C-Stores Steal Share of Snacks
Overall category experiencing seesaw of dollar increases, volume decreases
CHICAGO -- The convenience store channel has had a little help from consumers in increasing its share of snacking dollars. According to SymphonyIRI Group, increased demand for on-the-go snacks and continued decrease in pantry stock-up missions helped c-stores see a 0.9% increase in volume sales in 2011 and 6.3% increase in dollar sales.
Less than 1% may not be much to boast about, but the recession and commodity costs didn't do consumer packaged goods (CPG) snacks many favors last year. According to the recent webinar State of the Snack Industry from the Chicago-based research firm, the grocery channel saw snack dollar sales increase by 3.3% but decline by 1.5% in volume. Walmart saw a dollar sales decline of 0.9% and a volume sales drop of 4.5%.
What's more, c-stores saw gains across the majority of snack subcategories, from yogurt and crackers to chocolate candy, ice cream and salty snacks. The only subcategory that remained flat was pastry/doughnuts.
But c-stores weren't the only retailers to see gains. Drug stores saw a 5.7% increase in dollar sales and a 1.2% increase in volume sales--thanks again to that decline in pantry stockup missions.
C-stores likely got another boost from the 54% of consumers who say they seek snacks that can be eaten on the go--up from 40% in 2010.
Sally Lyons Wyatt, executive, client strategy and insights, SymphonyIRI Group, who led the webinar, attributed the disparate volume and dollar sales movement to rising commodity costs, inflationary pricing trends and a decline in promotional activity.
"Promotional support is on a negative trajectory," she said. "That's influencing pricing trends and will continue to do so."
Despite rough volume sales numbers, SymphonyIRI Group reported that snack frequency is up from 2009 numbers.
"The major contributor is the way consumers approach eating today," said Lyons Wyatt.
In the past three years, the percentage of consumers who reported snacking one to two times per day declined by 20%, while those reporting snacking three to four times a day increased by 19 percentage points. The percentage of consumers snacking five to seven times a day increased as well, and the share of consumers not snacking at all dipped from 3% to zero.
Snacking is up throughout the day, with the majority of snack occasions occurring in the afternoon.
Lyons Wyatt did offer a handful of growth opportunities for manufactures--and to an extent, retailers--to push sales northward:
- When asked whether $1 is the breaking point for a snack, consumers were nearly split down the middle, so understand the different perspectives around pricing of immediate-consumption snacks.
- It's not all about indulgence; 56% of consumers seek snacks that provide an energy boost, while 78% seeks snacks that are filling or provide sustenance. So understand how snacks play into consumers' quest for hunger satisfaction.
- Different snack subcategories satisfy different needs. The No. 1 item consumers look for when trying to satiate their hunger is a snack/granola bar, while ice cream/sherbet is the top pick for consumers seeking an indulgence. So understand how the role of each type snack drives decision-making.
- Healthy snacks are increasingly important, with 64% of consumers stating they want comments or symbols on packages to help easily pick out healthier items. Further, healthy attributes such as no trans fats, fresh/unprocessed, whole grains, low fat, high fiber, all natural ingredients, low calorie, no preservatives, low sugar and low cholesterol have not waned in the past four years, so keep them on your radar.
And yet, 38% of parents reported will compromise on nutrition to save money, an increase since 2009. Lyons Wyatt advised prudence when putting a price on health. "There's a balance to be struck between nutritional health and financial health," she said.