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01/20/2021

It's Snack Time!

It's Snack Time!
Consumers — particularly Gen Z and Millennials — have an insatiable appetite for new products in the snack aisle.

The pandemic has been good to the salty snack category. Category growth in the segment outpaced all other snack categories during the COVID-19 outbreak as consumers stocked up on their favorite comfort snacks during lockdown. In fact, retail sales data from IRI and the Frito-Lay Snack Index indicate that salty snacks have been the No. 1 growth food segment since March.

Consumers found comfort in indulgent snacks in the time of COVID. Demand for Frito-Lay legacy brands has spiked over the past several months, with Lay’s up 32% and Tostitos up 42%. Mega-brands in the indulgent snack segment will continue to generate excitement with new and limited-edition flavors and impactful seasonal displays that create dependable lifts in sales.

“Snacks provide a bit of accessible excitement during difficult times,” affirms Beth Bloom, associate director, U.S. Food and Drink Reports at Chicago-based Mintel. According to Bloom, more than a quarter of salty snackers say that they’re “always on the lookout for new flavors.

“New flavors and formats can provide an enjoyable change of pace and sense of agency when other life factors feel beyond your control,” she adds. “Leading into the pandemic, 38% of salty snackers who reported increasing their snack consumption in the past year attributed it to a better variety of flavors.”

Bigger flavors, more flavor and sweeter profiles are keeping consumers engaged. “Heat continues to be a snack favorite, with flavors like Spicy Tabasco, Ghost Pepper, Jalapeño Sizzle, Spicy Chili and Zesty Buffalo,” notes Sally Lyons Wyatt, EVP and practice leader at Chicago-based IRI. “Lime is hitting shelves with twists of lime and jalapeño lime. We have also seen the intersection of sweet and spicy like Mango Habanero, Honey Jalapeño, and Sweet & Hot.”

Customers Crave Variety

Industry experts expect more growth in sweeter flavor profiles this year as consumers develop a taste for snacks that combine sweet and savory flavors.

The focus on variety isn’t likely to end any time soon. Consumers — particularly Gen Z and Millennials — have an insatiable appetite for new products in the snack aisle. Nearly 40% of younger consumers say that they’re likely to try a new snack option. Mintel research shows that the largest majority of salty snack consumers eat three to four types of snacks in the category, and one in five eat five or more types. That leaves room for plenty of innovation.

Post-pandemic, experts predict a renewed focus on healthy snacking. Premium and innovative brands have been gaining ground even at traditional outlets, and better-for-you snacks with simple ingredients are becoming a bigger part of the category.

Better-for-you snacks, such as Hippeas chickpea-based products, have been gaining traction with more growth expected this year.

“Consumers are more discerning now than ever over their health, and the brands that deliver against these needs will win,” says Lynn Hemans, VP consumer intelligence and strategy at The Hershey Co. Pennsylvania-based Hershey, which has already acquired the maker of Skinny Pop and the Pirate’s Booty, Smart Puffs and Original Tings brands, is likely to take a deeper dive into the snack segment in the future.

The Return of Better-for-You Snacks

“Signs point to the desire for consumers to adopt better habits once the threat of the pandemic wanes,” says Bloom. “Health-focused snacks have been driving much of the growth in the salty snack space, with strong increases seen in high-protein snacks, low-carb cheese snacks, veggie-based snacks, bean snacks, and snacks using alternative grains.” Mintel research shows that 35% of salty snackers who reported increasing their snack consumption in the past year attributed it to the availability of healthier options. 

Charles Coristine, president and CEO of LesserEvil, the Danbury, Conn.-based snack manufacturer of organic popcorn, Veggies Sticks, Power Curls and Paleo Puffs lines, is convinced that consumers will continue to seek products with less processing that offer a variety of flavors. To keep snackers engaged, LesserEvil has introduced a series of hot, seasonal items. 

“This past year, we’ve been committed to thinking of fun flavors that correspond with the time of the year,” says Coristine. “Customers loved our Sweetheart Popcorn for Valentine’s Day, our three different citrus flavors for summer popcorn, and our festive flavors for fall and the holiday season.”

