By: Steve Dwyer | August 13, 2024
The definition of snacking is evolving.
Manufacturers and retailers adapting to the changing trends, but it’s no small task as the snack landscape changes.
Energy drinks and coffee are now “snacks,” and flavor pillars of sweet, sour and spicy are being jumbled into single snack options. Plus, snacking has moved into all dayparts.
The trends represent consumers, who seek everything from adventure in their snacks, to budget relief due to high inflation.
Consumers are reimagining snacks and taking liberties to create their own customized iterations. “We’re seeing ‘do-it-yourself’ snacking really starting to percolate—people staking traditional snacks and dressing them up, if you will, to suit their needs,” said Sally Lyons Wyatt, global executive vice president and chief advisor of consumer goods and foodservice insights at Chicago-based market researcher and consultant Circana.
With food prices soaring by 30% or more over the past five years, consumers are “creatively adapting to these challenges,” Lyons Wyatt said. “People are still treating themselves to a preferred snack, but now they’re figuring out ways to do it creatively—and social media is a big influencer of this with videos to walk them through preparation steps.”
Snack Purchases Drop
In 2023, 51% of customers who entered a c-store bought a snack from the center-store. In 2021, the number stood at 55%, according to Gary Evans, category manager, confection and alternative snacks for Alimentation Couche-Tard’s Circle K Worldwide Franchise unit.
The question is, how do “we get that basket back to 55% or greater?” said Evans. Evans sees people seeking lower-priced options and deeper discounts on segments such as candy. “The costs of goods are up 15% but salaries are not close to matching that mark. In 2024, discounts will be a big part of the strategy,” said Evans, who oversees 800 stores in 33 states. His team has experienced double-digit growth for candy and snacks for more than six years.
Volume trended soft in late 2023 and into 2024 for packaged snacks due to several reasons, Lyons Wyatt said.
“If people tend to beeline to the beverage cooler, what can you do to ‘tease’ them with a packaged snack? How do I interrupt people for just one or two seconds to drive impulse?” —Sally Lyons Wyatt, Circana
“People might be migrating from smaller to larger pack sizes [which results in fewer units sold]. But a big underlying issue is lack of innovation. No doubt, consumers have identified the perimeter of the store as the go-to spot. It will take the right merchandising and loyalty programs for retailers to get volume back to where it should be,” said Lyons Wyatt.
Lyons Wyatt recommends operators think about customers celebrating occasions throughout a typical week and respond in kind.
“If some people tend to beeline to the beverage cooler, what can you do to ‘tease’ them with a packaged snack? How do I interrupt people for just one or two seconds to drive impulse? It’s getting harder, because two snack competitors to packaged snacks are coffee and energy drinks. They have positioned themselves as pick-me-up snack options in the afternoon,” she said.
Shake it Up
The lack of real innovation has stalled growth expectations. The broad snack category index is a mixed bag, depending on sector, according to Chicago-based Circana.
Salty snacks, snack nuts, gum, cookies, non-chocolate candy and snack/bar granola bars registered growth ranging from 3.4% to 8% on dollar sales (the latter being gum), for the 26-week period ending May 19, reflecting total U.S. c-store activity, according to Circana. In the broad index, at least four other segments lost sales, while units for most snack segments were flat or down.
Evans of Circle K predicts a trend in 2024 where certain vendors and brands who “don’t typically ‘talk’ to each other” will collaborate more on new snack innovations to shake up the narrative. The overarching trends see this playing out with burgeoning sweet-and-sour snack combinations, exotic snacks, hot and spicy, healthy, energy snacks and more.
“The products within center store are fun—who doesn’t like trying a new sweet snack?”—Kera Gilmer, TopStar Express
One example is Sour Patch Kids Oreos—vanilla cream-filled cookies speckled with colorful bites of the sour candies that parent company Mondelez plans to release this year.
Kristen Braun, senior brand manager for Oreo innovation at Chicago-based Mondelez, said it takes the company one or two years to develop such products—all for what might be a nine-week limited-time offer on the shelf. Braun is already thinking ahead to future flavors that blur the lines between sweet, salty and spicy.
“We’re in an exciting time of flavor development where consumers are not just one thing. You’re not just a sour lover or a sweet lover. You want a little of this and a little of that,” said Braun. “Companies are finding the freedom to explore a little bit more and get more creative.”
In conjunction with three global brand icons—Kellogg, Kraft Heinz and Dunkin’—Frankford Candy launched Kraft Heinz Gummy Lunchables Nachos, tropical fruit-flavored, nacho-shaped gummies with liquid candy cheese and salsa.
