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Path to purchase for candy and snacks is changing

snacker-teaser_0With consumers snacking multiple times a day with no limitations as to what they constitute as a “snack,” and purchasing their snacks from multiple sources, the industry is in the midst of a revolution — one that won’t be short-lived, according to two IRI experts.

During an Eye-Opener Session at the recent 2019 Sweets and Snacks Expo, Sally Lyons Wyatt, executive vice president and practice leader, client insights, IRI, noted that today’s snackers are multidimensional and have different intentions for snacking.

The traditional paths to purchase — planned and impulse — are still important. However, there are two additional paths on their way to prominence: on-demand and experiential.

“The average consumer still snacks 2.7 times per day, and snacking three-plus times a day has increased in the last four years. … This is good news for people in this room,” Lyons Wyatt pointed out during the session entitled “State of the Industry: Snacks Rule Center Store.”

Consumers’ increase in snacking, as well as them choosing the four different pathways to purchase them, is resulting in multiple trends. Chief among them: holistic health progression.

“We’ve seen solid increases for products that boast relevant claims, such as functional and dietary: 57% of consumers want snacks that contain vitamins and minerals, while 49% view snacks as an important part of their eating plain,” Lyons Wyatt said. “If these products aren’t a part of your set, please make it so they are.”

Another trip-driver trend is snackers’ desire for plant-based options. This segment has experienced 19% dollar sales growth and a 20% increase in unit sales to $188 million in sales, thanks to these items’ tailwind and mobility, the IRI executive noted.

Still, at their core, snack buyers remain committed to three key attributes when it comes to what snack(s) they’ll purchase:

Flavor: A whopping 89% of consumers want a snack with a flavor they prefer, while 92% seek out products with a taste they enjoy.

Packaging: A product’s packaging not only says a lot about the brand that manufactured it, but also about the retailer who carries it. Product packaging communicates to consumers what they’re looking for in snacks, such as transparency and sustainability, as well as a brand story.

Influencers: More than a quarter of consumers (37%) are influenced at checkout by product assortment, signage, price and available offers through a retailer’s loyalty or rewards program.

MOVEMENT IN CONFECTIONERY

Along with the snacking industry, the confectionery business is experiencing its own set of changes.

 

Three key confectionery themes emerged last year: experiential (think indulgent, sensorial and exciting), expectation (think flavor, texture and familiarity) and simplicity (think healthy, convenient and natural). Driven by these themes, 2018 was defined by expansive growth in confectionery products that highlighted such attributes as:

  • Non-GMO Project verified
  • Organic
  • Gluten free
  • Fair trade

Originally published at Convenience Store News. 


Sweets & Snacks Expo 2019 is big on bite-size innovation

Screen Shot 2019-05-24 at 3.08.52 PMMore than 800 exhibitors and 2,000 new product launches set the tone at this year’s Sweets & Snacks Expo — the 22nd annual event hosted by the National Confectioners Association (NCA).

Covering the categories of chocolate, non-chocolate candy, gum, mints, sweet snacks, savoury snacks and more, confectioners and snack manufacturers on the show floor are showing off scores of new products for varied snacking occasions — from in-between meal fillers, to on-the-go portability, to any-time-of-the-day indulgence. The new products boast bold, savoury and sweet flavours, new formats, and overall new experiences.

“Innovative new products generate fun and excitement for consumers, which is key to building a satisfying and compelling shopper experience,” said John Downs, president and CEO of NCA. “The companies highlighting their new products should feel proud of what they have created and their impact, which drives category growth in our vibrant industry.”

The first day of the expo featured the presentation of the 2019 Most Innovative New Product Awards winners. Finalists and winners were determined by a judging panel that tested and evaluated more than 300 submissions across nine categories based on four core criteria: taste, innovation, packaging and go-to-market ability.

The 2019 Most Innovative New Product Awards winners are:

  • Chocolate: Kit Kat Duos Mint + Dark Chocolate, The Hershey Co.
  • Non-Chocolate: Lemon & Marshmallow Flavored Jelly Beans, Just Born Confections Inc.
  • Sweet Snacks: Whole Raspberries Freshly Frozen & Immersed in Premium White and Milk Chocolate, Tru Fru LLC
  • Salty Snacks: Cheez-It Snap’d, Kellogg Co.
  • Savory Snacks: Triscuit Wheatberry Clusters – Pumpkin Seeds & Sweet Corn, Mondelēz International Inc.
  • Novelty/Licensed: Sour Patch Kids Twin Tube Freezer Bars, Jel Sert Co.
  • Seasonal: Trolli Candy Corn, Ferrara Candy Co. Inc.
  • Gourmet: Whole Raspberries Freshly Frozen & Immersed in Premium White and Dark Chocolate, Tru Fru LLC
  • Gum & Mints: Tic Tac X-Freeze, Ferrero USA Inc.

Additionally, Trolli Sour Crunchy Crawlers from Ferrara Candy Co. took home the Best In Show award; and Newfangled Confections LLC walked away with the Small Business Innovator Award, which recognizes the top-ranked product from among all items submitted by companies with $500,000 or less in sales.

