Candy, snacks thrive during hard times

When it comes to candy and snacks, consumers continue to nosh on indulgent treats, even though some better-for-you items have also shown strong momentum.

“Indulgence is winning,” said Sally Lyons Wyatt, executive VP and practice leader at Circana (formerly known as IRI). “But like with anything else, there are certain things within better-for-you that are doing great.”

Overall, Circana data shows that the trend toward more frequent snacking throughout the day remains strong, especially among young consumers. Around half of consumers — 49% — snack three or more times per day, up four percentage points, or 8%, in the past two years, according to the Circana 2023 Snacking Survey.

Consumer attitudes about snacking have evolved, however, especially as it relates to health and wellness and snacking as a reward or a treat. Consumers don’t necessarily think in negative terms about indulgent snacks, Lyons Wyatt explained. Instead, consumers weigh factors such as their mental well-being and the need to reward themselves or satisfy their hunger or a craving.

In fact, 36% of consumers named
chocolate as their go-to snack when it comes to meeting the needs of their mental well being, outpacing all other snack foods, according to Circana research.

Wyatt cited the blurring of traditional snack categories, due in part to the proliferation of products that can meet multiple snacking need states. Protein-fortified cookies can be a treat and serve a source of nutrition or to satisfy hunger, for example.

Related:Supermarkets find sweet success in the candy aisle

For online grocery, Thrive Market snack food sales have been hot, including both functional items and snacks that offer some indulgence. Those include products sweetened with the natural sugar alternative allulose, which tends to appear as a keto-friendly ingredient.

“We continue to see snacks as a whole on the rise at Thrive Market, with not just growth in the better-for-you swaps — like products that use healthy sweeteners like allulose — but also a return to snacks and candy that sweetens with lower amounts of real sugar,” a Thrive Market spokesperson told Supermarket News.

Among the functional snacks that are seeing growth, Thrive Market cited items that feature nootropics and adaptogens that may support mood, energy and focus. In addition, consumers are gravitating toward snacks that incorporate caffeine to boost energy, rather than relying on sugar for an energy boost.

Dollar sales outpace units

Thrive Market said its sales trends for snacks have been positive for both unit and dollar volumes, although dollar sales have risen faster than units because of rising prices.

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“In areas that are more strongly driven by commodity prices, like meat snacks, nuts, seeds and trail mix, the effect is more dramatic, and given that the products we source have the strictest of standards, we’ve been doing all we can to fight off cost inflation and the need to pass these increases on to our members with retail increases,” the company said.

Thrive Market said it has been adding promotions and volume-based discounts on a wide range of products, which in turn has led to more bulk purchases.

Circana data shows that consumers are purchasing multipacks more often, with sales up eight percentage points in the past year. Wyatt said some consumers may be trading down to smaller-sized multipacks that are more affordable.

Retail merchandising of snacks and candy also has evolved since the pandemic, when many grocers that had offered products in self-serve bulk displays, such as barrels or bins, switched to pre-packaged bulk items. Although the self-serve displays appear to have largely reopened, the pre-packaged bulk offerings have endured as well.

“Our bulk department is back to the pre-pandemic barrels with scoops, along with additional packaged bulk items and seasonal bulk candies, nuts and snack mixes,” said Lauren Frank, a spokeswoman for Sprouts Farmers Market.

These packaged bulk items are merchandised on the endcaps and barrels near the bulk department, she said.

She cited items such as Sprouts’ No Sugar Added Dark Chocolate Covered Almonds, which are among the other better-for-you products merchandised in this area.

Indulgent snacks gain share

Within the total snacking category, indulgent snacks have been gaining market share, however. The dollar sales share of indulgent snacks rose by 0.9% to reach 31.2% of total snack sales in the full year ending Jan. 1, 2023, according to Circana data. The dollar sales share of better-for-you snacks, meanwhile, fell by the same amount — down 0.9% — in the full year ending Jan. 1, 2023, to 26.4% of total snack product sales. 

Better-for-you candy and snacks that have shown strong growth include confections that have paleo, keto, vegan or sugar-free claims, and snack foods that tout their high-protein content or make allergen-friendly claims.

The Circana research also showed that consumers have been more cautious in their spending in the current economic environment. A quarter of consumers — 25% — report buying what is on sale more often, rather than their favorite brands, which is an increase of three percentage points over two years ago. In addition, 72% of consumers reported looking at the price before choosing a snack — up five percentage points in the last two years.

Overall, across all retail segments, dollar sales growth of confections and snacks has grown, driven by price increases, while unit sales have declined, Wyatt said. However, consumers have not abandoned the snack category — they are instead trading up or down, depending on their financial situation, and perhaps buying different pack sizes to cope with inflation.

“We know that in tough times, you just want your favorite snack,” she said.