DALLAS — Consumer behaviors, attitudes and buying habits are in flux, and snack manufacturers need to know what’s “in” when engaging in new product development.
During SNX 2024 in Dallas, Circana’s Sally Lyons Wyatt, global executive VP and chief advisor consumer goods and foodservice insights, and Darren Seifer, industry analyst, CPG, food consumption and foodservice, shared key insights about American consumers and snacking during education session What’s New with the American Consumer?
Wyatt noted that American consumers have faced various “stoplights” over the past 18-24 months — such as the 30% increase in CPG prices and stagnant wages despite those price increases — which are impacting how they shop.
“Those two points alone say that the consumer is having to make some changes in how and what they buy, because they don’t have the same amount of money to spend, especially if they’re lower-middle income,” she said.
Despite higher prices, consumers still love snacking
In turn, Wyatt shared that consumers are not purchasing as much as they used to due to cost. Yet, these money-conscious consumers are still intentional about snacking.
According to Circana, 46% of consumers snack more than three times a day. Though that figure is down three points vs. a year ago, there is no change from five years ago. Mobility is a major factor in how consumers snack, especially impacting where the purchase and consume snacks.
Cookies and crackers are in the top five within the snack category. However, tortilla/tostada chips, along with all other salted snacks and yogurt, are seeing both a dollar and unit sales increase as of the 52 weeks ending Dec. 31, 2023.
“Those three have had a slight unit growth,” Wyatt said. “Part of that is driven by the diversity of sizes available but also availability and consumer relevancy. So, those three have done a really nice job at capturing consumers’ attention.”
Where consumers are getting their snacks from is also shifting because of factors such as inflation. According to Circana data, 74% of snacks are sourced from home.
“We started to see that some consumers who were going out to have snacks have started to revert back because they are figuring out it is a little more economical at home,” Wyatt said. “Higher-income consumers who have the means are still going out, and that I think we’re going to continue to see that behavior.”
Where snacks are purchased is also shifting Consumers are moving away from grocery towards value: mass, convenience and dollar stores. Yet, the shift is more for the convenience and accessibility those channels provide, not necessarily the price.
The shifts go back and forth when it comes to package sizing as well, with consumers purchasing more multipacks.
46% of consumers snack more than three times a day | Source: Circana
Generational differences and income impact snacking
Seifer discussed how generational differences and income levels are impacting snacking and purchasing habits.
While Gen Z is pulling away from snacking as they enter adulthood a lack of culinary confidence in cooking at home means they are leaning into other areas such as QSR in the name of convenience.
“When they’re going out, they’re thinking, ‘Well, what can I get that I can’t do from home,’ because they don’t know what to do from home much at all,” Seifer said. “Foodservice becomes a big option for this generation. Note that they’re the only generation where their foodservice spend is outpacing their retail spend.”
Seifer shared that higher-income groups are also shifting their snack spend more towards QSR and away from retail.
“It’s really only the higher-income groups that are able to absorb the higher prices in foodservice than any other group, and that’s why we’re seeing that spend continue to increase,” he continued.
As far as what consumers are eating, Seifer noted there is less interest in better-for-you as a category. However, there is increased interest in foods with wellness attributes in other categories.
“They’re looking to say, ‘How can you make that sweet offering a little bit more permissible for me?’ and it’s the same thing with savory snacks,” he said.
Another key shift Seifer called out a 1% movement towards integrating snack foods into meals. While a small market, with over 350 million people in the US, that 1% shift represents billions of eating occasions.
Pricing is king with consumers, Wyatt shared, with 81% of consumers actively looking for the best value in purchasing snacks. However, a slowdown in category innovation in the last couple of years has hindered growth.
“We’ve seen distribution losses because of some of the shifts going on,” she said, noting the uptick in private label and changing consumer needs as key factors.
By keeping a pulse on the evolving consumer interests and shopping behaviors snack manufacturers can find opportunity when delving into new product development and distribution channels.