According to Coristine, this year, LesserEvil is adding a Fiery Hot flavor to its Power Curls line, and introducing a line of snacks specifically for toddlers, Lil Puffs. The company is also at work on plant-based protein initiatives.

“Most of the new products that are entering the market are plant-based,” observes Rachel Krupa, founder of The Goods Mart, a better-for-you convenience store located in New York, and a consultant for the category.

More Flavor, Fewer Ingredients

The Snack Brigade, the Columbus, Ohio-based manufacturer of IncrediPuffs, is also bringing exciting new flavors to the market. The company recently introduced an Elote Mexican street corn flavor as well as a holiday Hot Cocoa and Marshmallow flavor, and is launching an Apple Pie flavor at Keasbey, N.J.-based Wakefern Food Corp.’s ShopRite stores in February.

“Limited-edition drops provide retailers an opportunity to always offer something new,” explains Andrew Ford, VP of sales and marketing at The Snack Brigade.

Ford sees more upside for better-for-you snacks. “Consumers are smarter and smarter. They want more plant-based and premium ingredients,” he says. The brand, which launched in Meijer and is now carried at a number of major grocery chains, recently boosted the nutritional profile of its puffs by substituting a combination of corn, sorghum and navy beans for potato. According to Ford, the company makes products that offer consumers healthier versions of traditional snacks.

New flavor profiles, like IncrediPuffs' Elote Mexican street corn variety, are keeping consumers engaged.

“Our customer is definitely looking for a better-for-you option for snacks they grew up with,” says Krupa, of The Goods Mart. “They are looking for the flavors they remember, but don’t want to put all the junk in their body. And they don’t want to compromise health for flavor. The smaller brands entering the market have ... nostalgia, flavor and better-for-you ingredients.”

New packaging options are also creating new opportunities in the category. Hershey’s Hemans says that at-home cocooning is impacting sales as more consumers enjoy snacks with their families. “Microwave popcorn is seeing double-digit category growth with SkinnyPop, the fastest-growing brand,” she notes. Variety packs that help satisfy all needs in the family, adds Hemans, are a way to build sales.

Mintel research confirms that shoppers indeed want variety packs. Multiple snack types packaged or bundled together are not only an opportunity to boost sales, they also entice trial. And since portability is a key driver for increased consumption, brands that offer packaging or are forging connections with on-the-go opportunities will be brands to watch.

Santa Monica, Calif.-based Hippeas, maker of organic chickpea snacks, produces a multipack featuring its Vegan White Cheddar sold at Whole Foods, Kroger, and Stop & Shop. “We also make variety packs of both our puffs and tortillas that can be found on Amazon,” says Lindsey Valliere, VP of marketing for Hippeas.

The Merchandising Impact

While competition from new channels has increased, data from the Frito-Lay Snack Index shows that 74% of consumers still largely prefer in-person shopping for their favorite snacks. Merchandising is critical to generating trial, impulse purchases and an overall boost to the category’s bottom line.

“Merchandising can definitely make a difference,” says Krupa. “We are constantly moving items around to see to how customers gravitate towards them.  Products at eye level always outperform, but when you put a new similar product next to a crowd favorite, you can make the new product pop.”

“It is very important for brands to set themselves apart at store level,” notes Valliere. “We create unique shippers that coincide with our marketing initiatives throughout the year. Our VW Bus displays will be in stores throughout the summer as a part of our Summer of Love program.” Valliere adds that the brand can also be found in checkout lanes and tied into thematic displays located in the front of the store.

Display-ready case packs remain a winning merchandising vehicle. “Whenever we can get product off shelf and create something that a customer has to move around, it increases sales,” notes Ford.

An additional angle to watch going forward are purpose-driven brands. “Increasingly, consumers care about what brands are partnering with, and soon companies won’t be able to get away without those alliances,” says Ford. In a good example of this trend, The Snack Brigade has teamed up with Kids in Need to provide school supplies to underprivileged children.

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