Consumers Seek Flavor Innovations When Snacking

Sweet and salty, spicy and sweet and tangy and salty flavor combos are the most popular.

ALEXANDRIA, Va.—Ingredient integrity and flavor exploration has the most influence on food and snack choices across all generations, according to the Frito-Lay 2022 Summer Snack Index. Forty-two percent of consumers stated they would choose flavor combinations such as sweet and spicy, or tangy and salty over familiar, regional flavors (21%), texture (21%) and international flavors (15%).

Thirty-five percent of consumers stated that innovative flavors are most likely to influence what they select, followed by recommendations (28%), brand recognition (21%), packaging (9%) and sustainability efforts (7%). Additionally, 40% of consumers are most excited to find a snack with a flavor they love but have never had in a snack product before. Given the choice, people are selecting innovative flavor combinations most often (59%), including sweet and salty, spicy and sweet and tangy and salty.

“During the summer, people explore new activities, new places and enjoy new flavors of snacks as they attend more outdoor gatherings,” said Mike Del Pozzo, chief customer officer, Frito-Lay North America. “While flavor continues to drive consumers’ food-purchasing behaviors, we know how a company behaves matters and that’s why I’m proud of Frito-Lay’s commitment to sustainability and community impact.”

Ninety percent of consumers who snack daily care deeply about the companies whose snacks they’re eating, according to Frito-Lay. Snack companies’ attention to sustainability practices (77%), community impact around food access (78%) and treatment of employees (87%) are among the top values driving purchasing decisions.

About two-thirds of consumers surveyed are more likely to purchase products that invest in local communities, and purchasing sustainable food products is important to 66% of consumers. Also, 74% of consumers are more interested in naturally sourced ingredients than production-related factors like recycled packaging, compostable packaging or products made with recycled water.

Frito-Lay reports that long-term eating habits are shifting. Almost everyone enjoys the social aspect of snacking (81%), but Gen Z and millennials are more likely to prefer to eat in solitude (45%). Millennials (19%), Gen Z (20%) and parents (20%) are slightly more likely than average to snack on-the-go.

Parents think ahead when it comes to snacking, with more than 2 in 5 of parents planning to buy or create individually packaged snacks in advance before traveling this summer. Also, parents are more likely than non-parents to replace meals with snacks several times per week or more (52%). Sixty percent of consumers are most excited to snack at outdoor gatherings with family and friends now that pandemic restrictions have lifted.

According to NACS State of the Industry data, salty snacks accounted for 4.36% of inside sales in convenience stores in 2021, an increase of 0.24 points from 2020, while gross margins for the category were 40.83%, nearly a point (0.93) higher than 2020. Learn more about how salty snacks fared in 2021 in the NACS State of the Industry Report of 2021 Data.

Source: NACS

Rising Inflation May Make Eating Out a Value Play

Foodservice operators may benefit as the cost of eating at home climbs faster than the cost of dining out.

U.S. consumers are paying more for food ingredients to prepare meals at home as inflation ticks upward, but at the same time, the price of eating out isn’t rising quite as fast, so analysts see an opportunity for foodservice providers to regain that share of the stomach, CNBC reports.

Data from the U.S. Department of Labor indicate that prices of food purchased for at home consumption climbed 6.5% in December over the year-ago period, while prices for food away from home rose 6%, the biggest jump since January 1982, CNBC reports.

Bank of America Securities analyst Sara Senatore wrote in a note last week that the gap in prices improves the value proposition for restaurants, which haven’t yet fully recovered from the pandemic, CNBC says.

Restaurants are paying higher prices for food items, too, but many have ways to partially offset those costs.

Ritch Allison, CEO of Domino’s Pizza, said last week at the virtual ICR Conference that the company anticipates an 8% to 10% increase in food costs this year, which would be 3 to 4 times as much as is typical for the chain. Domino’s plans to alter its promotion strategies to help ease the pain of higher costs for meat, cheese and grains while trying not to turn off customers. Once tactic might be to offer promotional prices for digital orders only.

Darden Restaurants, owner of the Olive Garden, LongHorn Steakhouse, Yard House, Bahama Breeze and Seasons 52 brands, expects to raise menu prices at its restaurants 4% over the next six months to offset a 9% increase in costs for food and beverages plus a 9% jump in labor costs, Newsweek reports.

Rick Cardenas, president and chief operating officer, Darden, said consumers so far aren’t turning away due to the price increases.

Convenience retailers with a strong foodservice offer are well-positioned to win trips away from QSRs when customers are searching for away-from-home eating occasions. NACS Convenience Voices surveys indicate that shoppers are making 1.3 fewer trips per week over the past five years than during prior periods, and when it comes to foodservice, convenience stores are leaking trips to quick-serve restaurants. In fact, 36% of shoppers in the 2020 Convenience Voices program said they had plans to go to a QSR within 30 minutes of leaving a c-store.

At the 2021 NACS Leadership Forum, Lori Stillman, NACS vice president of research, outlined steps retailers can take to help capture those trips. With the average spend at a QSR pegged at $6 per trip, convenience stores can gain over $13 billion annually by winning back just 10% of current leakage, Stillman said.

