The candy and snacks categories weathered several years of change and uncertainty, and the industry continues to feel the effects of the coronavirus pandemic via changing consumer needs and preferences as well as economic pressures. Industry professionals came together for the National Confectioners Association’s Sweets & Snacks Expo last week to discuss these key issues. Experts offered insights and solutions for the brands and retailers that are grappling with how to address these purchasing trends.
What happens to candy and snacks when consumers cut costs?
While inflation has had a significant impact on many industries, food retail has especially felt the effects. However, candy and snacks are a bright light for the channel. Anne-Marie Roerink, president of 210 Analytics, shared vital insights and data about current candy consumers and how to capture their attention.
As the cost of food rises, nearly “everything is on the table right now” when it comes to shoppers cutting down their expenses, said Roerink. But, candy and snacks are still seen by consumers as affordable, permissible treats to seek out while grocery shopping, she added. While candy and snacks have endured inflation, no category is completely immune. Roerink shared that items in the $2 to $3 range are some of the best-performing, and buy-one-get-one discounts are also proving to be popular among candy and snack shoppers.
Kathy Risch, senior vice president of shopper insights and thought leadership for Acosta Group, echoed Roerink’s sentiments that consumers are looking for occasional indulgent food to enjoy during difficult times.
“Dessert, candy, snacks and ice cream—these categories are very relevant,” she said. “People will splurge on items while cutting back on others.”
Another reason why many customers are buying candy and snacks is for celebrations, according to Roerink. After years of canceling or delaying in-person gatherings, these events—like birthdays, wedding events and holiday parties—are occasions when people will buy food and splurge.
Celebrations are inherently social and facilitate moments of sharing; candy and snacks also enable these experiences due to the unique characteristics of these categories to create “very deeply rooted emotional connections,” Roerink added.
But, Sally Lyons Wyatt, executive vice president and practice leader of Circana, also cautioned brands against relying too heavily on price increases and expecting consumers to continue buying snacks at the same rate.
“We are definitely in inelastic categories in snacking, but there may be a point where we go too far,” she said. Instead, she suggested manufacturers focus efforts on some of the parts of the snacking category that have remained strong this year: multipack offerings, tortilla chips and nonchocolate candy.
Innovative products win with shoppers
One other way CPG brands—especially candy brands—are combatting the potential effects of inflation and retaining consumers is through product innovation. Consumers are especially interested in new items from familiar companies, shared Andrew Clarke and Anton Vincent, Mars Wrigley’s global president and North American president, respectively.
“We are seeing consumers vote with their wallets,” said Clarke.
He and Vincent added that some of the innovations that consumers are particularly drawn to right now are better-for-you treats, which was part of the reason Mars acquired Tru Fru and Kind. These brands help fill portfolio gaps, according to Clarke.
“The No. 1 word that floats to the top is ‘fun,’ ” said Roerink. She shared that 6 to 7% of candy sales come from innovation compared to only 2% of overall food.
Millennial and Gen Z shoppers are especially seeking out new products, she added—which Risch also asserted about millennials because they are the “big snackers.”
Sweets & Snacks has always valued innovation with the inclusion of the annual Most Innovative New Product Awards and the display of new products in the Featured Product Showcase. As the industry continues to develop new offerings to meet consumer needs amid inflationary pressure, shoppers will prioritize candy and snack purchases.
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