“Consumers are increasingly interested in experiences with favorite food brands that they can share with family and friends, and gummy candy is on fire right now,” said Molly Jacobson, director of business development at Frankfort Candy. “Lunchables is the first to allow people to build and eat a meal their own way.”
Retailers see matters bubbling up relating to the innovation card. “Every week I get emails from manufacturers with new and different products and innovative ideas,” said Kera Gilmer, category manager/merchandiser, Top Star Express, Emmaus, Pennsylvania, which operates 20 stores in eastern Pennsylvania.
Gilmer cited several real innovations to drop lately, including Kellogg’s Homestyle Rice Krispie Treats, Doritos Sweet and Tangy BBQ and Combos Nachos—which all performed at a high level in Top Star stores.
Better Days Lie Ahead
While 84% of snack categories have improved their on-shelf availability rates, certain categories have exhibited mixed results, according to Circana.
This “underscores the need for continuous monitoring and adaptation to meet consumer demand,” the company reports.
Flavor and taste as priorities stand apart from the crowd as consumer values, with 83% of consumers reporting that they choose snacks that have a flavor they prefer, Circana said. Despite economic constraints, consumers are remaining loyal to familiar products, emphasizing the need for incentivizing purchases and leveraging integrated marketing strategies to drive engagement, the snack report went on to state.
Retailers need to understand trends, “such as the increasing demand for indulgent offerings as a temporary escape from daily stressors, and the rise of snacking as a meal replacement due to busy lifestyles,” said Lyons Wyatt.
Better-for-you (BFY) snacks can assist with daily nutrition, and by leveraging the relevance of on-the-go convenience, brands “can effectively tailor their offerings to help consumers find the right balance and meet their evolving needs,” said Lyons Wyatt.
Speaking about BFY snacks, the pandemic lockdown saw people toggling back and forth between eating healthier (motivated by needing to bulk up immune systems during COVID) but also having a strong desire to indulge because many people were bored and isolated.
“As we went into 2024, a slight change occurred regarding how consumers engage with snacks—and healthy/BFY has stepped up in their eyes,” said Lyons Wyatt. “BFY is catching momentum, and it’s impeccable timing.”
There’s a potential link between BFY and DIY (do-it-yourself) snacking for at least one reason: When people prepare their own snacks from scratch, it often means integrating the healthier, non-processed or lower-processed ingredients that reside in their pantries.
How to Resonate
Whatever the trend, retailers, wholesale partners and suppliers are tasked with resonating with consumers. Compelling messaging—be it on-package, via social media, traditional media or deployment of mobile apps (to provide deals and discounts customized to individual users)—all are integral puzzle pieces to restore the volume metrics that Circle K’s Evans refers to.
Snack messaging is made easier, given that so many consumers are on their phones all day, Circana said.
“As 34% of consumers turn to social media to discover new snack foods and trends, snack brands have a prime opportunity to engage and form deeper connections with their target audiences,” the company said.
With 20.2% of eating occasions occurring while watching TV programs, screen time has “become intertwined with snacking routines,” Circana notes. “By aligning with relevant cultural moments and occasions, brands can capitalize on viral trends and ignite excitement among consumers, potentially driving increased engagement and sales.”
Packaging innovations need to be addressed just as much as what’s inside the bag, box or stand-up pouch. “Eye-catching and colorful graphics can offer a contemporized look and feel that sets them apart,” said Lyons Wyatt. “With younger consumers, it’s all about aesthetics, the vibe and colorful packs.”
At the most recent National Confectioners Association’s “Sweets & Snacks Expo,” Lyons Wyatt was impressed by several easy-to-open and easy-to-eat snack formats, “where you can snack, reseal and come back later, as the package format retains freshness.”
Balancing Act
To push the envelope further on achieving dollar and unit objectives, “brand balance” is shaping up nicely, to an extent where both large and smaller snack brands are making equal impressions on consumers to fill the retail market basket.
Evans of Circle K said smaller brands stepped to the fore when supply chain issues and out-of-stocks dogged larger brand partners. Some smaller, regional brands have become entrenched and retained shelf space in the ensuing time span. He cited Candy Dynamics and Raindrops line of gummy pizza, taco, sushi and burritos as one of those small-brand success stories.
“There’s a balance,” said Circana’s Lyons Wyatt. “Smaller brands have been able to gain momentum but, that said, the most compelling growth will always be generated by larger brands. Smaller brands can quickly bring excitement and add a unique differential—and can respond to retail customers quickly to deliver new innovations. The big guys have the lion’s share of volume but are pushing harder to embrace social media as a vehicle for engagement.”
Source: CSP