CCentral-Main-logo-EN-trans

Convenience Central
Join our community
extra content
Screen Shot 2020-08-10 at 4.33.47 PM

Insights and lessons from pandemic snacking trends

Increased home time, family time, leisure screen time, stress and near 24/7 access to our pantries, have all translated into a rise in snacking, as Canadian consumers reach for treats and comfort foods

Screen Shot 2020-08-10 at 4.30.51 PMOther than checking my bathroom scale, there are broader metrics to demonstrate that consumers like me increased snacking during the lockdown.

In order to quantify these kinds of shifts in consumer spending in the United States as a result of the COVID-19 pandemic, market tracking company IRI recently launched its CPG Demand Index to measure weekly changes in consumer purchases, by dollar sales and channel.

IRI tracked an increase in total core snacking of +40% year-over-year (YOY) for the week ending March 15, and +34% for the following week. For the week ending April 5, snacking sales modulated, but still grew +7 YOY.

Results from a broad survey of consumers in the United Kingdom, conducted by supermarket chain Waitrose, revealed that nearly 40% of consumers reported an increase in snacking during lockdown. 

In turn, the Frito-Lay Snack Index, released at the end of May, found 85% of respondents said eating their favourite snack makes them feel normal, while 83% said their favourite summer snacks remind them of good times and nearly half (48%) said eating their favourite snack makes them feel happy. 

Bottom line is that increased home time, family time, leisure screen time, stress and near 24/7 access to our pantries, have all translated into a rise in snacking, as Canadian consumers reach for treats and comfort foods. 

 

Stocking up

In the third week of February 2020, the Dow Jones average was nosing 30,000 for the first time: This was the end of the longest bull market in recorded history. However, by the third week of March, the Index had lost more than one-third of its value, essentially wiping out the cumulative gains of 2017, 2018, 2019, and Q1 2020. As of this writing, markets have recovered somewhat to levels of early January 2018.

There have been some exceptions to this general trend. Shopify is a Canadian multinational e-commerce company, offering a proprietary software platform that facilitates retailers selling their products online and in stores. Shopify’s stock value has flourished during COVID-19, as most retailers scrambled to up their online presence. Between January to mid-March 2020, Shopify stock was up about 5%. Between March and May, Shopify’s stock value doubled, surpassing RBC as Canada’s most valued stock. 

Despite a precipitous drop in foodservice channel sales during the global lockdown, a number of large food companies have seen success. Mondelez, PepsiCo and Kellogg’s are all examples of bucking the trend and boats rising in a down market.

Mondelez reported organic sales growth of more than +6% for the first quarter of 2020, beating Wall Street estimates. Mondelez CEO Dirk Van de Put attributed the performance to the rapid growth in snacking due to shelter-at-home behaviours.

PepsiCo reported nearly +8% net revenue growth in Q1 2020, as consumers stocked up on beverages, salty snacks and other food items for at-home consumption. Key observations during COVID-19, include:

o   Shift to at-home consumption – growth in snacking during the day

o   Increased usage of large-format pack sizes

o   Shift away from immediate consumption

o   Increased purchase “basket size”—fewer shopping trips with a higher value

o   Increased use of e-commerce sourcing

The company is leaning into the changes in consumer behaviour and has developed a game plan, with an emphasis on snacking. While PepsiCo expects gradual improvement in sales at convenience and gas channels as people return to work, the company is also embracing an e-commerce strategy, launching two U.S.-based direct-to-consumer sites to capitalize on the growing appetite for snacks. Snack.com offers more than 100 Frito-Lay snack products, while PantryShop.com features multi-product bundles of Quaker and other brands to meet specific day-part and lifestyle needs

At Kellogg’s, North America financial reporting for the first quarter of 2020 showed organic sales rose 6%, with volumes up 5%. This largest driver for this growth was the company’s snacks segment, according to Amit Banati, senior vice president and chief financial officer.

Kellogg’s cracker sales jumped almost 40% versus a year earlier, while salty snacks and wholesome snacks rose nearly 30%.

“This consumption growth has been broad-based across our portfolio of brands,” Banati said. “From an occasion standpoint, we have seen less lift for on-the-go items and more growth for pantry packs”.

Opportunity to take share

Traditional convenience and gas non-fuel sales have been oriented towards impulse consumption—providing products that are consumed within an hour of purchase. Legislated changes to consumer behaviour have impacted the convenience channel significantly. 

