State of the Industry Report Presented at SNAXPO

March 19, 2012

state-of-snack-food-industry-report.jpgThe rocky road to economic recovery is paved with opportunity, but navigating that road is complex, as nearly one-quarter of consumers struggle to make ends meet. Still, snack frequency is up, and snacks are playing an important role in both wellness-and indulgent-related food rituals. That these rituals are largely playing out at home and from home is a boon to snack marketers, said Sally Lyons Wyatt, executive, client strategy & insights, SymphonyIRI Group in her State of the Snack Food Industry report at SNAXPO 2012 in Phoenix, AZ yesterday.

Lyons Wyatt explained that even though consumers are more conservative, they are snacking more today than they were just a few years ago. In fact, the number of consumers snacking three or more times daily has increased sharply since 2009, and consumers snack even more as they get older.

Snack marketers are faced with huge opportunity as the U.S. population ages, she said. But, snack marketers need to proceed with caution in this fragile economic environment. Value is critical, so finding the right pricing lever is paramount to driving category growth, capturing share of snack spending and retaining and building customer loyalty. Yesterday's strategies are being met with diminishing returns, and a new day is dawning for snack marketers.

Today, 70 percent of consumers are actively looking for the best value when buying snacks, Lyons Wyatt explained, noting that pricing is a top consideration with 36 percent of consumers saying brand decisions are heavily influenced by price. Consumers are perusing a wide range of traditional and new media to get pricing information and are leveraging a mixture of in-store and out-of-store influences, such as shopper loyalty discounts, manufacturer and retailer Web sites, newspaper circulars, and in-store signs/displays. With this mix in mind, snack marketers need to ensure they are communicating a consistent and balanced price-value message across a number of fronts.

"Nearly 90 percent of consumers are trying to eat healthier, and many view snacks as part of their overall dietary plan," she said, adding that consumers want options that will give them energy and provide more better-for-you attributes, such as antioxidants and whole grains, and eliminate less desirable attributes, including calories and trans fat. It comes as no surprise that 66 percent of consumers want retailers to clearly identify healthier products in the store.

It's also important to remember the delicate balance between consumers' overall quest for healthier living and the need for enjoyment and indulgences that don't completely derail dietary efforts, continued Lyons Wyatt. Due to economic pressures, consumers are more frequently finding indulgence in the home, and snacks are a fun and inexpensive way to indulge.

SymphonyIRI Group's research also showed a strong trend of consumers looking for foods that are planet friendly, with sustainability influencing snack decisions. "Consumers want to get back to Mother Nature and protecting the environment," said Lyons Wyatt.