Even with snacking’s increased popularity during the pandemic, Takis’ new brand extensions will face an increasingly cramped snack segment as both major CPG companies and startups ramp up their innovations.
Mondelez International’s innovation and hub SnackFutures, for instance, launched CoLab in February where up to 10 startups receive a $20,000 grant to develop their ideas, while the snacking giant gets access to new insights and potential investment opportunities.
There are also several products already on the market that make for stiff competition. In 2014, Frito-Lay launched Doritos Dinamita, a rolled tortilla chip snack, that directly competes with Takis. The snack giant also unveiled Flamin’ Hot Cheetos popcorn last January to help capitalize on the continued success of Flamin’ Hot Cheetos.
Popcorn, in particular, has seen growing sales as people reach for products that may seem more natural and healthier. According to data from IRI, ready-to-eat popcorn and caramel corn made up $1.5 billion of the $26.7 billion salty snacks segment, representing a 5% jump for the 52 weeks ending May 17, 2020. Big players have taken an interest in the space. Hershey bought Amplify, owner of established brands like Skinny Pop and Pirate’s Booty, in 2017 for $1.6 billion, and in 2019, PepsiCo acquired BFY Brands, which makes popcorn crisps PopCorners.
Even Amazon has gotten into the salty snack arena with its Aplenty private label line. While it may be too soon to tell if it can compete with some of the better-known brands, it shows companies looking to leverage the growing snacking segment.
Despite the competition, Takis’ new products lean into some popular trends that could position itself well. More consumers are asking for spicy foods. According to a 2019 Kalsec survey, 50% of respondents reported they were eating food hotter than they were the year prior. Those numbers are doubled compared to 2017. Along with spicy foods, global flavors are also in-demand, according to McCormick’s 2020 Flavor Forecast. Spice and global tastes combine two of the most prominent features of the Mexico-based treat.
Takis may also be able to take advantage of Gen Z consumers, who have helped its popularity skyrocket through social media campaigns and other viral online content, particularly on TikTok. According to a semiannual report from Piper Sandler, food is Gen Z’s top spending priority, taking 23% share of their wallet this spring.
Snacking has shown substantial growth during the pandemic. At the height of lockdown orders last year, 37% of consumers primarily stocked up on salty and frozen snacks, for the month of April 2020, according to the NPD group. Even with consumers venturing back outside, 84% of consumers have said snacks are an essential part of enjoying the summer, according to Frito-Lay’s latest U.S. Snack Index.