While indulgent sweets are still preferred by many U.S convenience customers, more consumers are spending their snacking dollars on healthier options.
By Howard Riell, Associate Editor
Convenience store operators continue to walk a tightrope, balancing consumers’ love of sweet snacks with their intent to eat healthier.
Still, America’s sweet tooth isn’t going away any time soon. For example, sales of packaged sweet baked goods are expected to grow by a projected compound annual rate of almost 3% to $23 billion in 2019, according to Packaged Facts’ “Sweet Baked Goods: U.S. Market Trends” report.
The larger questions for convenience stores—whose answers often vary by individual location—are which side their consumer base will choose to fall on and by how much, and whether suppliers can provide snacks that satisfy both camps while at the same time offering value.
According to Chicago-based marketing strategies company Mintel Group Ltd, Millennial-aged consumers are drawn to organic snacks and products with added nutrition, including protein and vitamins. “Ultimately,” Mintel noted in a recent report, “affordability is more important to this generation, creating an opportunity for health-focused or organic brands to reach them with low-cost snacking options.”
Mintel’s research found that health plays a strong role in the types of snacks consumers are choosing. Roughly a third of snackers limit their intake of sweet snacks, such as cookies, candy and ice cream.
“33% of all consumers indicate they are snacking on healthier foods this year compared to last year,” the same Mintel report stated. “Not only are consumers eating healthier snacks, about one-third of parents are serving healthier snacks to their children. Members of other race groups, including Asians and Millennials are most likely to be serving healthier snacks to their children.”
Last November, Nielsen reported that 45% of global respondents said that snacks with all-natural ingredients were very important to them. The numbers were similar for snacks with no artificial colors (44%), non-GMO (43%) and no artificial flavors (42%). According to James Russo, senior vice president of global consumer insights for Nielsen, consumers prefer a mix of healthy and indulgent options.
“The demand for better-for-you food and snacks is something we are seeing across the board in the consumer space,” Russo said.
Manufacturers are reformulating products and creating new innovations within the space to meet this need. “As a result, the tide is slowly shifting and consumers are choosing to indulge with better-for-you options,” Russo said.
CONSUMER WANTS
When it comes to sweet snacks, healthier varieties are capturing consumers’ tastes, explained Daniel Lohman, principal of Category Management Solutions in Highlands Ranch, Colo.
“If you look at trends that are driving sales, and when I look at the data Nielsen has been providing to me, sales in almost every category and subcategory are somewhat flat. If you take natural and organic out of nearly every category, sales are declining for the most part.”
Natural and organic, healthy or decadent, snacks seemingly are helping drive in-store sales.
Lori Bell, manager of Grassland Market in Douglas, Wyo., said sales of cakes, cookies and other sweet snacks are on the rise.
“They are right next to our grab-and-go sandwiches and our hot box, so if they want a dessert they can just reach over there and get it,” Bell said. Consumers are single-mindedly looking for indulgent snacks, she has found when tracking in-store sales.
Randy Adams, center store category manager for Martin & Bayley Inc.’s 116-location Huck’s Convenience Stores chain in Carmi, Ill., said that sweet snack shoppers in Huck stores are focused mostly on value.
While Huck’s remains a traditional c-store that appeals to largely traditional consumers, it also tends to skew a little younger. “We’ve got a lot of kids and young moms,” said Adams.
Adams underscored that although the economy remains challenging, consumers are still willing to spend. “I just think it means that they are looking for value,” Adams said. “They want to spend the money where they’re getting the most for their money, and I think that’s where the trend is right now.”
NATURAL INCLINATION
“There are a couple of things that I see,” said Guy Morgano, vice president of 12-unit Warrenville, Ill.-based Pride Stores. “Everything is transitioning into bags right now. I see a lot of bagged snacks with little bigger portions.”
Within its 12 locations, Pride has made a concerted effort to offer patrons natural snack options. One popular offering is KIND-brand granola bars, which include whole nuts, fruits and whole grains that are high in fiber. The emphasis on healthier snacking options is just one of the strategies that executives have put in place to draw a more diverse consumer base into their stores.
C-store shoppers aren’t going to go away from sweet snacking, but they are more likely to read labels than ever before.
“I think the healthier options are going to continually keep popping up and being more important as time moves on,” Morgano said. “We’re actually starting to scratch the surface with the non-GMO products in an attempt to attract a different demographic than in a typical convenience store consumer.”
There are certain segments of new consumers the c-store chain is targeting.
“We’re trying to attract more women and people in general who normally wouldn’t expect to find higher quality product within a convenience store,” Morgano said. “These are the people who just stay out on the forecourt to fill up and don’t even try to come in. We are experimenting with those types of products to try and get people in.”
Pride tries to make shopping the category easier by merchandising sweet snacks together, though stores with different footprints approach it differently, Adams explained.
“We normally try and organize our flow together,” Adams said. “For example, sweet snacks are next to the grocery section, which is next to the candy section. Obviously, most of our candy is wrapped around our registers.”
Going forward, consumers will continue to be split when it comes to sweet snacks—and not just when it comes to indulgence versus health, which means c-stores have their work cut out for them.
“The top snacks are going to be the more gourmet—the more bold, the more robust flavor profiles, which is interesting,” Lohman said. “Consumers now are looking for something more than just a chocolate bar. They are looking for something that is more indulgent. I have seen a lot of growth in indulgent products.”
Adams advised that retailers should concentrate on price first and foremost.
“Focus on the value. Get the value front and center, focus on it. That’s what customers are looking for.”