“Our foodservice offer is very well connected to our packaged beverage offer,” Stillman told Leadership Forum attendees. Consumers are already shopping c-stores to quench their thirst—nearly half of shoppers come inside stores because they are thirsty, NACS Convenience Voices data show. Think about food-to-go offers, take-home meals and comfort foods.

Stillman noted that 85% of consumers don’t know what’s for dinner at 4 p.m. “What are you doing to catch that shopper who is driving by your location on their way home? How do you trigger them to turn around, come in and grab something from you?”

Hear more insights from Stillman in Convenience Matters Episode No. 283, “Outlook Ahead: Convenience Priorities.”

Source: NACS

The ‘New’ Rush Hour Isn’t Harried

Vehicle traffic hasn’t returned to the normal morning driving patterns—and probably never will.

ARLINGTON, Va.—The morning rush hour has largely dissipated, at least that’s the finding of a recent USA Today/Wejo report analyzing traffic data, USA Today reports. While more Americans are returning to the office, the morning drive time has been significantly altered—and may never return to pre-COVID-19 patterns.

Rush-hour traffic has elongated, shifting to later in the mornings as drivers avoid the traditional heavier traffic times. But with more Americans expected to head back to the office after Labor Day, overall volume will increase. However, traffic experts predict the flexible work arrangement enjoyed by many will continue, including remote work.

“The morning rush hour has gotten later, and it’s gotten flatter,” said Daniel Tibble, director of data science and analytics for Wejo. “In almost all scenarios, traffic is not dropping as much in the later hours and is dropping more in the earlier hours.”

In April 2021, total miles driven dropped 8.2% from April 2019, according to the Office of Highway Policy Information. In rural areas, traffic returned more, with April 2021 volumes decreasing 3.5% from April 2019. Urban traffic volumes decreased 10% during the same period.

Overall, fewer early commuters (between 6 and 8 a.m.) in many metro areas are on the road, meaning drivers are getting out later in the morning.

“More flexible work is taking the pressure off of people to get to work dead on 8 o’clock,” Tibble said. “If people can flex to improve their quality of life, people are going to want to do that. … A little flexibility in the office in terms of remote working means that people can choose to improve their quality of life.”

While the lack of traffic is a welcome change to commuters, it also means the morning daypart has also been stretched out, a key segment of the day that c-stores are attempting to capture. Even prior to the pandemic, breakfast was a prime target for c-stores, as detailed in “Rise & Shine” in NACS Magazine. However, the segment got hit when commuters were forced to shelter in place. Now that commuters are slowly coming back, foodservice retailers are stepping up for round two in their matchup to win breakfast. To read more about the progression of the capture of breakfast sales, read “Revitalizing Breakfast” in NACS Magazine.

Source: NACS

Holiday Travelers Stock Up on Ice, Drinks

With 47 million+ Americans traveling for Independence Day, c-stores are stocking the refreshments they crave.

ALEXANDRIA, Va.—As the national economy continues to rebound from the COVID-19 crisis, Americans are hitting the road and skies in droves: More than 47 million will travel this Independence Day weekend, according to AAA.

More than 91% of holiday travel will be by car this weekend as prices for gasoline are at their highest since 2014, with the national average expected to remain above $3 per gallon, AAA said. A projected 43.6 million Americans will drive to their destinations, the highest on record for this Independence Day holiday and 5% more than the previous record set in 2019. This year’s Independence Day holiday weekend is defined as Thursday, July 1 to Monday, July 5.

“With travelers eager to hit the road this summer, we’re expecting nationwide traffic volumes to increase about 15% over normal this holiday weekend. Drivers around major metro areas must be prepared for significantly more delay,” said Bob Pishue, transportation analyst, INRIX.

Theme parks in Orlando, Florida, and southern California, as well destinations in Denver, Las Vegas, Seattle, Chicago and New York, top AAA’s list of Independence Day destinations this year.

It wouldn’t be a road trip without a stop for gas and snacks, drinks and other refreshment, though, so convenience stores are prepping for heavy traffic, both at the pump and in the store. What are travelers reaching for to fuel their trips? According to Paytronix, holiday travelers who stop at a c-store to fuel up are more likely to buy ice, beer and lottery tickets over the weekend.

Compared to the average weekday or weekend, ice sales rise by 25% during holiday weekends, Patronix said. Lottery tickets and alcohol also enjoy bumps of 8% and 6%, respectively.

The top items purchased in convenience stores throughout the year include prepared food, packaged beverages, cigarettes and other tobacco products, hot dispensed beverages, salty snacks, candy, beer, and frozen and cold dispensed beverages, NACS State of the Industry data show.

In the forecourt though, fuel supplies remains a concern this weekend, with shortages being possible due to the lack of tanker drivers.  Read “Trucker Shortage Hits Home” and “Higher Pay for the Long Haul” for more on what is causing delays in deliveries to retailers.

Source: NACS