The convenience business model is built on and grounded in consumer mobility, social activity and time scarcity. In a pandemic, virtually overnight, this evolved into immobility, isolation, CPG scarcity and boredom. Rather than getting from point A to B as fast as possible, fuelled by an on-the-run meal or snack, consumers’ priorities shifted to limiting retail trips, avoiding crowds, and eschewing public transit.

The great news for the convenience channel is that proximity plus offering consumers a streamlined retail experience have never been more important. As working from home and home schooling/daycare become entrenched as a kind of new normal for consumers, there is an expanded role for the convenience channel to play as a provider of pantry staples, meal kits, fresh produce, non-food cleaning/hygiene products and even office supplies.  

Screen Shot 2020-08-10 at 4.22.34 PM

Use your smarts

Symphony RetailAI, along with partner ROC Associates, use technology to optimize performance for gas/convenience, foodservice and grocery, drawing insights from their pool of retailers: Their findings are representative of thousands of stores and millions of households globally. 

Trusha Pandya, account director at Symphony RetailAI noted a number of trends emerging across the convenience channel as the effects of the COVID-19 pandemic unfolded.

Screen Shot 2020-08-10 at 4.22.10 PM

Data showed that, overall, c-store sales tracked improving week-over-week performance. At the outset of the lockdown, Symphony “recommended that convenience store retailers stock up on frozen and canned fruits and vegetables.” As the market gradually transitions into a new phase of the pandemic, Symphony is advising convenience retailers to renew their “focus on better-for-you and fresh options, (which should) also translate to snack categories.”

 Be a camel

In an article in The Globe and Mail, venture capitalist Alexandre Lazarow called for Silicon Valley to create a new model for a post-pandemic world. 

He notes that the tech world has spent the past 20 years trying to find the next “unicorn” startup. Unicorns are companies having seemingly unlimited potential, capable of growing from zero to more than $1-billion valuation in short order. 

Our current harsher, less stable market environment calls for a different approach. Instead of unicorns, the future will be “camel” startups that prioritize sustainability and resiliency.

Lazarow writes that the camel, “adapts to multiple climates, survives without food or water for months, and has humps to protect itself from the desert’s deprivations. Unlike unicorns, camels are not imaginary creatures… camels are survivors.” 

There will be bumps and impediments in the road ahead. As always, the ability to adapt to changing circumstances, and sustain your business through emerging challenges, will enable you to survive and flourish. Put simply, just like all of us in the face of COVID-19, be prepared to do what you need to do to live to fight another day.

Screen Shot 2020-08-10 at 4.24.06 PM 

Darren Climans is a foodservice insights professional with close to 20 years’ experience partnering with broadline distributors, CPG suppliers, and foodservice operators. His practice is to understand issue-based decisions by taking a data-driven approach to strategic decision making.

 


Screen Shot 2020-07-15 at 1.48.19 PM

Celebrate good times, come on!

Changing consumer behaviour is affording c-stores a unique opportunity to help customers mark special moments, from family moving nights to Halloween, but it starts with the right product mix

Shutterstock

Shutterstock

COVID-19 restrictions may have put a kibosh on Easter gatherings this year, but Canadians still sought out chocolate and candy. Fortunately for the sector, more shoppers than usual found their treats at c-stores.   

Easter confectionery in the convenience and gas channel reached $3.8 million nationally and grew 13% over 2019, according to Nielsen MarketTrack for the season ending April 25th, 2020. 

It has given c-stores reason to be bullish about their role in helping customers celebrate other calendar milestones amidst a new normal of social distancing and shifting shopping behaviours. 

The Civic Holiday, Labour Day, Back to School, Thanksgiving and Halloween are all upcoming opportunities for the convenience industry. 

Maintaining traditions

“Quality time with family is important and Canadians are still looking to maintain their traditions even if they can’t celebrate like they once did,” says Julie Sirois, VP of sales at Mondelez Canada, adding “these moments during the year are providing a sense of normalcy for our turbulent times.”

After 17 years with PepsiCo Foods Canada where she led sales for its Frito-Lay portfolio, Sirois joined Mondelez in late March—at the peak of the pandemic. She believes it has set up the c-store to become a favoured destination of seasonal and holiday goodies.

To help consumers capture the essence of summer, Mondelez has introduced limited-time varieties of its Cadbury Dairy Milk chocolate bars—Fireworks, S’mores and Rocky Road—as well as summer-themed flavours of its Maynards gummies, called Tropical Swedish Berries, and Sour Patch Kids gummies, Sour Patch Kids Crush. 

