HOUSTON — Snacking as a lifestyle is a growing trend, and retail and foodservice sectors are adapting to this shift with a rise in convenient, quality offerings.
During the presentation, “Snacking and Special Occasions,” held during the 2024 International Dairy Deli Bakery Association (IDDBA) convention in Houston, June 9-11, Jonna Parker, principal II of the Fresh Foods Client Insights Group at Circana, discussed how Gen Z and millennials have moved towards more frequent small meals and snacks than the preceding generations and how the dairy, deli and bakery industries can capitalize on these new ways of eating.
From a consumer perspective, retail price promotions are less effective than they have been in the past five years.
“That’s not to say people don’t want value,” Parker elaborated. “It’s to say that you need a combination of relevancy of taste and exploration at the right price.”
In response to the current economic situation, the perception of value has decreased foodservice traffic. What Parker dubbed a “barbell strategy” describes how the size of an occasion directly correlates with how much consumers are willing to spend and how value doesn’t solely indicate price.
Post-pandemic trends
There is a record number of gatherings centered around food and beverage as Americans specifically use meal connections as a way to de-stress and unwind.
Consumer loyalty programs and digital deals increased in popularity this year as strategies to boost foodservice traffic. Parker specifically mentioned Starbucks and Domino’s for their digital deals for repeat customers.
“In the foodservice sector, Domino’s combines things together and markets it as a buyback offer,” Parker explained. “If you buy pizza, you’ll get $3 back on next week’s pizza order. It’s this concept of boosting foot traffic by getting people back.”
Foodservice and retail sectors are competitors, but retail is currently dominating almost nine out of 10 eating occasions. However, retail has seen a decline in traditional grocery in terms of total food spending. Inflationary rates have been upwards of 30% since 2019, and Parker emphasized that it was important to consider that consumers are moderating how much they buy in response to this.
“The other big thing that’s changed in the last five years, other than sourcing more meals from home, is that we’re making more trips to more stores,” she said. “Currently, we’re at 214 trips that the average US household makes, [which is] 22 more trips than three years ago.”
Because more foods can be found in more places than ever, consumers have adopted an “I don’t want to waste it” mindset. Intentional shopping has outshined impulse browsing in total store sales.
“People are setting their intention, their situation, their reason for going, and that’s coloring what food they buy,” Parker explained. “These trips are much more focused. We’re doing something, and it has to be adjacent or in that same situation in order to drive that traffic.”
Marketing special occasions
Parker noted the average household celebrates 18 special occasions per year, amounting to six billion food and beverage opportunities.
“These kinds of concepts of gathering around food are more frequent than I think we ever realized,” she added.
Food is anchored with special occasions, and consumers pay attention to merchandising that incorporates this theme.
“This trend of special occasions is popular among Gen Z and millennials to gather around food and have pop-up game nights,” Parker said. “Watch tailgating. Every NFL Sunday is now a special occasion in most markets. These are prime opportunities.”
Tapping into consumer emotion and playfulness are key marketing strategies. People are more emotionally driven to eat, and snacks offer a plethora of opportunities to target consumers specifically.
“What emotional words, what fun words can we use to help people escape?” Parker continued. “That is an emotion you’re giving someone. You’re giving them a new way of eating because you made it emotional.”
Convenient snacking
The traditional “breakfast, lunch, dinner” eating pattern has been replaced with frequent snacking. Parker noted that 46% of American consumers snack three or more times per day and that an overwhelming majority of snacks are sourced from retail.
Consumer behavior currently favors smaller-portion indulging, with a preference to snack in a small-meal way while multitasking.
“One of the things we’ve seen of why the circularity trend in single service is so popular is that it’s eminently snackable,” Parker explained. “You can have these little bites next to you at your desk or as you’re going about your various tasks. That little bite concept counts as a snack, not a meal.”
Quick solutions to hunger are trending upward, and the snack industry has seen an uptick in consumer purchases in direct response, turning into a $214 billion industry overall. To capitalize on this growing trend, foodservice providers should recognize the significance of special occasions and offer snackable products that can be consumed on the go.
