Historically, urbanisation drove snackification. Convenience and portability were key due to time pressures and a growing on-demand culture. Two years following the onset of the Coronavirus (COVID-19) pandemic, digitalisation and technology have become key elements, whilst premiumisation has been negatively affected by the economic costs of the pandemic. Lastly, health priorities have gained importance, offering innovation opportunities.
Constant innovation is necessary, as snacks face pressing competition from lighter “side dishes” that were previously less convenient to consume on-the-go. These are common substitutes for packaged snacks as a filler between meals and are available via food delivery services. Local examples include Latin American arepas (flat cakes, usually filled), Japanese taiyaki (pastries stuffed with various pastes) and Indonesian martabak manis (sweet pancakes).
Reviewing the essence of snacking
In order to adapt to consumers’ new normal, two pillars of innovation will enable snacks players to keep the product offering more relevant than ever. On the one hand, snacks manufacturers need to launch new formats for their best-selling brands and innovate in permissible indulgence, and on the other hand, they should accompany health attributes with clear messages and with no compromise on taste.
In 2021, across all generations, the biggest factor consumers are willing to consider paying more for is specialities or new varieties. With successive waves of COVID-19 still impacting consumers’ lifestyles, away-from-home occasions have not managed to return to their pre-pandemic levels. Hybrid working environments mixing home and office as places of work remain key for a multitude of households globally.
As a result, consumers have adapted their food baskets and are now looking for products better-suited to their new lifestyles. For example, portability may not be such a need for snacks, but the search for new textures, shapes and appearance is required more than ever. In February 2022, for instance, Ben & Jerry’s launched snackable quick frozen chocolate chip cookie dough in the UK. The bulk ice cream chocolate chip cookie dough flavour is one of the star products for the company, and with this new sharing format, consumers might integrate the brand into more snacking occasions than only ice cream.
Snacks products with a health offering are becoming more important as consumer awareness of nutrition rises. However, snacks players are facing new challenges post-pandemic. Health-targeted snacks are now competing with foods that can be eaten or made in the comfort of the home, such as cereals or yoghurt, which have seen their sales boom in comparison with previous years. In 2022, as the pandemic is slowing down, dairy or staple products are forecast to maintain their sales, hence limiting the expansion of healthy snacks, that can sometimes be considered more expensive and more processed. To compete, snacks players must focus on at least one of these criteria:
- Offer “easy to read” labels: In a market filled with new labels and claims, simple and clean packaging designs can stand out.
- Offer functional ingredients: As habits are shifting, the search for ingredients that can improve health or wellness is rising.
- No compromise on taste: Offer products that have a balance between clean label and indulgent recipes.
Recreating impulse through digital
The demand for impulse will not be eradicated. Rather, there is a need for new fulfilment methods, hence digital advances and the emergence of new business models must be leveraged. Sales of snacks through e-commerce globally have increased from USD18.0 billion in 2019 to USD30.5 billion in 2021. Although delivery from retailers such as supermarkets and third-party platforms has boomed in the last years, new forms of delivery service are becoming more visible, such as direct-to-consumer services and mixed digital strategies.
For instance, in China, sales of chocolate and sugar confectionery are expanding along with e-commerce platforms and solutions. The market is young in comparison with Western countries. In China, the per capita consumption of chocolate is around 0.08kg per year, while in Western Europe, for example, it is around 4.8kg per year. It is essential for food manufacturers to include e-commerce in their distribution strategy in the country. Mondelez claims that e-commerce plays an important part in its sales in the country, and recent partnerships with Alibaba and TikTok (Douyin in Chinese) helped to give consumers wider online access to purchase its products.
Also, new snacking occasions must be actively created and be remotely accessible to consumers throughout the day by aligning with occasions. According to Euromonitor International’s Voice of the Consumer Survey, more than half of consumers claimed to snack at home in 2021. This raises the need for businesses to rethink touchpoints with consumers. Advertising and retail locations in high-traffic spaces may have been key to raise brand awareness previously, but a new challenge now lies in capturing the attention of consumers remotely.
Source: Euromonitor International Voice of the Consumer: Lifestyles Survey fielded Feb-Mar; n=39,709
Partnering with media may be an effective solution to reach consumers, particularly for those aged below 30. Snacks suited to leisure activities such as watching TV may raise the potential of variety packs, while mobile streaming may necessitate smaller, one-hand packs. For example, the Korean show Squid Game captured 10% of Netflix’s global viewership for the second half of 2021; consequently, the show triggered a sharp interest in dalgona candy, with various independent sellers all over the world reportedly seeing a spike in sales.
Aligning innovation with three key snacking motivations
The rise of snackification may have become more apparent, but its purpose has not always been equal between snack products and occasions. Opportunities lie in fulfilling consumers’ snacking motivations of meal replacement, self-reward and distracted snacking.
Businesses must create innovations aligned with freshly-evolved consumer needs. They should serve these snacking occasions to better-position themselves and to gain greater share of stomach and wallet in the post-pandemic era.
For further insight, read our report, Snackification: The Future of Occasions in a Post-Pandemic Normal