Stay-at-home orders during the COVID-19 pandemic have supercharged Americans’ love for indulgent treats, according to new research and sales spikes reported by snack and confection giants. As consumers return to work, vending and micro market operators can ride this wave by ensuring the right mix of tried- and-true favorites and novelties.
What’s driving snacking to be a pandemic pastime as social distancing, health concerns and economic uncertainty stretch on? The consensus is that consumers — as is historically the pattern in times of crisis — turn to salty and sweet indulgences for comfort and an escape from stress. It’s also a way for families to share a simple pleasure with entertainment, social gatherings and dining-out options limited.
Economic uncertainty also has consumers splurging on small indulgences, and snacks and confections certainly fit the bill. With people spending more time at home comes more grazing and round-the-clock eating than usual.
By the numbers
Snack food consumption has increased by 8% during the pandemic as consumers seek comfort through savory and sweet snacks, according to The NPD Group’s Snack Food Behaviors in Challenging Times study. During the Great Recession, between 2008 and 2010, snack foods increased by only 1%.
“The roles of comfort and enjoyment are likely more important to snacking now compared to during the last recession given the dual stressors of financial and public health concerns,” Port Washington, N.Y.-based NPD said in its report.
In April, during the height of the shelter-at-home orders, 37% of consumers told NPD they wanted to make sure they had sufficient snack foods on hand. They said they were well-stocked on salty snacks and frozen sweets more than other items.
“We’ve seen consumers turn to indulgent snack foods in other challenging times, and although history isn’t repeating itself during COVID, it is rhyming,” said NPD food and beverage industry analyst Darren Seifer. “Although we can’t predict what’s going to happen in the future, I think it’s safe to say snack food manufacturers and retailers can expect elevated snack food usage while COVID-19 restricts our restaurant usage and overall movement, in particular school closings and work-from-home orders.”
Chicago-based snack giant Mondelēz International — maker of OREO, RITZ, Cadbury chocolate and TRIDENT gum – had a strong first quarter in 2020 as snacking increased amid the coronavirus pandemic. Net revenues of Mondelēz’s North American business were up 15% in first-quarter 2020 from the previous year.
During the 17-week period that ended on June 27, consumers bought $3.7 billion worth of chocolate, a 6.3% increase from the comparable period last year, according to Nielsen data. PepsiCo also reported that its snack sales rose in the second quarter. Sales for the Frito-Lay division climbed 7% in the period, while Quaker Foods’ revenue increased by 23%.
From minimal travel and socially distanced gatherings, to when, where and how consumers shop for snacks, consumer behavior is likely to have a lasting impact on the months ahead, according to Purchase, N.Y.-based PepsiCo’s latest edition of its U.S. Snack Index.
“Since the onset of the pandemic, what we eat, where we buy, and how we engage with one another has shifted dramatically, and we’ve had to reorient our business to address this,” said PepsiCo Foods North America chief executive officer Steven Williams. “Our ability to remain agile at the most critical time has enabled us to successfully meet consumer demand.”
PepsiCo found that as people continue looking for some level of normalcy, many are turning to snacking. The Frito-Lay Snack Index found 85% of respondents said eating their favorite snack makes them feel “normal.” The overwhelming majority (83%) said their favorite summer snacks remind them of good times and nearly half (48%) said eating their favorite snack makes them feel happy.
IRI retail sales data also shows salty snacks have been the No. 1 food item that’s contributed to sales growth at retailers since early March, when consumers were shifting purchasing priori- ties amid stay-at-home orders for various states.
The Frito-Lay U.S. Snack Index survey data also revealed many consumers are still trying new snacks, with 92% saying they plan to continue to eat them once the pandemic is over, and about one-fifth of respondents reporting they are developing new rituals around food.
The most willing groups to try a new snack in the “new normal” skew younger. Gen Z and millennials tend to be the most adventurous with nearly four in 10 surveyed (36%) saying they are likely to try a new snack option.
When choosing snacks to enjoy during the summer, Americans consider several important factors, according to the survey. The top deciding factor is convenience (86%), and staying true to favorites (83%), with only 22% of respondents taking budget into account.
COVID's silver lining
Snack and confection powerhouse Mondelēz reported that it has seen a significant increase in demand and sales across its retail channels (grocery, mass, drug, value and club) as a result of the COVID-19 crisis. The majority of its cookie, cracker and confection brands have been outperforming the same period prior year, according to Malcolm McAlpine, Mondelēz business manager for branded snacks and confections. One reason for the surge in demand for sweet and salty treats is that consumers have been stocking up on these items, which are shelf-stable with a relatively long shelf life.
“The most significant trend is that consumers want and demand the brands they know, love and trust — the ‘comfort’ factor,” he observed. “As a result, retail sales have spiked during the current crisis. Prepackaged snacks are also perceived to be ‘safer’ than those items that are not.”
