Salty snacks are by nature indulgent treats, so it was no surprise that consumers turned to their favorites for comfort with the onset of the coronavirus (COVID-19) pandemic. Panic stocking renewed consumer interest in the center store aisles where they rediscovered the nostalgia and great taste of familiar snacks. Some sampled new brands they had never tried before due to limited or unavailable stock.
“This is the first time that all brands globally have been impacted at one time,” said Kara Nielsen, director, WGSN Food & Drink, WGSN, an Ascential company. "This unprecedented pandemic has created a unique opportunity for producers to emphasize their brands and reach consumers in new ways.”
Salty snacks have been the No. 2 food item contributing to dollar growth at retailers since early March, according to IRI data. Plano, Texas-based Frito-Lay’s recent US Snack Index survey also reported that 85% of national respondents say eating their favorite snack makes them feel a sense of normalcy during the current crisis. “Indulgent snacks serve several roles for consumers. For some, they are comfort foods that make them feel a bit better about their day,” said Sally Lyons Wyatt, executive vice president and practice leader, client insights, IRI. “For others, they are rewards for kids or themselves for accomplishing a task.”
Salty snacks reported 9.4% growth in earnings with $21 billion in sales for the 52 weeks ending June 14, 2020, according to IRI’s quarterly report of retail sales for the US snacking market. Indulgence is still a key driver in the salty snack market despite consumer preferences for healthier options. People want foods that taste good, according to Packaged Facts’ “U.S. Food Market Outlook 2020” updated in June.
“This has been an extraordinary year, particularly for the snack food industry,” said Mark Schreiber, executive vice president and chief consumer office, Utz Quality Foods, Hanover, Pa. "From a consumer standpoint, we have seen a general trend toward more indulgence, including potato chips, tortilla chips and cheese snacks as well as the purchase of larger sizes, providing families with a higher level of convenience. ”
One of the biggest impacts of COVID-19 is a decreased focus on portability. Small, convenient, on-the-go formats have been in the spotlight for many years, but with consumers spending the majority of their time at home, there is less need for portability in the short term.
“For now, consumers are often looking for larger pack sizes to share among family members,” said Simon Gunzburg, research analyst, Euromonitor International. “While the current degree to which consumers are ‘staying put’ is expected to be temporary, some aspects of this trend may remain as factors, like working from home becoming more commonplace."
As Americans frantically stocked their pantries with snacks to comfort them during stay-at-home orders, sales spiked for all pack sizes, but particularly for larger package sizes, for the period ending March 15, compared with the same period in 2019. The 10 to 16-oz pack sizes grew the most with an 87% increase in dollar sales, with 4.5 to 8-oz and larger than 16-oz increasing sales by double digits. Even the smallest pack sizes initially posted 22% growth as consumers left nothing behind on grocery store shelves.
“For the trailing year, we saw a trend toward multi- and variety packs on core items, satiating better-for-you options, and innovative flavors and bases,” said Jim Herr, senior vice president of marketing and R&D, Herr Foods, Inc., Nottingham, Pa. “As the country reopens, we expect continued demand in multipacks, as well as continued demand in e-commerce. Herrs will remain responsive to the changing needs across retailers as consumers either return to traditional shopping patterns or adopt newer purchase patterns.”
COVID-19 notwithstanding, flavor remains the leading driver for snack choice, even for healthier alternatives. Taste, followed by treating oneself, is a top motivator for snacking, according to Mintel research. When surveyed by Mintel, 79% of consumers said flavor is more important than brand.
“The desire for bold flavors is still trending, and bold can mean sour, not just hot, such as with Lay’s Kettle Cooked Flamin’ Hot Potato Chips and Blue Diamond Almonds Bold Spicy Dill Pickle,” said Tom Vierhile, vice president, strategic insights, North America, Innova Market Insights.
