Tips to Boost Snack Sales

Better baked goods, bundling keys to success

Prairie City cinnamon ooey gooey butter cake

Brought to you by Prairie City Bakery.

OAKBROOK TERRACE, Ill. -- Consider any doubts about the blurring of dayparts erased: Snacking is here to stay. Between just 2013 and 2014, global snack-food category sales climbed 2% to $374 billion, according to Nielsen data.  And research firm IRI expects the U.S. snack market will reach $200 billion by 2020.

Millennial and baby-boomer consumers continue to be the primary drivers of growth in snacking. Chicago-based research firm Technomic reports that 31% of consumers say they are snacking more frequently today than just two years ago.  Nearly half of consumers (49%) eat snacks between meals, and 45% replace one or two daily meals with a snack.

And although everyone is snacking more, this round-the-clock style of eating does vary by generation.  Millennials report snacking four or more times per day, while boomers say they snack once or twice a day.

Convenience stores have a unique opportunity to support this all-day grazing. Forty-seven percent of millennials source snacks at c-stores—more than all other locations, including fast-food outlets (39%) and their own homes (33%), according to research from Culinary Visions Panel. Convenience retailers, therefore, are well positioned to capture what some refer to as the fourth—and even fifth—meal daypart.

A Variety of Eating Occasions

Offering a variety of snacks throughout the day, including prepackaged baked goods, can help grow the afternoon snacking business.  According to Technomic, millennials typically snack in the afternoon, between traditional lunch and dinner times. Boomers also snack in the afternoons, but they are more likely to grab something in the late afternoon (47%).

While candy still reigns as the packaged food item of choice for c-store customers, baked goods and pastries are gaining ground.  Fifty percent of millennials report purchasing doughnuts, while 38% buy desserts, 25% purchase muffins and 24% choose other pastry items.

In fact, indulgent snacks are on the rise, even as the health and wellness trend continues.  According to IRI’s 2015 State of the Snack Food Industry report, dollar sales for indulgent snacks, such as bakery items and pastries, increased 3.1% in 2014, compared to an increase of 2.5% for healthier snacks.  A portion of this growth can be attributed to the craveability of these snacks—59% of consumers say they indulge when they snack, and they often do so to satisfy cravings for foods that are salty, sweet, crunchy or crispy.

To meet increased demand for mid-afternoon snacking, and to offer consumers expanded product variety, Prairie City Bakery launched two new flavors of its popular Ooey Gooey Butter Cake—lemon and cinnamon.

“A lot of people automatically think morning when they think of baked goods, but many of our convenience customers stop in stores throughout the day, and they are looking for products that are better quality,” said Bill Skeens, founder and president of Prairie City Bakery.

In fact, according to IRI, although 81% of consumers report eating bakery snacks, a significant portion consume these items in the afternoon, evening and for special occasions or entertainment—especially millennials.

And those younger consumers in particular want high-quality, indulgent items that taste fresh but won’t break their banks. “Even though many millennials cannot afford to indulge all the time, when they do treat themselves, they spend their money and calories wisely and want a great quality product,” said Skeens.

In addition to the butter cakes, Prairie City has expanded production of its fudge brownies and recently introduced a butter-and-chocolate-swirl-flavored pound cake as well as smaller pieces of snacking fudge. The company also reformulated its 3- and 4-ounce cookies to remove trans fats.

Packaging and Positioning

Switching to clear packaging has helped Prairie City send a message of freshness and transparency—something millennials in particular look for in their food and the brands they support.

“We follow the WYSIWYG philosophy—what you see is what you get,” Skeens said, noting that the new packaging allows consumers to clearly see the baked item they are buying. Even the graphics are kept to a minimum, and the cookies have their labels placed on the back. “We believe people eat with their eyes first.”

Positioning bakery snacks next to the coffee station or at the front register helps drive impulse sales.  Additionally, Prairie City has helped its customers expand their bakery-snack variety by offering new racks that hold more product without taking additional counter space.

Cater to the Fifth Meal

Replenishing bakery snack supplies, as well as coffee, throughout the evening can also boost snacking sales.

While some consumers regularly enjoy an afternoon “fourth meal,” many also have a fifth meal, or snack, after dinner. And according to Technomic, boomers snack more than millennials after dinner (42% vs. 35%), while 37% of millennials snack even later at night.

Students and night-shift workers make up this later-night snacking group, Skeens said, but for retailers, it can be an opportunity without limits. “More people in general seem to be snacking or grazing throughout the day and into the evening,” he said.

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