How Retailers Can Make the Most of the Sweets and Snacks Renaissance

Intriguing innovations, transparency efforts among manufacturers and advances in e-commerce are giving retailers new opportunities to satisfy shoppers’ cravings for snacks and confections.

While it may seem counterintuitive to consumers’ move toward healthier eating and fresher ingredients, numerous studies have found that Americans are snacking more than ever before. According to The Hershey Co.’s Experience and Convenience in a Shopper’s World report, the average consumer’s snacking is a whopping 25 occasions per week. Data from the National Confectioners Association (NCA), meanwhile, shows that snacking is the second-largest consumable category and confectionary is the fourth, with snacks and cookies accounting for more than $51 billion in retail sales and confections at more than $35 billion.

Also, the candy, mint and gum category remains the most frequently eaten and largest snack segment in the U.S., according to Hershey; it also boasts the second-shortest purchase cycle of all snacks at approximately 10 days, and an impressive household penetration of 98.8%. However, the Hershey, Pa.-based manufacturer’s recent shopper study points out that the time of day and a customer’s mood are major influencers over the type of treat or snack they will reach for. To wit: Shoppers are more likely to look for healthy, satiating item such as almonds and energy bars earlier in the day and tend to crave small rewards such as chocolate or ready-to-eat popcorn as the day progresses.

Tony Mardegain, head of shopper insights for Hershey, pointed out in the study that people buy both treat and fuel snacks as they shop, “then make the choice based on snacking occasion at their pantry.”

Digital Bytes 

Today’s mobile e-commerce environment offers retailers a unique opportunity to convert impulse buys into planned sales, and these categories have seen significant growth. NCA data shows that digital sales lead to double-digit growth, with nonchocolate at 61% growth, popcorn at 68%, salty snacks at 46% and chocolate at 34%.

Hershey’s study also highlights scenarios in which retailers could use their digital clout to drive sales. For example, with chocolate among the top five grocery search terms on the largest digital shopping platform in the U.S., a grocer could offer a loyalty shopper who had purchased a chocolate bar previously a discount or free sample for a chocolate bar multipack at digital checkout.

“Once the shopper adds candy to the list, it stays on the list,” Doug Straton, chief digital commerce officer for Hershey, wrote in the study. Now, instead of satisfying impulses at the checkout lane “one bar at a time,” the shopper will be “satisfying her want for a sweet treat from a box or bag in the pantry,” he said.

Indulging in Bulk Bins 

As bulk bins continue their expansion from health food stores to mainstream grocery, candy and snacks are expanding outside of the package. Grocers across the country, including Hy-Vee and Kroger, have begun to bulk up their assortment with bulk bins as they compete with the likes of Fresh Thyme Farmers Market and Sprouts Farmers Market that shine in the bulk-foods domain. While bulk bins may impart an image of healthy items such as beans, grains, nuts and dried fruits, there is often an array of sweeter options hiding among the mix.

Bulk-bin shoppers can reach for a healthier snack such as bulk granola or trail mix, but gummies, chocolates and other confections can usually be found on display. Fresh Thyme, for example, offers a tantalizing spread of chocolate, gummies and even Nerds in its bulk bins.

Finding the Sweet Spot 

Retailers can also boost candy and snack sales at the physical checkout, with Hershey data finding that shoppers look for an array of snacking choices at this point in the trip. While it was determined important to offer both healthy and indulgent snacks and treats at checkout, 53% of shoppers were looking for indulgent treats at checkout, and checkout sales of indulgent items were eight times higher than that of healthy items. Also, with 20% of shoppers having trouble finding the candy they seek in the grocery store, Hershey created stand-up packaging with a more eye-catching display that increases "findability" time by 10 seconds.

Retailers should place high-impact items in the “strike zone,” which is generally three and four shelves down from the top right of the aisle, just around eye level, Hershey officials advise.

Transparent Treats 

With transparency a growing concern for consumers, manufacturers are striving to meet these values, including the NCA’s Always a Treat initiative, which has enlisted its chocolate and candy companies to provide consumers with more information about their products.

Speaking to retailers at the GroceryShop conference in Las Vegas, John Downs, president and CEO of the NCA, says the standing its sweets and snacks industry members enjoy for producing some of “the best-loved and most trusted brands” in the world is “built on a foundation of transparency. For the food industry, transparency is not an option,” he said. “Today’s consumers expect it.”

Through this five-year commitment to Partnership for a Healthier America, 90% of the best-selling treats in the U.S. will have calorie information printed on the front of the pack, and half of individually wrapped products will be available in package sizes containing 200 calories or less.

Companies participating in the initiative are also working on leading the way in using conscious ingredients such as cage-free eggs and sustainable sources of palm oil and cocoa.

Crazy for Cookies 

Cookie sales are on an upward trend, projected to reach $12 billion in sales by 2023 at a compound annual growth rate of 2%, according to Packaged Facts. David Sprinkle, research director for Rockville, Md.-based Packaged Facts, said taste is still the biggest driver of choice when it comes to cookies, and consumers are continuing to seek new and exciting flavors.

“Some consumers, especially younger people, want even more indulgent, decadent, and unique choices,” he said, pointing to darker chocolates, double and triple chocolates, stuffed cookies and rich cream fillings as examples.

On the other hand, national brand packaged cookies are facing competition from lower-priced private label offerings and fresh-baked items from in-store bakeries.

Photograph courtesy of Whole Foods Market

Kroger, Whole Foods Predict Snacking Trends 

Leading grocers The Kroger Co. and Whole Foods Market have dished on the food trends they expect to shape grocery this year. Here’s a rundown on what they have to say about snack foods and sweets:

Globally Inspired Snacks 

Kroger predicts that global and regional flavors will continue to grow in popularity, and in response it has added products such as Nashville Hot Chicken Chips and Cuban Sandwich Kettle Chips to its private label assortment. Whole Foods has, more specifically, narrowed down global cravings to flavors from the Pacific Rim including Asia, Oceania and the western coasts of North and South America.

Faux Meat Munches 

Whole Foods predicts that plant-based snacks will take a meat-inspired turn with products that imitate popular items such as jerky and pork rinds. Mushrooms will play a key role in the movement due to their savory flavor and meaty texture. According to Whole Foods, even people who do not identify as vegetarian or vegan are exploring plant-based snacks.

Trendy Diet-Friendly 

As consumers increasingly explore diets such as paleo and keto, snacks that fit this lifestyle are in turn gaining popularity. For those shopping under these restrictions, Kroger points to its private label items such as Simple Truth Date Bars, Grain Free Original Paleo Friendly Granola and Private Selection Beef Jerky. Whole Foods also predicts that the popularity of these diets will lead to an uptick in the use of healthy fats such as MCT oil powder and coconut butter.

Beyond Seaweed 

With the seaweed craze old news at this point, Whole Foods predicts a new era of sea-inspired snacks to gain favor, including superfoods such as algae and kelp. The retailer also predicts potential new favorites in puffed snacks made from water lily seeds, plant-based tuna alternatives with algae ingredients, crispy snackable salmon skins with omega-3s and kelp jerkies.