4 Ways C-Stores Can Attract the New Snackers

CHICAGO -- What's really driving snacking trends, and how can convenience-store and other retailers “interrupt consumers on their path to purchase and get them into the store to buy the snacks”?

Sally Lyons Wyatt, executive vice president and practice leader for consumer and shopper insights for IRI, provided answers in a State of the Snack Industry 2016 presentation at the Sweets & Snacks Expo in Chicago.

“Consumers have changed their eating habits, and they are consuming smaller meals throughout the day or snacking throughout the day,” she said. “Foodservice has really grabbed on and has been able to add things in quick [service] and limited [service] that are really outpacing what we’re doing at retail.”

Quick-service restaurants (QSRs) are focusing “on what the consumer is doing, from how they’re eating, where they’re eating--those demand moments. Who they are, who they’re with and what time of day it is. And they’re able to zero in and get them while they’re in their car and on the go.”

But there is good news, Wyatt said: “There’s tremendous growth in retail as well.”

Convenience stores have done a great job with candy and snacks, Wyatt said. The channel’s compound annual growth rate (CAGR) is 4.7%. The dollar-store channel’s CAGR is 7.5%, and the mass-merchandise channel’s CAGR is 3.1%. Consumers have gravitated to value and convenience.

Consumers have told IRI over the past 10 years that they are snacking more. They now are eating 2.7 snacks per day on average, she said. “What was amazing about 2015 vs. the past is that … 46% of consumers were snacking three-plus snacks a day," she said. "That is almost half of the U.S. population. … That was up five points vs. one year ago. “

She continued, “We will hit a tipping point. There will be a point in time where this plateaus, but still, just to know that … you have a huge universe to play in, and that consumers are absolutely gravitating to snacking.”

Wyatt offered several key trends that convenience stores can use to help capture those snack purchases.

Photo: National Confectioners Association (NCA).

Since 2010, there has been a “huge jump” in snack consumption in the early morning, Wyatt said. In 2010, 7% of the U.S. population was snacking in the early morning (5 to 8 a.m.); in 2016, it is almost 20%.

Snacking day-parts are stabilizing. There were two, however, that saw some change, creating opportunities. Early morning had an increase, and evening saw a slight decline. “So it just shows you that snacking is pervasive around the day, and there is more going on in early morning than in years past,” she said.

Households with kids are driving the trends in snacking. Twenty-eight percent of households say they are snacking more frequently if there are kids in that household; 34% are looking for snacks that can be eaten on the go or in the car. That makes sense, said Wyatt, “because that’s where most of us with kids spend the majority of our time: running around in the car taking them to different activities, no matter what the age of the child is.”

But the households that are especially driving snack trends are the ones with kids 5 and younger and teenagers. Age “makes a difference in their needs, their demand moments and also what they’re telling us and they’re buying,” she said.

Households with kids ages 6 to 18 are looking for traditional salty snacks, as well as some extended snacking categories: frozen pizza, frozen appetizers, refrigerated baked goods, meat snacks, doughnuts, pastries and bars. But for teenagers, breath fresheners and nonchocolate candy come into play. They also want chocolate-covered salty snacks, ice cream, soups, rice cakes, cookies and refrigerated dips. “It’s a whole different set,” she said.

Retail is not losing the game to QSRs, Wyatt said. It “is playing the game with a different assortment” of snacks and packaging. Produce as a snack--vegetables with ranch dip or the apples with caramel--is growing in popularity, she said. She cited the McDonald’s Happy Meal and Starbucks' protein Bistro packs. “With those, there is just more assortment and more availability to the consumer … which is impacting us at retail,” she said. Adding these snack packs “is going to be a big winner” for retailers, she said.

IRI looked at both variety packs and multipacks. Variety packs are multiple different brands or flavors packaged in one large container. Multipacks are quantities of the same brand and flavor in one large container. The popularity of variety packs is rising, while that of multipacks is “relatively flat,” she said.

“What we’ve seen is a plethora of unique flavor fusions that are happening, but not necessarily in those variety packs,” said Wyatt. “That could be an opportunity for the industry to put these variety packs in with at least one new flavor combination that you haven’t had a trial on. It is a great opportunity to really drive trial of some new flavors and new options.”

Refrigeration became a big theme of 2015, because consumers are on a “quest for fresh,” Wyatt said. They have a desire for transparency; they want to know more about where the product was manufactured and where the ingredients were grown. To the consumer, refrigerated items have that “halo of fresh” around them. But at the same time, the popularity of chocolate-covered salty snacks has grown. “So we’ve seen a lot of those trends that are pointing toward the quest for balance,” she said.

Consumers are looking at snacking to help them in multiple ways: providing health and nutritional benefits, vitamins and minerals, fiber and protein, or as a way of getting different forms of fruits and vegetables. “We saw a lot of new introductions that were plant-based proteins, or going after those really hot-commodity-type ingredients,” such as lentils, chia and quinoa going into different forms and flavors, she said. “So whether it protects them from cancer, or lowers heart disease, or weight loss, there’s a lot of different reasons consumers are gravitating toward snacks that can really help them from a multitude of woes.”