Manufacturers have been responding to consumers’ wishes.

Market data

The chips category has experienced moderate growth recently, according to Circana (Chicago) data from the past 52 weeks, ending on April 21, 2024. The salty snacks category rose 5%, taking in $39.36 billion in sales, and the potato chips category brought in $11.1 billion of that number, with 6% growth.

Lay’s garnered $4.27 billion in sales, with a 3.8% uptick. Ruffles, another Frito-Lay brand, took in $1.9 billion, with a 5.6% increase from last year. Pringles came in third with $1.4 billion, and a small 1.3% increase in sales. Others to watch include private label, with $991.4 million in sales but a healthy 24.5% increase, and Barcel, with a 17.7% increase.

In the apple chips category, which took in $10 million in sales but experienced a drop of 11.7%, Bare Snacks took the lead, with $4.6 million but 24.1% in the red, and Seneca Foods took in $2.36 million, also with a drop (-9.7%). Private label, although only bringing in $1.95 million in sales, showed promise, with a 13.85% increase.

Looking back

“Over the past year, consumer awareness and desire for better-for-you snacking and earth-friendly products has continued to increase,” says Bob Zender, director of marketing, Dieffenbach’s Potato Chips, Inc. (parent company of Uglies). “The Upcycled Food Association has reported with SPINS that interest in upcycled foods has increased by 118% in the past year.”

Zender notes challenges have come in different shapes and sizes, from managing the physical demands of growth on the operations side, to optimizing the company’s distribution network while satisfying customer demand.

“On the other hand, the supply of imperfect potatoes is robust, the plight of the American farmer continues, and the hunger of children around the world persists. Fortunately, Uglies Kettle Chips is up for these challenges,” he comments. “Uglies has expanded its line of single-serve packages in this past year and is enhancing those with a hole-punch for merchandising ease this summer. We also had success with a limited time offer at Sam's Club with Uglies chili con queso flavor, which consumers loved—and there are more flavor innovations to come.”

James Marino, president and CEO, Jackson’s, said that last year the company had unprecedented growth of 287% year-over-year and is on track to at least match that growth this year.

“Consumers are hungry for snacks made from better ingredients and specifically avoiding industrialized seed oils. Our growth on Amazon’s virtual shelf has been incredible, with Jackson’s routinely ranking in the top 15 in the huge Chips & Crisps category,” he notes. “More than ever before, people are focused on the quality of ingredients in their favorite foods, including snacks. We receive emails and calls from consumers daily thanking us for making tasty snacks made in avocado oil that allow them to snack guilt-free.”

In particular, Marino remarks, Jackson’s has benefitted from interest in alternatives to seed oils: “This bold move toward simplicity in ingredients and guilt-free indulgence is reshaping the industry, setting new gold standard for what it means to snack well,” he explains.

Marino says that in 2023, Jackson’s tripled its manufacturing capacity. “To keep up with growth, we have already begun our next production expansion project and planning the follow-up project,” he shares.

Stuart Heflin, general manager and senior vice president, Quest Nutrition, says consumers are shifting to higher-protein snacks. “Quest Chips has [consumers] covered, with 18-20g of net carbs and only 3-4g of net carbs per serving,” he says, adding that the Hot and Spicy Tortilla Chips launched in spring 2023 have performed “extremely well, achieving +49% repeat rate in its first year of launch.”

Jared Drinkwater, CEO/co-founder/chipmaster, Low and Slow Snacks, says while the company is only nine months into its retail journey, primarily in Texas, “we are truly excited about the distribution opportunities ahead of us. In the coming months we anticipate accelerated revenue growth and expansion in other great BBQ markets including Wisconsin, Kentucky, Kansas City, St. Louis, Montana, the Carolinas, Tennessee, and more.”

Drinkwater says the company is focused on building its own subcategory in salty snacks: authentically smoked snacks. “From spending so much time sampling our unique products in-stores as well as at BBQ festivals, one thing is clear. The product experience derived from burning real hickory wood to smoke all of our products is something consumers genuinely enjoy, and something that’s never been done. I believe authenticity is core to the excitement around what we are building, especially within the growing BBQ community across the U.S.,” he notes.

Low and Slow Snacks released two new products (its first two to market) this year: Hickory Smoked BBQ Corn Chips and Hickory Smoked BBQ Potato Chips. “Both are smoked with real hickory wood and covered in a slightly sweet and savory rub that took us years to get right. Reception has been incredible,” Drinkwater finishes.

Looking forward

Zender predicts big brands will get bigger as small brands are consumed, and supporting small family-owned businesses like Dieffenbach’s “will become more difficult for consumers, but we will keep standing up for what is right and trust that others will find that valuable.”

“The ever-rising cost of logistics and the persistent scarcity of labor will continue to burden American businesses,” he adds. “[However], we have some exciting flavors and line extensions in the store, as well as potential new forms of upcycled snacks … stay tuned!”

Marino says Jackson’s is already seeing trendsetting retailers recognize the massive consumer movement of better-for-you oils and rethink the snack set.

“They aren’t just checking the box by adding one or two SKUs. They’re leaning in with a brand block lineup and committing to upcoming innovation. [Although] Jackson’s is a sweet potato-focused company and we have designed our production facility to produce crispy sweet potato chips made in premium oil, producing classic potato chips is easy—we’ve been testing and have found chipping regular potatoes much easier than sweet potatoes. For our select top customers, we are rolling out Classic Kettle Chips cooked in Avocado Oil this summer,” he shares.

Heflin predicts consumer interest in high protein will remain over the next year. “Quest is prepared to be at the forefront of their snacking needs with fun innovative items, and we are always working on exciting new innovations and product extensions,” he notes.

Drinkwater says while inflation continues to play a role in the category, “we’re confident there will always be room for great-tasting, differentiated snacks to grow.”