New from Mondelēz, piggybacking on the successful launch of its TRIDENT VIBES gum in bottles, are Spearmint Rush and Tropical Beat varieties in a 12-piece peggable pouch that are ideal for both vending machines and micro markets. And expanding the iconic RITZ Cracker brand are Cheese Crispers Original Cheddar and Four Cheese and Herb, available in 2-oz. bags.
“It’s all about the comfort factor and the perception of trust in major brands,” McAlpine concluded. “As people slowly return to their places of study and workplaces, they will demand these types of snack offerings.”
Jack Link’s®, based in Minong, Wis., is another popular snack brand with a prominent presence in vending machines and micro markets. Meat snacks appeal widely to consumers as a healthier, protein-rich meal replacement on the go. Continued shifts in behavior amid COVID-19 could bring convenience service operators more opportunity in this category as the sites they serve reopen for business.
“We are seeing COVID-19 shaping the state of snacking in c-stores and micro markets in an interesting way — easy-to-grab snacks,” said Jack Link’s® brand senior director Stephanie Leibke. “The micro market customer is looking for compact and delicious options that keep them full in lieu of eating three meals a day, such as Jack Link’s Beef Jerky, Beef Sticks and our Jack Link’s Cold Crafted® line of products. As some stores have reduced their prepared foods, and pre-packaged refrigerated items such as meat and cheese snacks have benefitted from people seeking chilled options.”
Jack Link’s recently expanded its Jack Link’s Cold Crafted products with the introduction of Linkwich® fully refrigerated snacks that pair sliced hard or genoa salami and Wisconsin-made cheese. “Our customers were looking for convenient, portable protein and these offerings are like a breadless sandwich that will fill you up on the go,” Leibke explained.
She added that Jack Link’s products appeal to consumers as they continue to seek ways to incorporate better-for-you snacks into their on-the-go lifestyles because most are made with 100% beef, are a good source of protein, and have no MSG, nitrates or preservatives.
When consumers seek new flavors, heat is one of the main players, Leibke observed. Jack Link’s Sweet Habanero Beef Bars and Spicy Chicken Bars are among the newer surefire favorites of consumers looking to spice up their snacking. Jack Link’s also continues to expand its Beef Bar lineup, made with slow-smoked, dried and seasoned beef in Original, Teriyaki and Cracked Pep- per flavors. It recently unveiled a pair of new beef bar flavors — Sweet Habanero and Blackberry Barbecue — and a new Chicken Bar in Rotisserie flavor.
Cookie maker Biscomerica Corp., based in Bloomington, Calif., has seen sales climb in grocery, club store and online office supply since the start of the pandemic, according to Biscomerica vice president of sales and marketing for vending and foodservice Kathy O’Brien.
“Biscomerica’s sales are down in vending during the pandemic, but only about half of what the industry standard numbers for decrease has been reported,” O’Brien reported. “One of our largest customers confirmed that their cookies sales were not down as much as the rest of the mix. I think playing in is the sanitization factor in light of the pandemic, with sealed single-serve packages in more demand, along with a shift from a healthy focus to comfort and indulgence.”
An extra bright spot amid the pandemic shutdown is Biscomerica’s Sweet Serenity bite-size premium chocolate chip cookies in 2-oz. and 3-oz. bags, with sales up 8% year to date in vending and micro markets. Biscomerica launched the line in early 2016 and refreshed its package design late last year.
“It’s our entry to chocolate chips cookies, which are just always a favorite among cookie eaters,” O’Brien commented.
Biscomerica’s long-established vending and micro market favorites include its bite-size, premium 2-oz. Knott’s Berry Farm fruit-filled short-bread cookies, Sun-Maid oatmeal rai- sin apple cookies and its value-priced Basil’s sandwich cremes in a 5-oz. tray.
Dot’s Pretzels, with headquarters in Velva, N.D., reported that it has experienced a spike in sales since the COVID-19 lockdown with people staying at home and snacking more.
“With families staying home and spending more time together, this provides the opportunity for individuals to enjoy their favorite snack items more because they are not able to attend any outside events or activities,” said Dot’s Pretzels marketing specialist Emma Pierce. “We have been told that our pretzels have turned into people’s favorite COVID snack! Our individual-sized bags provide an easy way to safely enjoy snacks while essential workers are on the go.”
The new 2.5-oz. vending size pretzel bags in original flavor have helped fuel sales and its newest flavor, Southwest Style, will soon join the vend-size lineup. Both varieties are also available in 5-oz. and 16-oz. bags and Pierce said other new snack items are in the pipeline.
“People are going to be looking for more individualized snack bags to stay safe during the pandemic,” she observed. “Also, we believe that people will be doing more online ordering opposed to getting snacks from brick- and-mortar stores.”
As employees make their way back into their workplaces, convenience service operators have an important role to play by delivering the comfort and indulgence that sweet and salty treats have brought them through the quarantine as they settle into a new normal. At the same time, the heightened demand is an opportunity for operators to accelerate sales as they rebuild the business lost during the shutdown.