The Eurozone crisis has hit consumer sentiment hard, but food spend has remained more or less the same with snacks and confectionery leading value growth, says AC Nielsen.
Within Europe, three out of four consumers think their country is in a crisis, according to AC Nielsen data. Globally, just over half (56%) of consumers think the same.
Speaking at Snackex 2013 in Gothenburg, Sweden, AC Nielsen analyst Knut Gartland said that European countries “are really hurting” and consumer confidence is dropping.
“It’s no surprise consumers are concerned. It’s almost like a self-fulfilling prophecy – the more the media focuses on the crisis, the more worried the consumer will be,” he said.
AC Nielsen data indicated that 17 and 44% (61% in total) of consumers in European countries think their state of personal finances over the next 12 months is ‘bad’ or ‘not so good’.
However, Gartland said: "On basic shopping behavior, how often we shop and how much we spend is not changing really."
He noted that, in particular, snacks and confectionery has stayed strong despite the dip in consumer sentiment.
“The snack category represents around 2 or 3% of the total grocery spend so it’s not really influenced by total spend. It’s not the first thing consumer’s change during an economic crisis,” he said.
Snacks and confectionery have actually led growth in the fast moving consumer goods (FMCG) sector over the last year, Gartland noted.
“The growth rate for confectionery and snacks is more or less unchanged. The category is doing fine, the battle is within the category itself,” he added.
President of the Snack Food Association (SFA) Jim McCarthy previously told BakeryandSnacks.com that "recessions are not terribly bad for snacks and candy and consumable treats" because they are generally inexpensive.
Mintel data has also showed that consumers in the UK - Europe's largest snack sector - are not willing to cut back spend on food as they consider it an "essential".
Value is driving growth
“It’s interesting to observe that value has been the main driver of growth over time in the FMCG sector,” the analyst said.
In Europe 15% of consumers are concerned about food prices and total FMCG promotional sales have increased to 22.3% during the last year, AC Nielsen data showed.
Within this, confectionery and snacks represent around 36% of all products sold on promotion, Gartland said.
In the UK the number of confectionery and snack items on sale is even higher – representing 42% of promotional sales.