Size matters

It has also partnered with key c-stores on larger take-home sizes of its candy and gum brands. “Historically, single-serve confectionary has been a big part of the convenience business, and it still is. However, we are seeing larger packs growing faster than anything else in this channel,” notes Sirois. 

At the start of the COVID outbreak, that was attributed to pantry loading. Now she says consumers are wanting “to avoid long grocery store line-ups” and are picking up staples like bread and dairy at their local c-store. While there, they are adding treats to their shopping baskets that can be enjoyed multiple times or shared at home. 

This includes for special occasions, but also moments with loved ones like during a BBQ on the patio or a movie night with the kids. 

To that end, promotional bundles like a bag of milk with a pack of Oreo cookies could work really well, says Sirois, especially given people are watching every dime they spend. 

Halloween highlights

Or, once October hits and the weather turns cooler, a hot beverage with a king-sized chocolate bar, since “after trick-or-treating, the next big driver of Halloween treat consumption is to give yourself a treat,” says Sirois.  

As for trick-or-treating, “we don’t know what it will look like, but people are still going to want to celebrate Halloween with their kids. They will just do it differently,” she says.  “We are working with retailers to ensure we bring products that customers desire.” 

Retail analyst Ed Strapagiel agrees candy packs could do very well for c-stores this October. 

“The main supermarkets have gone into bulk-sized boxes of Halloween treats, but right now nobody knows what the turnout is going to be for trick-or-treating, except that there will be less kids going out. The question is, how much less?” says Strapagiel. “Parents are going to be concerned about how the candy was stored, cared for and handled, and so households may only need to give out a small amount.”  

It is easy to imagine a scenario where trick-or-treaters go door-to-door only to the homes of friends and family, for instance, rather than the entire neighbourhood.

C-stores might also want to invest in felt masks with Halloween designs, adds Strapagiel. 

Seasonal displays

Screen Shot 2020-07-15 at 1.48.28 PMRussell Large, senior business development manager in Ontario for the Continental Store Fixture Group (and former VP of retail services for Hugh Large & Associates Inc.), advises clients to feature a seasonal wall or display for kids, especially if their store is located on the way to cottage country. 

In the summer, that might mean displaying quality water toys and colouring books, and during back-to-school time lunch snacks and supplies, such as pens, pencils and markers. In the lead-up to Halloween, the assortment could change again, to not just masks but also make-up, pumpkin carving kits, costumes and candies. 

“Consumers are looking for c-stores to replace their trip to Toys ‘R’ Us Canada and other big stores, but the onus is on convenience owners to carry quality product,” says Large. “People are willing to pay a higher price for quality, especially if they don’t have to drive around and expose themselves.”

The allure of fireworks

Screen Shot 2020-07-15 at 1.48.19 PMAnother way c-stores can deliver a bang in seasonal/holiday sales? Fireworks! 

With the cancellation of fairs, festivals and other public gatherings, expect more households to put firework displays on in their own backyards. 

After Victoria Day and Canada Day, Blast-Off Fireworks, the largest fireworks importer and distributor in Western Canada, cites the Civic long weekend and Labour Day as big purchasing occasions for fireworks. Halloween is also popular, especially in British Columbia, and Diwali, the Hindu festival of lights that starts Nov. 14, is becoming a popular time for fireworks. 

Blast-Off has focused on new products in two categories—finale cakes, which produce a display with a single ignition, and family packs, which provide high-quality fireworks, ignition tools and firing instructions in one box.

“Fireworks can do very well for c-store owners, delivering profit margins of 50% or more,” says Matt Bialek, president of Blast-Off, which works with retailers to navigate city by-laws. In Calgary, for example, consumer fireworks are banned, while most other cities across Canada lift fire bans during key times.

“With those margins, in a year like this, it can help c-store owners make up lost dollars from other categories,” adds Bialek. “Remember, people still want to celebrate moments even if they are stuck at home.” 

Screen Shot 2020-07-15 at 1.46.56 PM

This article originally appeared in the July/August issue of Convenience Store News Canada. 


Screen Shot 2020-03-30 at 5.52.42 PM

Julia Sirois joins Mondelēz Canada

Screen Shot 2020-03-30 at 5.52.42 PMJulie Sirois is moving to Mondelēz Canada.

After 17 years with PepsiCo Foods Canada, Sirois is joining the cookie and cracker maker as vice-president of sales, and as such, becomes a member of the company’s management team.

While at PepsiCo Foods Canada, Sirois marked many career milestones, including becoming the company’s first female zone sales leader for Eastern Canada and being named one of Canadian Grocer‘s Star Women in Grocery Award winners in 2018.

