What’s Driving All That Snack Sales Growth?
Snack foods grew dollar sales 3.5% in 2015, which outpaced total retail sales of consumer packaged goods (3.2%) and total food and beverage sales growth (2.9%), according to research from SNAC International (formerly the Snack Food Association) and Chicago-based IRI.
The diverse sizes of snacks, innovation, intriguing flavor mashups and retail/online channel efficiencies—all combined with dynamic tiered pricing inducements—led to an upward trend of dollar sales and, to an extent, units.
For 2016, trends to keep an eye on include the influence kids will maintain on parents’ snack choices, the importance of overall variety, retail channel/online shopping factors, ingredients and claims, and what Sally Lyons Wyatt, executive vice president and practice leader of client insights for IRI, called the “spectrum of opportunity.”
Making her remarks during a webinar sponsored by IRI and SNAC International, Wyatt said this spectrum is marked by the role of CPGs manufacturers and retailers to:
- Explore advantages of understanding where your portfolio of products fall within a nutritional segmentation;
- Determine the most efficient and effective way to engage with your target consumers along the path to purchase; and
- Identify personalization to key consumers and ways to deliver tailored shopping experiences.
Price tier management is essential.
Premium snacks have become a priority—outpacing growth of low- and moderately priced snacks. This included the surprising uptick of premium private-label brands. Because price points are higher with premiums, this placed a drag on unit sales in some snack pockets. For all macro snacks, unit sales fell 0.4% for 2015. While premium snacks are showing teeth, Wyatt said 74% of consumers still view price as influential in their decision-making, while 82% look for good value.
“Pay attention to price” because while premium is strong, people who depend on lower-priced snacks need viable options, said Wyatt. “Have a strategy for all three tiers—a balanced approach across assortment and pricing.”