Consumers have, for the most part, eased up on the hoarding from the pandemic’s onset, but as many have shifted to more eating at home, stocking up has become a habit, and that’s causing changes in what’s available — where — and at what cost.
“I would say in the past month, many people are going to different stores and buying in different channels,” said Jorge Izquierdo, VP of market development for PMMI. “They’re relying more on things like e-commerce for access to specific products that are harder for them to find. In some cases, they have to replace brands they’re used to with other brands because of availability.”
Parker noted that as many consumers have settled into a work-from-home lifestyle, consumption of products like breakfast muffins have moved from the coffee shops to the kitchen table. That has triggered increased sales in club and big-box retailers, with a few implications in terms of the perceptions surrounding price and availability.
“The main motivator in the super center or club channels is that when you buy something like baked goods, there’s a perception of saving money just by walking in the door,” Parker said. It also provides an opportunity for stocking up, she added.
This is reminiscent of the Great Recession, especially in terms of how consumers are willing to accommodate for inflation and why they may not even notice elevated prices on certain items. If they’re used to picking up a muffin at the coffee shop, and now they’re picking up a bulk pack from the club store to enjoy at home, it’s a cost savings, even if those prices went up at the store. Not to mention, it’s an indulgence worth spending for.
“In the Great Recession, lower-cost discretionary spends that gave a feeling of happiness increased,” said Robert Berg, founding member of Iridescent Data. “When you have a small amount of money — a two- or three-dollar difference — you can treat yourself.”
With a perceived savings baked in, club stores obviously experienced growth during the height of the pandemic, and with price and availability so top of mind in the supply chain crisis, that momentum is apt to continue.
While longer lead times are forcing commercial bakeries to wait for raw material resources and equipment installations, consumers who are used to omnichannel-style instant gratification may not be as patient.
That said, NielsenIQ sales data isn’t reflecting much of a backlash, with products like muffins and dessert bars showing double-digit growth (16.2% and 12.8% respectively) in dollar sales for the 52 weeks ending Jan. 1, 2022, and the overall sweet snacks category experiencing 5.5% growth for the same time period.
When consumers have time to react quickly while bakery and snack manufacturers scramble to keep up, brand loyalty shifts may not be as conspicuous … for now.