“We are very pleased to welcome Julie to our leadership team, especially amid these challenging times,” said Mondelēz president Martin Parent, in a press release. “Our global ambition is to ‘Empower People to Snack Right’ and Julie will be instrumental in helping us achieve that by building a winning, growth culture across our teams with a focus of becoming our customers’ snacking company of choice.”

Originally published at Canadian Grocer. 


Unknown-3

Food companies temporarily boost employee pay during COVID-19 outbreak

Some of Canada’s food processors joined other companies in increasing pay for hourly staff working hard to ensure the country’s food supply remains strong during the COVID-19 pandemic.

“In this global crisis, we are compelled to look beyond our business and do what we can to support the many dedicated people who continue to deliver the critical services we depends on,” said Maple Leafs Foods Inc. CEO Michael McCain in a statement.

The food processor announced Monday it would start paying its hourly employees at production and distribution facilities an extra $80 per week. That bonus is in addition to regular and overtime pay.

The bonus comes as Maple Leaf also announced $2 million to support emergency food relief efforts and $2.5 million for a new fund to provide personal support to front-line health providers.

Cargill Ltd., a Winnipeg-based merchandiser and processor that employs more than 8,000 people in the country, will also dole out additional pay.

Cargill will pay an extra $2 per hour, with a bonus of $500 to employees who complete weekly shifts over eight consecutive weeks, starting Monday, said United Food and Commercial Workers Locals 175 and 633 in a statement. The two chapters represent more than 70,000 employees in sectors including grocery retail and industrial food preparation.

“Workers in food manufacturing are key at this time to maintaining the food supply chain,” said Shawn Hanger, president of UFCW Local 175, in a statement.

The employees at these two manufacturers’ facilities “have been under stressful conditions during this crisis and these measures will go a long way to providing security for them.”

Both manufacturers have also made improvements to employee safety while working, the union said, including banning visitors and providing more space to improve social distancing.

The two locals continue to reach out to all employers of the members it represents “to have them compensate employees properly, provide pay security for those that need to be off work, and enact stringent health and safety protocols for everyone’s safety.”

Mondelez Canada – a Toronto-based snack manufacturer that makes products from brands including Cadbury, Maynards and Triscuit – announced Monday a premium pay program for Canadian employees.

Workers will see their pay increase by $2 hour or $125 per week, depending on how the employee is paid, until April 30, according to a statement. The program includes workers who make, ship or sell the company’s goods.

The company employs 2,600 workers.

Manufacturers aren’t alone in raising wages for those in the food industry working to help keep Canadians fed as many other businesses shut down.

On the weekend, Loblaw executive chairman Galen Weston said his company was temporarily increasing compensation for its store and distribution centre employees by approximately 15 per cent retroactive to March 8.

Sobeys and Safeway Canada have also announced a temporary program that will see employees receive an additional $50 a week, plus those working more than 20 hours a week will receive an extra $2 an hour for all hours over 20, retroactive to March 8.

 


Screen Shot 2020-02-25 at 10.16.36 AM

Mondelez buys majority stake in Canadian maker of two bite brownies Give & Go

Screen Shot 2020-02-25 at 10.16.36 AMMondelez International says it has signed a deal to buy a significant majority interest in Toronto-based Give & Go Prepared Foods Corp., maker of baked goods such as two-bite brownies.

Illinois-based Mondelez – maker of Oreo, Triscuit and Chips Ahoy! brands – is acquiring the stake in the privately held Give & Go from funds affiliated with Thomas H. Lee Partners, LP.

Financial terms of the deal were not immediately available.

Founded in 1989, Give & Go’s management team will maintain a minority interest in the company.

In addition to its two-bite brownies, Give & Go’s brands include Create-A-Treat, Mason St. Bakehouse and the Worthy Crumb Pastry Co.

Screen Shot 2020-02-25 at 10.18.56 AM

“Give & Go’s leading position in the large and fast-growing in-store bakery channel gives us a unique opportunity to expand into new, on-trend consumer spaces,” Glen Walter, executive vice-president and president, North America, for Mondelez International, said in a statement.

“Similar to our recent acquisitions of Perfect Snacks and Tate’s Bake Shop, this is yet another great example of our bolt-on acquisition strategy to establish foundations in faster growing snacking adjacencies.”


