U.S. Potato Chips Market Size, Share & Trends Analysis Report By Flavor (Flavored, Plain/Salted), By Distribution Channel (Supermarket, Convenience Stores), And Segment Forecasts, 2018 - 2025

Industry Insights

The U.S. potato chips market size was valued at USD 7.74 billion in 2016. Availability of numerous brands as well as flavors of the product is one of the key trends positively influencing the growth of the market. Rising research activities to create and innovate flavors made up of natural ingredients are providing an upthrust to the market.

The retail industry is growing steadily due to the emergence of new distribution channels such as supermarkets and hypermarkets. Availability of a wide range of products in these distribution channels is boosting consumer inclination towards them. Emerging economies such as India and China are experiencing an increase in the number of supermarkets and wellness chains, which is likely to stoke market growth.

Rapid socio-economic development that has taken place over the decades has resulted in the rise of cases of diseases such as heart disease, cancer, and diabetes in various segments of the population. Growing health consciousness is resulting in consumers preferring fortified potato chips.

Antioxidants are being added to potato chips in order to increase the shelf life of frying oil. Changing lifestyles that encourage on the go eating and burgeoning trend to replace meals with smaller nutritional snacks are translating into greater consumption of potato chips in daily diet.

Attractiveness of the market has caught the attention of many consumer companies. Consumer companies are investing in research and marketing activities to develop a deep understanding of changing consumer tastes. Besides this, escalated new product development is impelling market players to innovate. The influx of new companies has resulted in product clutter in the market.

The market is characterized by the presence of established as well as local players. These industry participants are leading to the formation of clusters based on flavors, product, and health benefits. Changing consumer trends and lifestyles along with industry’s efforts to develop products that suit consumers’ tastes and requirements are anticipated to further augment product clutter in the arena.

Distribution Channel Insights

Supermarkets/hypermarkets dominated the overall industry with a revenue share of approximately 76.0% in 2016. Ease of shopping offered by supermarkets coupled with discounts on bulk purchases attracts a large number of consumers towards the segment.

Independent retailers form an important component of the distribution channel for any potato chips manufacturer. Lack of retail infrastructure in several countries and the rising number of grocery stores is expected to stir up the demand for potato chips through this distribution channel.

Convenience stores accounted for 15.3% of the U.S. potato chips market in 2016. A convenience store is a retail distribution channel that stocks a large number of everyday goods such as snack foods, groceries, toiletries, soft drinks, and newspapers. Prices of products are slightly higher in this distribution channel as the number of marketing intermediaries is higher.

Other distribution channels in the U.S. potato chips market are service stations, drug stores, and online retail. Increasing prominence of grocery-based apps is stimulating the growth of the segment. Major challenge for the rise of e-commerce is the internet penetration rate in various countries.

Flavor Insights

The plain/salted segment accounted for a share of 60.9% in 2016, in terms of revenue. The tendency of consumers to prefer traditional flavors is estimated to fuel the demand for this product type. People in the U.S are seen to combine conventional salt chips with a variety of gourmets.

Acceptance of quick meals such as burgers and sandwiches is one of the major factors driving the market in the U.S. Chips are widely accepted and consumed as a favorite combination with burgers and sandwiches.

The flavored segment is projected to witness significant growth over the coming years. To meet varying demand in taste and preference, potato chips manufacturers are responding to consumer demand for healthier and flavored choices, offering a wide variety of options such as cheddar and sour cream, barbeque, sweet & spicy, ketchup, and cheese.

Manufacturers are creating new spicy snacks, responding to consumer interest in spicy and ethnic flavors. Rising prominence of the trend can also be attributed to growing Hispanic and Asian population in the U.S. The Hispanic population in the U.S. is projected to rise from 55.0 million in 2014 to 119.0 million by 2060, according to the Census Bureau.

U.S. Potato Chips Market Share Insights

The market is highly competitive with the presence of a large number of multinationals and small manufacturers. Companies in the market are integrated from the production of potato chips to packaging and distribution of products.

In July 2015, The Kraft Heinz Company was established by the merger of Kraft and Heinz Company. It is the third-largest food & beverage company in North America and the fifth-largest in the world with a large product portfolio.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth in the U.S. and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of the study, Grand View Research has segmented the U.S. potato chips market report on the basis of flavor and distribution channel:

• Flavor Outlook (Revenue, USD Million, 2014 - 2025)

  • Plain/Salted

  • Flavored

• Distribution Channel Outlook (Revenue, USD Million, 2014 - 2025)

  • Supermarket/Hypermarket

  • Independent Retailers

  • Convenience Stores

  • Others