The little food brands that could

Big Food is facing an unexpected rival: small, nimble startups that seem to know what consumers want before even they do.

• Overall sales of packaged foods are climbing in the US
• …but household names like General Mills, Kraft Heinz, and PepsiCo have taken a hit to their bottom lines in recent months, largely due to the rise of niche food brands with more cultural cachet.

Reversing the food chain

This trend of smaller companies grabbing market share from legacy brands is apparent across a range of food categories, from protein bars, to frozen meals, to “functional beverages” like kombucha, electrolyte packets, and energy drinks.

• One main example is Chomps, a meat-stick startup that grew from $70 million in sales to ~$660 million between 2021-2024, and now rivals established brands like Jack Link’s and Slim Jim.
• The same story is playing out across chips, frozen foods, chocolate, and yogurt, according to the Wall Street Journal.

By the numbers: Startups make up less than 2% of US food, beverage, and household products—but accounted for ~39% of category growth in 2024, more than double their share the year before, per data from Bain & Co.

Meanwhile…Nearly all major food companies’ stocks have dropped over the past three years, compared to ~80% growth in the S&P 500 over the same period.

Why startups are winning

Analysts attribute the trend to several factors:

• Startups are lean and agile enough to respond quickly to changing consumer preferences and market trends, making decisions in ~10 minutes that would take a mature brand ~6 weeks.
• Online retailers like Amazon give small companies the perks of nationwide distribution, without the need for a broad physical presence.
• Smaller brands that lean into social media campaigns and online-first strategies can receive outsized cultural impact for a fraction of the price of TV ads.

Bottom line: Legacy food companies aren’t helpless—they still have shelf space, scalability, and decades of consumer trust. But as long as nothing changes, startups will continue to eat their lunch.