Have you spotted the trend? Big names in confectionery are investing heavily in snacks.
It started more quietly – a biscuit brand here, a muesli bar there. But now, two of the biggest names in sweets are buying two of the biggest names in snacks, marking a clear move towards category diversification.
Everyone will have a theory on why confectioners are betting big on snacks. Here’s ours.
Confectionery giants buy into snacks
- Mars, Inc. is acquiring snacks company Kellanova in a deal worth $36bn (€30.6bn). Mars does not only sell confectionery, but it's likely the Kellanova portfolio will fold into its confectionery-focused Mars Snacking division, alongside brands like Snickers and Twix.
- Italian confectionery company Ferrero Group is also investing big in snacks. It's been doing this for a while, with acquisitions like Eat Natural and Fulfil, but now it's buying WK Kellogg in North America in a deal worth $3.1bn. The acquisition will see iconic cereal brands like Froot Loops and Special K join Ferrero's lineup.
Confectionery players want healthier sales splits
Pressure is mounting for food companies to sell healthier foods more often – and confectionery portfolios are notoriously unhealthy.
Every few years, the world’s largest food businesses are ranked by the healthiness of their portfolios. The most recent ranking, in 2024, saw big-name confectionery companies Hershey, Mondelēz, and Ferrero Group land near the bottom.
This poses a problem when it comes to reporting on healthy versus unhealthy sales splits. In the UK for example, the government will soon require large food businesses to disclose how much of what they sell is considered healthy – and how much is not. A confectionery company alone is unlikely to score well. But one that also sells a significant volume of snacks might fare better.
Whether this is the reason confectionery companies are expanding into snacks isn’t confirmed, but it could be a factor. “Confectionery companies score poorest on healthiness of portfolios, but it’s not possible to say these recent corporate moves are driven by a desire to make overall portfolios healthier,” says Greg Garrett, executive director of the Access to Nutrition Initiative (ATNi), which publishes the Global Index. “We should wait to see the evidence for such improvements.”
Food industry needs to cater to GLP-1 users
Food companies see trends come and go. But every so often a mega trend takes hold, and the entire industry pays attention.
That’s exactly what’s happening with GLP-1 drugs. These medications, otherwise known as glucagon-like peptide-1 receptor agonists, present both a major challenge and an unprecedented opportunity to business. People taking GLP-1 drugs for weight loss often report reduced appetite, feeling fuller for longer, and a loss of cravings for sweet or fatty foods.
Confectionery, by definition, is typically sweet – and in the case of chocolate, almost always fatty.
As more people turn to GLP-1 drugs (Circana estimates that already 12% of adults in the US have already used one), the confectionery category is increasingly under pressure. Snacks, on the other hand, offer a significant opportunity in this new landscape. They can be reformulated to cater to GLP-1 users, both while they’re taking the medication and after they’ve tapered off.
Early evidence suggests the most effective snack formats for GLP-1 users are portion-controlled, nutritionally dense, and high in protein and fibre. The opportunity for functional snacks to meet the needs of this growing consumer group is unlike anything the category has seen before.
Chocolate companies want to de-risk their portfolios
Chocolate makers have not had an easy time of late. Over the last 18 months, the sector has seen crops fail in Ghana and Cote d’Ivoire, plagued by disease and bad weather.
Shortage of supply has sent cocoa prices skyrocketing, with records repeatedly broken. Confectionery giants have been buying up big to avoid paying too much, but the problem endured and by now all chocolate makers will have had to fork out more for cocoa.
Unfortunately, the cocoa crisis is not temporary. Climate change presents a real threat to the sector, where current growing regions become too hot for optimum cocoa production. If temperatures rise, yields will drop, and the sector will face new shortages – only these ones would be long-term.
By diversifying portfolios into other categories, like snacks, chocolate makers can help futureproof their future. Neither Mars nor Ferrero have admitted to diversifying portfolios for this reason, but it’s food for thought.
The future of food is snacking
Putting speculation aside, one thing is clear: snacks mean big business. It’s a fast-growing market, and it makes sense that major players want a slice of the pie.
This year, the global snacks market is expected to reach $246bn (€211bn), with forecasts projecting it will hit $922bn by 2030 (Statista).
Not long ago, three square meals a day was the norm. Now, more consumers are choosing to graze throughout the day. The shift makes the opportunity in snacks almost limitless. Snack brands can tap into multiple eating occasions, from breakfast to on-the-go snacking and meal replacements.
Confectionery, by contrast, is positioned as a treat. It’s rarely designed to replace a meal.
Snacks also have more flexibility to align with broader health trends. Think functional foods, such as high-protein cereals or probiotic-enriched muesli bars. In today’s supermarket, a better-for-you snack often makes more sense to consumers than a better-for-you chocolate.
Snacking’s rise doesn’t spell the end for confectionery. Treat occasions will always have their place. But the move from sweets into snacks is a smart one, and increasingly, a strategic one. Will more confectionery companies follow suit? All signs point to yes. You heard it here first.
