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The snacking revolution is here, and BofA sees 5 food stocks that could benefit

PepsiCo, Hershey, Campbell's Soup, Mondelez, and Utz look like sweet trades, BofA says.

The formal consumption of food at a table is heading toward being as outdated as Bing pre-ChatGPT — so long live the snacking revolution.

Or at least that's the vibe from an exhaustive new piece of research from Bank of America's lead food analyst Bryan Spillane on Wednesday.

"The traditional eating pattern of three meals augmented by a snack continues to be displaced by consumers eating multiple, but smaller meals," Spillane wrote. "In some instances, meals are being replaced entirely by multiple snack-sized eating occasions. In effect, meals and snacks are merging, which is redefining their roles."

BofA's Spillane thinks snack brands are poised to take further market share away from traditional food items, setting the stage for good investment opportunities into the space.


"We see broad agreement among corporates and investors that snacks offer growth and can create value," Spillane said, pointing to opportunities into category leaders like PepsiCo (PEP), Hershey (HSY), Campbell's Soup (CPB), Mondelez (MDLZ), and Utz (UTZ).

This photograph taken in Paris on February 1, 2023, shows snacks displayed in a vending machine on a commuter train's platform. (Photo by Emmanuel DUNAND / AFP) (Photo by EMMANUEL DUNAND/AFP via Getty Images)
This photograph taken in Paris on February 1, 2023, shows snacks displayed in a vending machine on a commuter train's platform. (Photo by EMMANUEL DUNAND/AFP via Getty Images) (EMMANUEL DUNAND via Getty Images)

Underscoring the shift, BofA estimates that the U.S. snacking industry — led by powerhouse names such as PepsiCo, via its Frito Lay business, and Hershey — clocked in a staggering $151 billion in sales last year.

The total marks an 8% increase from 2021 and a 7% gain annually over the 2019-2022 peak COVID-19 pandemic period.

Excluding ice cream (which is more of a sit-down snack), the snack food category's sales rose a solid 9% year on year in 2022 to $132 billion.

Snacks accounted for 29% of total packaged food sales in 2022, Spillane estimated.

"While taste, indulgence and convenience are important; consumers increasingly emphasize function (energy/protein/collagen), ingredients (simple/natural), ethnic/flavor exploration ("heat" is in) into their snacks," Spillane said about the snack category's fundamental drivers.

The snack revolution.
The snack revolution. (Bank of America)

Comments from top leaders in the snacking space to Yahoo Finance shed further light on the major shift in food consumption that looks to be underway post-pandemic.

"Snacking is growing faster than food," Hostess Brands CEO Andy Callahan said on Yahoo Finance Live. "And indulgent snacking is growing faster than snacking overall. So we're in a good position to continue to service consumers."

The Twinkie maker is focused on further leveraging its iconic sweet snack in even easier-to-eat form factors such as Bouncers, Callahan said.

Meanwhile, cereal giant Kellogg (K) is so in on snacking that it's splitting up its legendary business to unlock value for shareholders. One business will house cereal brands such as Kellogg Cornflakes, while the other will house snack brands such as Pringles, Cheez-It, and Pop-Tarts.

"We do believe that the snacking business is undervalued inside our portfolio today," Kellogg CEO Steve Cahillane told Yahoo Finance Live (video above). "And we'll prove that as we go forward with the spin. We think it's a very, very again differentiated portfolio, and we believe that we can really unlock value by going forward with the spin."

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on the banking crisis or anything else? Email

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