Wyatt says such “shelf sensitivities” are important—and tricky—to manage as consumers consider the value of shopping from both physical and virtual outlets. “Many snack segment categories became relatively less sensitive to price during the pandemic. But as of early spring and into June, the trend appears to be changing,” as price sensitivity intensifies, she says.
“There’s an elasticity baked into the consumer mindset when it comes to buying snack products. It’s key to avoid reaching the ‘max threshold’ [on price] because people might opt to trade down,” says Martin of Jack Link’s. “Those consumer stimulus checks are gone, and there’s less income. So we’re tasked with understanding [more intensely] shelf-sensitivity dynamics across our territories.”
“There’s an elasticity baked into the consumer mindset when it comes to buying snack products.”
The onus falls to manufacturers and retailers to “weigh the pros and cons of price increases and timing of execution,” Wyatt says. “With regards to price forecasting, watch for demand to decrease and manage inventory tightly with updated inputs.” She adds that decreased demand will signal that consumers are resistant of higher price points. IRI’s research shows potato chips have yet to become “overly sensitive” to price; tortilla chips are increasingly sensitive; and dried meat snacks—after going through swings—were less sensitive as of late May.
“Other salty snacks” (pork rinds, popcorn and pretzels) continue to increase dollars as a larger percentage of consumers are more receptive to price hikes.