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Snack Industry Remains Strong Despite Inflation

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The snack food industry is “still strong in the U.S.” due to some significant changes, according to Sally Lyons Wyatt, global EVP and chief advisor of consumer goods and foodservice insights at Circana.

Lyons presented “The State of Snack Food Industry: It’s A Snack Journey” education session during the Sweets and Snacks Expo, which runs through Thursday at the Indiana Convention Center in Indianapolis.

Lyons mentioned several factors that will be instrumental in the development of the industry as a whole, including that consumers are “making shifts in where they purchase snacks, but the majority are sourced from home.”

Consumer stoplights

Shoppers are experiencing more hurdles in their personal lives due to several factors, including:

  • Thirty percent higher CPG prices than 2019;
  • Wage growth lags, yet prices increase;
  • Cost of housing shifting;
  • Global conflicts;
  • Increased debt;
  • Savings depletion;
  • Supply chain constraints; and
  • Student loan repayments.

Despite these constraints, however, the “emotional need is the motivation for more than half of snacking and treating eatings.”

Lyons shared that emotional needs are tied to three main moments: favorite routine, “yummy” and “reward me.” Snacking remains an opportunity to bring consumers joy in the midst of chaos.

Shifting gears

Consumers are consistently shifting their preferences and their options. They have “about four eatings of snack foods on a typical day, with kids leading the way,” Lyons said.

She noted that 50 percent of consumers say they “often eat snacks instead of a meal because I am on the go.”

Many shoppers need a quick, fast food source – leading to them indulge themselves as the day progresses. Lyons pointed out that 6-7 p.m. seemed to be the peak time for doing so.

However, lower income consumers have begun to buy more items from mass, dollar and c-stores rather than grocery. 

Different fares

Lyons reported that “price plays a role in snacking decisions, but consumers aren’t cutting back because of [that].”

The State of Snaking found:

  • Eighty-one percent of respondents look for the best value when buying snacks;
  • Seventy-four percent look at the price before making a choice;
  • Sixty-eight percent say that having a low price point is important;
  • Twenty-six percent are snacking less frequently; and
  • Thirty percent also are reducing their “impulse” snack purchases.

Studies show that the popularity of premium snacks and those that are vegan or vegetarian continues to rise. To 56 percent of consumers, it is worth paying more for premium snacks.

While innovation is key at the Sweets & Snacks Expo, Lyons cautioned that products will need to “fight hard” to secure a place. When budgets are tight, consumers typically stick with familiar items.

Brands should be “bold” in their flavors, crafting unique combinations or using fan-favorite flavors. In addition, heat, cheese and barbecue remain at the top flavors across the snack spectrum.

“As consumer behaviors continue to evolve, it’s crucial for brands to innovate and differentiate themselves in the competitive snack market,” Lyons shared.

“By understanding trends, such as the increasing demand for indulgent offerings as a temporary escape from daily stressors, the rise of snacking as a meal replacement due to busy lifestyles, the need for better-for-you snacks to assist with daily nutrition and the importance of on-the-go convenience, brands can effectively tailor their offerings to help consumers find the right balance and meet their evolving needs.”

Read more snacks news from The Shelby Report.

About the author

Sommer Stockton

Web Editor

Sommer joined The Shelby Report in January 2022 after graduating from Brenau University in Gainesville, GA with a B.A. and M.A. in Communications and Media Studies. Sommer is excited to learn about the grocery industry and share her findings with The Shelby Report's readers!

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