CHICAGO — Snacking is still a lifestyle in the United States, with younger generations fueling future sales potential with an uptick in three-plus snacks per day. And, while the economic situation is impacting what snacks and size consumers buy, many snack categories continue to be inelastic.
In the vast snacking universe, there are bright stars of growth that Sally Lyons Wyatt, executive vice president & practice leader for Circana, referred to as "snacking superstars" during the opening session of the 2023 Sweets & Snacks Expo entitled "The Snacking Supernova: How to Win in the 2023 Snacking Universe."
Key among those superstars is the convenience store channel. While consumers are spending across all retailers, the c-store channel posted one of the largest increases in dollar sales growth year over year from 2022 vs. 2021 at 11.9 percent. This figure comes in just behind mass merchandise retailers (14.5 percent), military (14.7 percent) and club stores (15.5 percent).
Lyons Wyatt attributes the growth in the convenience channel to the industry's ability to transform and lean into trends, especially in regard to foodservice traffic. While quick-service restaurants command the largest share of foot traffic at 57 percent, c-stores hold 17 percent of foot traffic share. That figure is growing at a rate of 2 percent year over year.
The convenience channel has created a "halo effect," according to Lyons Wyatt, who explained that consumers are drawn into c-stores for their foodservice offerings and are making additional snack purchases because operators have snack sizes with entry price points that are resonating with buyers.
Circana research found that pack sizes 5 ounces and above are on the rise, but items less than 5 ounces are winning out the convenience channel. The top five pack sizes that grew in unit growth year over year from 2021 to 2022 were 2.5 ounces, 2.75 ounces, 2.25 ounces, 4 ounces and 2.125 ounces.
The convenience channel also continues to realize growth across all dayparts. For the two-year period ended Dec. 25, 2022, total snack percentage growth by time of day grew between 29 percent and 31 percent, respectively, with the 2 p.m. to 8 p.m. daypart seeing the largest uptick in dollar sales at 31.3 percent.
"The fact that we still see growth after a huge year is an indicator that consumers are still gravitating to convenience and consuming snacks all throughout the day at the convenience channel," Lyons Wyatt told attendees.
Giving Consumers Options
Convenience store retailers' adoption of different technologies is also giving way to an increase in candy and snack purchases. One area in particular that experienced an uptick last year was c-store mobile apps/rewards program usage.
Citing Mintel research, Lyons Wyatt shared that nearly half (46 percent) of convenience consumers are part of a loyalty program. Of those who are part of a loyalty program, 40 percent are exclusive to that particular retailer and 35 percent buy something additional when they redeem rewards.
"There's still great room for growth," the Circana executive emphasized, adding that inflation and rising gas prices give reason for convenience retailers to incentivize consumers to join through rewards. "Within loyalty programs, you can do promotions like buy one, get one free, or get two and get a discount on a combined meal."
Additionally, c-store retailers' adoption of delivery has given consumers the opportunity to make candy and snack purchases outside of the store at any time of day. Lyons Wyatt pointed to 7-Eleven Inc., Wawa Inc., Circle K and Casey's General Stores Inc. as convenience retailers leading the way in delivery.
"Convenience stores are that last mile, literally. If a consumer wants to get a snack but they're not able to go into the store, then they have an online delivery option for just getting in and getting what they want, and that's especially important for Gen Z," she said.