The Ruby Award for Supplier Innovation, which celebrates breakthrough innovation from the supplier community that advances the confectionery industry, was presented to Cascades Inc. for its next-gen Northbox packaging. Described as the first-ever fully recyclable, insulated packaging in North America, it is made of recycled materials and provides multiple insulation options for various shipping needs.

“Sustainability is becoming more and more important for consumers as they seek companies that source responsibly and proactively recycle,” Downs noted. “With the introduction of its Northbox packaging, Cascades has created a unique solution to help confectionery manufacturers meet the changing demands of both their retail customers and consumers. In addition to being both recycled and recyclable, the Northbox product provides an energy-efficient alternative to refrigerated trucks and is a terrific option for confectionery distributors.”

The 2019 Sweets & Snacks Expo took place May 21-23 at Chicago’s McCormick Place West.


3 in-store strategies to drive impulse purchases

shopping-basket-icon-TEASER_0The convenience channel has long been known for its cokes and smokes, but if you ask any convenience store retailer, supplier or distributor what really has the ability to drive profits by increasing basket size, they will tell you it’s the highly profitable and highly impulsive candy and snacks categories.

“Candy and snacks — both salty and sweet — are very important to a c-store’s profitability. These categories carry above-average margins and provide a strong impulse purchase opportunity for many of our guests,” Ken Hagler, senior director of merchandising for Tri Star Energy LLC’s Twice Daily Convenience Stores.

Alan Tobin, senior manager, c-store category strategy and insights for The Hershey Co., agrees that candy and snacks play a key role in building baskets at c-stores.

“With 47% of purchases being unplanned, and more than 80% of purchases consumed within an hour, a candy and snacks consumer is in the market for these products on pretty much every trip,” Tobin pointed out.

So, the question becomes: What are the most effective ways convenience store operators can lean into the candy and snacks categories to drive both impulsive and purposeful purchases?

Retailers and suppliers shared the following tricks of the trade:

1. ENTICEMENT

Twice Daily, operator of 50 c-stores across Tennessee and Kentucky, focuses on its fresh food and beverage offers to drive in-store traffic. Once in-store, Twice Daily emphasizes its candy and snack items to entice extra buys. It does this by strategically displaying these categories on the way to and from destination zones, such as the beverage cooler, fresh food area, and along the sales counter.

“We believe this provides us with the greatest opportunity to garner that additional add-on sale of a candy or snack item to go with a customer’s food or beverage purchase,” Hagler explained. “We also merchandise top-selling candy and snack items at the sales counter to capture that last-second impulse purchase to go along with the other items being purchased.”

2. LEVERAGING CHECKOUT

The front counter is where shoppers spend the most time dwelling, notes Hershey’s Tobin.

“About 17% of a shopper’s total time in-store is spent at the checkout. With an average of 23% of candy and snack sales coming from the checkout area, retailers have a huge opportunity to increase basket sizes through maximizing merchandising in this space,” he said.

Tobin recommends incorporating one of three merchandising systems at every pay point:

  1. Counter unit: With limited space, retailers should only merchandise the best-selling brands and items here. About 75%t of candy sales from a counter unit are incremental, he reports.
  2. Under the counter: Retailers who have executed this method saw an average of a 10 to 12% lift in category sales, with a 36%t increase in frontend conversion, according to Tobin.
  3. Queue line: Recent Hershey research showed a 56% increase in buyer conversion at the pay point after a queue line was installed.

3. CLEAR & SIMPLE SIGNAGE

Although it seems like an obvious solution, clear and simple signage is a must to communicate specials and promotional offers to capture incremental basket rings.

“One of the biggest gaps we see with the c-stores we work with is not having enough signage and callouts to grab customers’ attention, especially when it’s a bundle or a price-driven offer, so the customer sees it and gets the chance to make that decision,” said Joe Thrash, national trade relations manager for McKee Foods Corp., manufacturer of Little Debbie packaged sweet snacks.

Too often, signage doesn’t make sense in focusing on the bundle offer or is just not there, he explained.

Originally published at Convenience Store News. 


Cracking the code on healthy snacking at c-stores

Gone are the days of a one-sided definition of “healthy.” Today, healthy can mean many different things to different consumers, like high protein, gluten free, keto, paleo, vegan, organic, local, fresh, all-natural, free from artificial ingredients, preservative free and non-GMO.

healthy-snacks-teaserAs health and wellness takes on a larger role in consumers’ day-to-day lives, their snack choices are evolving to match their lifestyle needs. In fact, 41 percent of consumers want snacks to provide an energy boost, while 80 percent are willing to pay more for snacks with health attributes, according to The Hartman Group’s The Future of Snacking study.

“We’ve seen changes in the industry as certain fads have come and gone, [but] we are also seeing a trend that consumers are willing to spend more money on great-tasting, high-quality, healthy snacks, and manufacturers are filling that demand,” said Paige Brown, director of marketing at Stryve Biltong Snacks, a maker of meat snacks.