Screen Shot 2019-11-20 at 2.28.43 PM

Mondelez report dives into the ‘State of Snacking’ 

Global snacking is on the rise as more consumers opt for snacks over meals to fulfill evolving needs, and that is helping lead the future of food.

Screen Shot 2019-11-20 at 11.14.40 AMAccording to Mondelēz International’s first-ever State of Snacking report, six in 10 adults worldwide (59%) said they prefer to eat many small meals throughout the day, as opposed to a few larger ones, with younger consumers especially leaning into snacks over meals as that number rises to seven in 10 among millennials (70%).

State of Snacking is a global consumer trends study examining the role snacking plays across the world in meeting consumers’ evolving needs: busy modern lifestyles, the growing desire for community connection and a more holistic sense of wellbeing. It reveals the rise of global snacking, underscored by regional parallels demonstrating how snacks are helping lead the future of food by delivering on the spectrum of needs that exists in our day-to-day lives.

The report, developed in partnership with consumer polling specialist, The Harris Poll, complements Mondelēz’s global snacking knowledge estate with new research conducted among thousands of consumers across 12 countries, according to the company.

Key findings from the report include:

THE RELATIONSHIP WITH FOOD IS FUNDAMENTALLY CHANGING.

  • People are more commonly considering how smaller bites/snacks effect their emotional wellbeing, as well as their physical health.
  • For more than eight in 10 people, convenience (87%) and quality (85%) are among the top factors impacting snack choice.
  • 80% of consumers are looking for healthy, balanced bites, while 71 of adults say snacking helps them control their hunger and manage their calories throughout the day.

MOMENTS OF INDULGENCE CONTINUE TO HAVE A ROLE IN DAILY ROUTINES.

  • 80% of adults acknowledge the need for balance by appreciating the option of both healthy and indulgent snacks depending on the moment of need.
  • 77% of consumers agree there is a time and a place for a healthy snack, and a time and a place for an indulgent one.
  • The majority of people say snacks are just as important to their mental (71%) and emotional (70%) wellbeing as their physical wellbeing.

SNACKING IS ABOUT SO MUCH MORE THAN WHAT WE EAT.

  • 71% said snacking is a way to remind themselves of home.
  • Seven in 10 adults make an effort to share their favorite childhood snacks with others (70%).
  • Around the world, more than eight in 10 parents use snack time as a small way to connect with their children (82%).
  • 76% of parents use snacks to pass cultural snacking rituals on to their children.
  • More than three out of four parents (78%) say the snacks they choose for their children reflect who they are as a parent.

“As the snacking market continues to grow globally, we’re living our purpose to empower people to snack right by constantly learning about the many different ways consumers around the world are snacking and evolving their relationship with food,” said Dirk Van de Put, chairman and CEO of Mondelēz International. “We see that the average global adult now eats more snacks than meals on a given day, driven by a number of evolving demands largely associated with how we live today, including a growing need for convenience, yearning to share nostalgic and cultural experiences, expanded wellbeing preferences and the desire for choices that range from wholesome to indulgent.”

Screen Shot 2019-11-20 at 11.14.21 AMMondelēz launches the State of Snacking report a year after it announced a new business strategy and purpose. Over the last year, the company made strong progress on its mission to offer consumers the right snack, for the right moment, made the right way. This includes developing an ever-deeper knowledge estate of the demands that motivate people to reach for snacks while continuing to meet people’s more holistic understanding of wellbeing by focusing on sustainably sourced essential ingredients, evolving its product portfolio to a broader range of options and inspiring mindful snacking habits.

“We embrace the fact that snacking habits around the world are as diverse as the consumers who enjoy them,” continued Van de Put. “However people snack, they should not have to choose between snacking and eating right, or to worry about the impact their choices have on the world and their communities. That’s why we’re committed to empowering people to snack right.”

The State of Snacking report is available here.

Originally published at Convenience Store News. 

 


MDLZ_Square

Convenience U CARWACS: Mondelez bronze sponsorship

Mondelez Canada will help to connect the convenience industry as a Bronze Sponsor of The Convenience U CARWACS Show Toronto! Read more

Music2

You could win* with CADBURY!

Help capture Millennial customers with a CADBURY and Universal Music Canada promotion Read more

The-Cadbury-Bicycle-Factory-2014

Win with the Cadbury Bicycle Factory

Find out how you can make the most of this popular promotion Read more

0749_Gray_CNUE 2014_Trade Show Floor copy

Get Mondelēz deals at Convenience U CARWACS!

Mondelēz is offering up deals at The Convenience U CARWACS Show Toronto. Find out how it works. Read more