Are Specialty Snack Shops a Threat to C-Stores?

Three in four Americans willing to pay extra for snacks with high-quality ingredients

specialty snack shops

CHICAGO -- As Americans move away from traditional meal occasions, snacking more throughout the day, consumers are seeking healthier snacking options. This trend is seen largely as a boon to convenience stores.

Three in four (73%) consumers are willing to pay extra for snacks made with high-quality ingredients, according to new research from Mintel, Chicago. And further evidence of their desire for healthful foods, half (50%) of consumers say healthier snacks would motivate them to buy more from specialty snack shops, instead of a c-store or grocery store.

With snacking now ubiquitous, more than three in five (64%) consumers agree that snacking is necessary to get through the day, including 77% of millennials, who are the most likely generation to visit specialty snack shops (85% vs. 68% of consumers overall). And while 60% of Americans visit snack shops on a mission to treat themselves, millennials are more likely to be motivated by healthy snack options (68%).

An extra boost of energy also is a motivator for millennials, as two in five (38%) dine at snack shops for energy compared to one-quarter (27%) of consumers overall.

Despite high levels of interest, specialty snack shops face stiff competition from retail: two in five (41%) consumers, including 63% of millennials, agree that packaged snacks from grocery stores are better than items from snack shops. Recognizable brands also play a role when choosing snacks, as seven in 10 (69%) consumers say snacks with branded ingredients prove to be higher quality than other snacks. Moreover, seven in 10 (71%) millennials say snacks are best eaten while on the go.

“Snacking is now a staple of the American diet, and as consumers snack more often, they are looking for healthier ways to indulge with high-quality ingredients. By including healthier snacks on menus, shops can expand their appeal beyond millennials, America’s primary snacking generation,” said Diana Kelter, foodservice analyst for Mintel. “Snack shops are in a great position to promote themselves both as a destination for the occasional treat and a quick stop for eating on the go. To further compete with the dominant retail snack market, specialty shops should have prepackaged options available for consumers, as well as partner with recognized brands to offer branded snack fusions.”

Customization presents an opportunity for specialty shops to differentiate themselves from retail competition, especially when targeting parents. Indeed, more customizable snacks would motivate 30% of parents to more frequently visit snack shops (vs. 18% of nonparents). A similar number of parents (28%) are interested in more snacks with unique flavors (vs. 17% of nonparents). Overall, one-third (34%) of parents would be inclined to visit snack shops more often if they included more snack options for children.

Deals and value offers are key motivators for consumers to visit specialty snack shops instead of opting for the convenience of retail offerings. Mintel research reveals that snack shops can attract new consumers and reward regulars by offering loyalty programs, which motivate 37% of consumers to visit more often.

When unveiling new menu items, promotional pricing motivates 35% of consumers, including two in five parents (39%). And in line with millennials’ interest in going to shops to enjoy a snack with friends and family (39%), two in five (38%) would visit snack shops more often if they offered social-themed promotions such as happy hours.

“Thanks to the inherent social aspect of snack shops, they have a unique opportunity to focus on the happy hour model to encourage group gatherings,” said Kelter.