Just as today’s definition of healthy continues to evolve, so does the demographics of the healthy snack consumer. Healthy eating is becoming the new norm for men and women, both young and old, as they grow more mindful of nutrition and the role it plays in their everyday lives.

However, if there is one thing that rings true across healthy snack consumers, it is that they’ll flex different food values at different occasions.

“In terms of pre-packaged snacks, you see a lot of different need states represented in different ways than in the past,” said Betsy Frost, director of platform marketing innovation at General Mills Convenience. “‘Healthy’ snacking was for a time about low-calorie options, where you often traded taste or texture of the ‘real thing’ for a lower calorie option or portion-controlled 100-calorie pack. Now, we see healthy snacking mirror the core values of the consumers.”

As shoppers seek out brands that align with how they see themselves, more and more healthy snack brands are emerging in the packaged snacks categories. Three macro trends that are driving this:

  1. The changing of food values. Consumers are looking for more real food experiences.
  2. Consumers’ changing eating habits. “People snack more throughout the day and are looking for snacks to do more jobs for them than they have in the past, such as a meal replacement or mini-meal, a before- or after-workout supplement, or a mental or energy boost,” Frost explained.
  3. The boom of the food entrepreneur. “With more snacks being in more non-traditional outlets, food entrepreneurs have found it easier to turn a home hack that served their personal needs into thriving, purpose-driven organizations,” she added.

Kirk Bailey, product director of grocery and snacks at convenience distributor McLane Co. Inc., identifies an additional trend he finds to be relevant to the topic: an increase in the amount of awareness of how someone’s diet can directly correlate with their health.

“As these health-conscious consumers become more educated on how to live a healthy lifestyle, they will continue to seek items that have simple ingredients and attributes that have a positive effect on their health vs. just grabbing anything to hold them over until their next meal,” said Bailey.

Amid this continuing shift, convenience store retailers shouldn’t miss out on the opportunity to serve healthy snack consumers — across all of their varied need states.

So, what’s the best way for c-store retailers to offer healthier snacks to their customers?

almond-healthy-eating-food-food-drink-463109-1024McLane’s Bailey suggests they incorporate a small section within their salty snack set that includes six to nine items that are in a highly visible area of the set, such as the top right corner.

Then, if retailers find these items do well for their stores, they should consider expanding to a three-foot “Better-for-You” endcap, preferably in a prime location within the store that lets customers know these healthier items are available.

Click below to download our full report, “Capitalizing on the Modern-Day ‘Healthy Halo.'” 


Ferrero to acquire Kellogg’s cookie & fruit snack businesses for $1.3 billion

The Ferrero Group signed a definitive agreement to acquire Kellogg Co.’s cookie and fruit snack businesses for $1.3 billion.

As part of the transaction, Ferrero will acquire a cookie portfolio that 815IRnvi0wL._SY355_includes the iconic Keebler and Famous Amos brands, as well as premium family cookie brand Mother’s, Murray sugar free cookies, and Little Brownie Bakers, supplier of Girl Scout cookies. The company will also pick up Stretch Island and Fruity Snacks, as well as Keebler’s ice cream cones and pie crusts products.

Combined, these businesses generated approximately $900 million in sales in 2018.

Screen Shot 2019-04-03 at 12.44.49 PM“We are acquiring a portfolio of well-established brands that consumers love, with very strong market positions across their respective categories, allowing us to significantly diversify our portfolio and capitalize on exciting new growth opportunities in the world’s largest cookies market,” Ferrero Group CEO Lapo Civiletti said.

Since 2017, Ferrero has acquired several U.S. brands and businesses. With this transaction, the company will enter into new strategic product categories and will further strengthen its position in the North American market, according to Ferrero.

“Kellogg Co.’s cookie, fruit snack, ice cream cone and pie crust businesses are an excellent strategic fit for Ferrero as we continue to increase our overall footprint and product offerings in the North American market,” said Giovanni Ferrero, executive chairman of the Ferrero Group. “With this transaction, I look forward to bringing many iconic Kellogg brands into the Ferrero portfolio, to welcoming our new colleagues to the extended Ferrero community, and to continuing Ferrero’s strong track record of growing brands, as we have through our successful acquisitions of Fannie May, Ferrara Candy Co., and the former Nestlé U.S. confectionery business. We have great respect for Kellogg, its legacy and values, and are proud that Kellogg has chosen Ferrero as a good home for these businesses.”

Ferrero will also acquire six of Kellogg’s food manufacturing facilities located across the country in Allyn, Wash.; Augusta, Ga.; Florence and Louisville, Ky.; and two plants in Chicago, as well as a leased manufacturing facility in Baltimore.

The transaction is subject to customary closing conditions and regulatory approvals. It is expected to close in the second half of the year.

JP Morgan Securities plc and Davis Polk & Wardwell LLP served as advisors to Ferrero.

Founded as a family business in Alba, Italy in 1946, Ferrero is the third-largest company in the global chocolate confectionery market, with sales of more than $12 billion and distribution in more than 170 countries.

Originally published at Convenience Store News.


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