Why More & More CPG Companies Are Catching Snack Fever
BOCA RATON, Fla. — If there’s one thing that packaged food executives agreed on at the Consumer Analyst Group of New York’s (CAGNY) conference, it's that millennials and Gen Zers are snacking more than previous generations.
"The millennials have not only arrived, but they're taking over," Campbell Soup Co. CEO Denise Morrison said at the CAGNY 2018 Conference held Feb. 19-23 in Boca Raton. She added that due to new food preferences, 90 percent of all consumers snack multiple times a day, reported The Street.
Campbell Soup isn't alone in the shift toward snacks. Kellogg Co., known for its cereals, is moving away from the breakfast daypart to what's become known as "all-occasions eating."
"Breakfast is a key occasion clearly, but so is late-night snacking, and on-the-go meal replacement, and a snack as a meal accompaniment," Kellogg Co. CEO Steven Cahillane said, adding that it is now "predominantly a snack company."
According to Cahillane, Kellogg Co. will be spending $50 million annually on brand building to support its banner brands like Rice Krispies Treats and Pringles, in addition to its healthier products like Nutri-Grain and the newly acquired RxBar.
Mondelēz International Inc. also underscored the importance of its snacks sales, which constitutes 85 percent of its revenue — considerably better-established than Campbell's 31 percent snacking segment, the news outlet reported.
"Consumers today are working longer hours. As a result, people snack more in-between meals and as a replacement of meals. That gives about $1.3 trillion being spent on products, on snacking products, every year," stated Mondelēz CEO Dirk Van de Put, adding that snacking growth is outpacing the broader packaged food category.
Conagra Brands Inc. is also taking a "new approach" to its $2-billion snacking segment as it grows faster than its other offerings.
"Millennials are growing rapidly and we're going to take full advantage of this," said Conagra CEO Sean Connolly. He added that marketing addressing impulse consumption and price research are part of the company’s plan.
As consumption by millennials continues to gain traction and more market share in snacks, Campbell Soup, Kellogg Co., Mondelēz and Conagra all mentioned future acquisitions.
"We see M&A as being another important way that we can shift our portfolio's growth profile," Kellogg's Cahillane said.
Today, the U.S. snacks business comprises $89 billion.
New York-based CAGNY is the largest and oldest non-profit of its kind, providing fair and collegial forums to share information among investors, analysts, corporate management teams and the media.