CHICAGO — The 2018 Sweets & Snacks Expo, hosted by the National Confectioners Association, was nothing short of innovative, as more than 850 confectionery and snack manufacturers showcased new flavor profiles, shapes and brand extensions in chocolate, candy, gum, mints, and sweet and savory snacks.
The 21st annual event welcomed more than 18,000 candy and snack professionals, who gained insights into why consumers make candy and snack purchases, how to compete with rapidly growing ecommerce, and how to offer a "total commerce experience."
Here are Convenience Store News' top five takeaways from the 2018 Sweets & Snacks Expo:
1. Don't Underestimate Ecommerce
Retail is changing seemingly every day as new online-based services launch that focus on convenience and directing consumers to the products they want.
"It's not about where we are now, but where we will be in five years. Online is where shoppers are, and it will take a diverse strategy to reach them," Mike Black, vice president of marketing for ecommerce analytics and strategy company Profitero Inc., told those in attendance at the "2018 State of the Market: Ecommerce for Candy, Snacks and Specialty" eye-opener session.
Brick-and-mortar retailers, specifically convenience stores, are facing threats as new services come online such as on-demand delivery service goPuff, which touts itself as "convenience on wheels."
Black outlined three factors as major accelerators of the digital marketplace:
- Online shopping goes mainstream. In the next five years, 70 percent of consumers will turn to ecommerce for two reasons: the value proposition the channel offers through the volume of product content, and new product discovery methods.
- The Amazon Effect. "The fact is, Amazon pulled the market online," the executive noted.
- Click-and-collect programs. Shoppers approach online shopping in two ways. The first Black refers to as "spearfishing," which is mission-driven. The other is a "full basket approach" that resembles more traditional shopping trips.
"We aren't far from hitting critical mass around this," Black said. "Ecommerce is not optional anymore."
2. Destination: Retail
In a time when 50 percent of retail sales in the United States are digitally influenced, The Hershey Co.'s Senior Director of Retail Evolution and Insights Brian Kavanagh told attendees of the "Bricks & Clicks Retail: From Enemies to Allies" educational session that retailers must deliver experiences that are "special and visceral" to attract customers into stores.
He recommends that retailers offer a total commerce experience, explaining that digital and physical retail are complementary components.
"Shoppers spend six times more when they shop all of the retailer's commerce platforms," Kavanagh said.
Putting the customer at the center, the Hershey executive highlighted the four "Cs" of driving category sales inside the store:
- Connections that pull customers into stores.
- Content that draws consumers closer to products.
- Conversion, which is closing the deal or making the sale.
- Community, in which retailers bond with the customer.
3. Sweet Opportunities
The snacking categories have grown $168 billion since 2014 and the landscape is changing pretty rapidly, but there are proactive measures retailers can take now to stay ahead of the curve, Jordan Rost, vice president, consumer insights at Nielsen, noted during "The Snacking New World Order" eye-opener session.
"The role these broad categories play is significant. When you look at CPG FMCG [fast moving consumer goods], snack is at the forefront of what consumers buy online. However, there's still a long way to go for snacks being bought online to go mainstream," the executive expressed.
"Snackable" categories are growing across the store, noted Rost, who pointed to items like Kombucha, yogurt and dessert bars, which gives retailers ample opportunity to fulfill consumers' need states, whether they're to satisfy a craving or serve as a filler in between meals.
Although there may not necessarily be a push for "clean" across all categories, retailers should be mindful that consumers are looking to spend money on better-for-you snacks and clean-label treats. According to Nielsen insights, 20 percent of consumers say considering food with no artificial ingredients has influenced their purchases.
Superfood snacking is also gaining momentum, Rost cited, noting that dollar sales increased 6 percent on items that contain "superfood" ingredients.
"We snack with purpose. It's very intentional, and we see consumers shopping with intent and snacking with intent," the Nielsen executive said. "The future of retail is all about access."
4. Supporting the "Why" Behind Buys
Shopping is transformative, as customers attempt to create or re-create themselves and define their goals and values with the products they buy.
"We are all either involved in the process of making, marketing or selling what consumers want. We help them connect to what they want and what they find valuable," Curt Munk, senior vice president of marketing for FCB Red, explained during "The 'Why' Behind What We Buy" eye-opener session.
According to the presenter, retailers help shoppers find value in the purchases they make in five ways: functional (fulfills a need state), epistemic (arouses curiosity), image (gives the appearance of or possession of something), emotional (arouses a feeling or attractiveness) and social (associates with a particular demographic, social or cultural group).
Candy and snacks try to find a place for themselves among broad categories, according to Munk. His suggestions for confectionery and snack manufacturers, marketers and sellers looking to help consumers transform their personal experiences when it comes to making candy and snack purchases is:
- Know audience consumption values.
- Understand shoppers’ identity structure.
- Own the pre-purchase experience at all costs.
- If you sell a "thing," find an experience to attach to it.
5. Private Label is on the Rise
One of the largest drivers of candy and snacks today is the rising popularity of private label.
In the last 52 weeks, total candy sales reached $24.9 billion and snacks racked up $25 billion in sales, according to data from IRI. The top four manufacturers contributed $199.8 million of that amount, other national manufacturers contributed $133.2 million, and private label contributed $17.1 million.
While that may not seem like a lot, private label is a forced to be reckoned with, Sally Lyons-Wyatt, executive vice president and practice leader at IRI, argued during the "2018 State of the Market: Candy and Snacks" eye-opener session.
Consumers, namely millennials, are becoming better educated on what private label is and what it has to offer.
"Private label gives retailers the opportunity to decide what to put on shelves," Lyons-Wyatt said.
The premium exclusivity of private label appeals most to consumers, according to the IRI executive, explaining that retailers typically place private label brands with fresh food snacks to draw in consumers who are searching for healthier, simpler options.
The 2018 Sweets & Snacks Expo was held May 22-24 at Chicago's McCormick Place West.