Americans continually seek global and regional flavors driven by the multicultural nature of the United States, social media and exposure to foods from around the world in restaurants, food trucks and other venues, according to Packaged Facts. As restaurant access remains limited and uncertainty persists, many consumers will continue eating at home. This creates an opportunity for producers to offer unique at-home foodie experiences using snack flavors inspired by food favorites on restaurant menus.
Utz’s Inventure brand introduced New TGI Fridays Zesty Party Sticks and TGI Fridays Buffalo Blue Pub Bites, a popped potato snack that mimics the flavor and shape of buffalo chicken wings. The potato sticks are flavored with the TGI Fridays Restaurant’s Signature Seasoning.
“Health will be an important product attribute for consumers; a pandemic brings health to the forefront,” Mr. Gunzburg said.
“Of course, immune-boosting claims have a more direct tie to fending off sickness, more general health claims are impactful to consumers as well.”
High-protein snacks are appealing, but consumers are more interested in protein from alternative sources. Fiber, whole grains and plant-based protein remain at the top of desired functional ingredients, according to the International Food Information Council Foundation’s 2019 Food and Health Survey. Less sugar in foods is also important to consumers.
Value will be at the center of snack choices due to financial uncertainty. However, value means different things for different people; it’s not just about cost. Despite economic concerns, consumers will not completely give up foods that fulfill their snacking needs. They will purchase snacks that are healthy and nutritious but also a fun treat for their families.
“The desire to ‘treat yourself’ drives demand for premium snacks making them a long-term trend,” said Mark Singleton, vice president of sales and marketing, Rudolph Foods, Dallas. “Producers would do well to innovate with premium snack lines because customers will emerge from their homes excited to buy the snacks they love.”
Private label snacks have done well in the months since March, perhaps because they provide quality snacks that cost less. Private label trends focus on the expansion of upscale products using unique flavors, with quality ingredients and packaging that compete in the premium segment at a lower price, according Packaged Facts.
Packaging decisions are vital, and producers must consider — and understand — consumer needs. Shopping preferences can help manufacturers design products that better connect with consumers. Product claims and information on packaging should be highlighted and easy to see.
In April and May, larger pack sizes outpaced smaller sizes, according to IRI data. For example, 10- to 16-oz packs increased dollar sales by 60% as compared with 1- to 4.5-oz packaging, which declined by 12%, for the period ending May 3, 2020.
“A reduction in the overall number of grocery store trips coupled with current economic conditions will cause customers to look for value through multipacks and larger pack sizes,” Ms. Lyons Wyatt said. “Manufacturers and retailers need to ensure they have the right size and price for these consumers.”
COVID-19 led to a shift in shopping behaviors with consumers trying new channels such as click-and-collect, grocery delivery services and traditional ship-to-home alternatives.
“Many who tried it, liked it and will continue to utilize these channels,” said Guillermo Aponte, chief executive officer, Wise Foods Inc., Berwick, Pa. “Snacks saw significant growth through e-commerce. Going forward, it will be imperative to find creative ways to drive impulse purchases through this channel.”
Consumers increasingly look online for snacks and other grocery items during the COVID-19 pandemic. In response, PepsiCo, Purchase, NY, announced the launch of PantryShop.com and Snacks.com, two direct-to-consumer websites where shoppers can order an assortment of PepsiCo’s food and beverage brands.
“We’ve seen incredibly strong demand for our snacks during this time, and snacks.com offers consumers another way to purchase the products they love, delivered right to their door,” said Michael Lindsey, chief transformation and strategy officer, Frito-Lay North America. “Snacks.com provides our incredibly loyal shoppers beloved products like Lay’s Classic potato chips, Doritos Cool Ranch flavored tortilla chips and Flamin’ Hot Cheetos so they can quickly and conveniently fill their pantries.”
A return to pre-COVID snack trends is expected. In the long-term, pent-up demand will reignite consumer preference for the new and different, the unusual.
“Consumers will be bored and tired of reality, and even though potentially financially challenged, they will be looking for new and exciting snacks,” Mr. Vierhile said. “Producers will do well to get ahead of this shift back to pre-COVID trends.”