Snack makers survived a difficult 2013 with increased competition forming a much larger battleground that included quick-serve, online and even airlines, says a leading sector analyst.
Last year, dollar sales of core US snacks were up 2.8%, but sales volume declined by 0.8%, according to IRI data. However, the macro-snack category that included items like breakfast drinks, smoothies, soup and even hard-boiled eggs was up 0.9% in volume terms and also strong in dollar terms with a 2.2% increase.
Sally Lyons Wyatt, executive and practice leader at IRI, said this indicated that snacking habits had evolved and other categories were benefiting.
“Last year was a competitive shark tank. The snacking universe is evolving and we see how that expanded universe is having impact on what we would call core or traditional snacking categories,” she told BakeryandSnacks.com, following her annual session at Snaxpo 2014 in Dallas, Texas.
“It’s true that they [macro snacks] took a little bit of a bite out of core snacking by what we saw with the trends… The data is an indicator that consumers are pursuing some of these other categories a little bit more than core snacks.”
However, she said that collectively the data was positive because snacking was up and the category had expanded.
Competition up and beyond the retail store
Wyatt said that 2013 was a year where innovation ramped up beyond the snack aisle.
“The edible part, or the food and beverage part of the store, has started to see the success of snacking and realize that frequency is up… We did start to see other categories in the store start to innovate with packaging. So you got some single serve soups, or cottage cheese promoted as a healthy snack, for example.”
Wyatt added that out-of-store competition also ballooned last year with a mass of micro sites like Graze, Boxtera and GoPicnic taking off as well as increased creativity on airlines and in quick-serve restaurants.
“That battleground isn’t just retail battleground now, it’s also the restaurants. The quick-serves are really starting to hit the traditional snacking category,” she said, giving the example of McDonald’s positioning fruit and yogurt and wraps as snacks.
Several US airlines offered themed snack packs last year, she said, such as energy boxes and protein boxes that provided a small selection of cheese, fruit, cracker combos or pita chips, hummus and even olives.
Fragmentation of consumer information
In addition to increased competition, Wyatt said consumers also had access to product information from a larger expanse of sources, adding complexity to the sector.
She said communication came from digital, social, mobile and TV media and happened in store as well as out of store.
“You’ve also got food trucks and in the US gaming sector, consumers can even sit in front of an X-Box and get Pizza Hut delivered to your house. The availability of snacks is huge and it’s very complex. So, to figure out where to place your bets to win, that’s difficult,” she said.