Something to Snack On
Snack food retailers and suppliers rejoice. Americans are snacking more and this trend is expected to continue for the foreseeable future.
Research from Circana shows that 49% of consumers are snacking at least three times per day, up 4% over the past two years. With a growing number of consumers visiting their snack closet with greater frequency, there is opportunity for retailers to entice consumers to buy more.
As with any consumer purchase behavior, price is a major factor. More recently, as prices across the store rise, shoppers are not just grabbing their favorite branded products off of store shelves. They’re now looking toward private label products in an effort to save money.
Circana insights show that 72% of consumers look at the price of snacks before making a purchase, up 5% over the past two years. Additionally, one quarter of consumers said they are buying items on sale with greater frequency, up 3% over the same time period.
The price sensitivity of today’s consumers would seem to provide new opportunities for retailers to either boost their private label snack assortments, or enhance the visibility of those products in front of consumers.
“In fact, 61% of consumers said they switched to private brands when their budget got tight, so many made the switch,” said Sally Lyons Wyatt, executive vice president and practice leader with Circana.
Over the past five years, a number of private label snack categories have seen at least 5% dollar share along with unit share grow. They include refrigerated snack cakes and doughnuts; refrigerated pastry, danish, and coffee cakes; frozen cookies; aerosol and squeezable cheese spreads; snack nuts; and pork rinds.
“There was a recognition from retailers a while ago about the role snacking was going to play,” Lyons Wyatt explained. “They started to invest in innovation, trying to take over certain categories with products that offer quality and a positive taste experience at a price less than that of national brands.”
Further investment in innovation by retailers in their private brand snack selection could also open new doors with shoppers, and not just with those at lower income levels. Depending on the category, Lyons Wyatt said retailers could bring to market snack products that are aimed at consumers at higher income levels who are also looking for options that offer a better value.
“Private brands in the snack category are appealing to all generations and consumers at all income levels,” she added.
Opportunity to drive more unit sales of snacks is also prevalent across a number of retail channels. While higher prices over the past two years have driven dollar growth across retail, only two channels – club and military – have also seen growth in unit share.
Lyons Wyatt feels the growth in unit share seen with the nation’s leading club retailers stems largely from consumer knowledge of the strong value they get when shopping at a club.
“People know that they are going to get the best price per unit/price per ounce at a club,” she said. “This is why they’re willing to pay that bigger ticket.”
Lyons Wyatt said the unit growth at military retailers stems largely from out-of-stocks seen during the height of the pandemic, which led to those outlets comping against year-over-year soft sales figures. Additionally, she noted higher gas prices led shoppers eligible to purchase fuel at military-operated convenience stores/gas stations to also buy more snacks at these retail outlets.
On the flip side, drug chains and dollar stores saw the largest decline in unit sales, according to Circana, which might surprise some given the steady foot traffic retailers in these channels enjoy. To boost unit sales, Lyons Wyatt said retailers in these two channels need to get the price/size equation correct while also leveraging social media and giving their product selection a higher profile position on their respective apps.
“They should also look at bundles and co-promotions, anything they could do that would help lessen pricepoints,” she said. “I would also test and learn in a continuing effort to get the assortment to where it needs to be.”