Snacking: Grocers sit in the middle of a snacking shift
- InsightTrendsWorld
- Jun 7
- 12 min read
Why it is the topic trending:
Changing Consumer Habits due to Economic Pressures:
Thrifty consumers are actively seeking ways to reduce their spending on snacks, leading to a shift in where they purchase these items. This increased price sensitivity is a significant factor driving the trends observed in the NielsenIQ report.
Grocers Gaining Ground from Impulse-Driven Retailers:
Grocery stores are successfully attracting snack sales that were previously made at convenience stores, drug stores, and dollar stores. This indicates a conscious decision by consumers to incorporate snack purchases into their regular grocery trips, likely to take advantage of better value.
Competition from Club and Mass Merchandisers:
While grocers are winning against smaller format stores, they are losing snack unit sales to club stores and mass merchandisers. This highlights the strong appeal of bulk buying and potentially lower prices offered by these larger retailers, especially for price-conscious consumers.
Overview:
A recent NielsenIQ report analyzing snack sales trends reveals a dynamic shift in the market. Grocery stores find themselves in a central position, gaining snack sales from convenience, drug, and dollar stores while simultaneously losing ground to club and mass merchandisers. This situation is largely driven by thrifty consumers who are cutting back on overall snack spending and increasingly prioritizing value through larger pack sizes and private label options. E-commerce is also emerging as a significant channel for snack purchases. Despite the competition, grocery stores remain the most frequent destination for snack purchases.
Detailed findings:
Significant Unit Sales Shift to Grocers:
Grocers acquired nearly 160 million bags of chips, boxes of crackers, and other snacks from competitors in the 52 weeks ending March 22nd. This gain primarily came from convenience stores (38%), drug stores (29%), and dollar stores (22%).
Loss of Unit Sales to Club and Mass Merchandisers:
Conversely, grocers lost approximately 56 million snack unit sales to club stores (like Costco and Sam's Club) and mass merchandisers during the same period. This resulted in a $247 million loss in snack sales for grocers to these competitors.
Consumers Buying Snacks Less Often and in Larger Sizes:
NielsenIQ data indicates that 42% of shoppers are buying snacks less frequently. Additionally, 63% of consumers reported purchasing larger sizes of snacks as a cost-saving measure in the long run.
Private Label Snacks Gaining Favor:
The report suggests that retailers with strong private label snack offerings are well-positioned for success. An impressive 80% of consumers surveyed believe that private label snacks offer the same or better quality than name brands, with Gen Z expressing particularly positive views.
Growth of Online Snack Sales:
E-commerce is becoming an increasingly popular channel for snack purchases, with 294 snack unit sales moving from brick-and-mortar stores to online platforms during the measured period.
Grocers Remain the Top Destination for Snack Purchases:
Despite the shifts, grocery stores are still the place where consumers buy snacks most often, followed by mass merchandisers and then dollar stores.
Key success factors of product (trend):
Value for Money: Offering competitive pricing and larger pack sizes that align with consumers' desire to save.
Strong Private Label Offering: Providing private label snacks that are perceived as high quality or better than name brands, catering to the price-conscious consumer.
Availability in Bulk: Meeting the demand for bulk purchases, which is particularly attractive to club store shoppers.
Omnichannel Presence: Ensuring availability across both physical stores and online platforms to cater to the growing e-commerce trend in snack purchasing.
Key Takeaway:
Grocery stores are navigating a complex snacking market where they are successfully drawing customers from smaller retail formats by offering better value on multipacks and larger sizes. However, they face significant competition from club and mass merchandisers who excel at providing bulk options for thrifty consumers. The increasing acceptance of private label snacks and the growth of online sales are also critical factors shaping the future of snack retailing.
Main trend:
The main trend is a shift in snack purchasing channels driven by price-conscious consumers seeking value and larger pack sizes.
Description of the trend (please name it):
The trend is "Value-Driven Snack Channel Migration." This trend describes the movement of snack sales between different retail channels as consumers prioritize cost savings and bulk purchases, leading to grocery stores gaining from convenience and drug stores but losing to club and mass merchandisers.
What is consumer motivation:
Saving Money: The primary motivation is to reduce overall spending on snacks, reflecting broader economic concerns and the desire for better value.
Cost-Effectiveness through Bulk Buying: Consumers are motivated to buy larger pack sizes to achieve a lower price per unit over time.
Perceived Quality of Private Label: Consumers are increasingly motivated by the perception that private label snacks offer comparable or superior quality to name brands at a lower cost.
What is driving trend:
Economic Downturn and Inflationary Pressures: Rising costs of living are forcing consumers to be more mindful of their spending and seek out more economical options.
Increased Price Transparency and Comparison: Consumers have more tools and information available to compare prices across different retailers and formats.
Changing Perceptions of Private Label Quality: Improvements in the quality and variety of private label offerings have led to greater consumer trust and willingness to purchase them.
What is motivation beyond the trend:
Stockpiling and Reduced Shopping Trips: Buying in bulk may also be motivated by a desire to reduce the frequency of shopping trips, saving time and potentially further limiting impulse purchases.
Family Consumption: Larger pack sizes cater to families or households with multiple snack consumers.
Value Perception Beyond Price: While price is a key factor, the perceived value also includes the amount of product for the price and the quality relative to cost.
Description of consumers article is referring to:
This article primarily refers to a broad segment of price-conscious consumers in the United States who purchase snacks.
Who are them: Individuals and households who are becoming more careful with their spending on non-essential food items like snacks due to economic pressures.
What kind of products they like: They are interested in standard snack categories like chips, crackers, and potentially other snack items. The emphasis is less on specific brands and more on value and quantity. They show increasing preference for private label options.
What is their age? The article specifically mentions Gen Z's positive outlook on private label, suggesting this demographic is part of the consumer group. However, the broader trend of seeking value likely spans across various age groups, particularly those feeling the impact of economic conditions. We can estimate a wide range, potentially from teenagers and young adults to older adults, especially families.
What is their gender? The article does not specify gender as a differentiating factor in this trend, suggesting it affects consumers across genders.
What is their income? The primary driver is thriftiness, suggesting this trend is particularly relevant to middle-income and lower-income consumers who are more sensitive to price fluctuations. However, even higher-income consumers might participate in value-seeking behaviors during economic uncertainty.
What is their lifestyle: Their lifestyle likely involves regular consumption of snacks, whether for individual enjoyment, family treats, or entertaining. They are adapting their purchasing habits to fit budgetary constraints.
What are their category article is referring shopping preferences: They are showing a preference for purchasing snacks at grocery stores to consolidate shopping and potentially benefit from multipack savings. They are also drawn to club stores for bulk purchases. Online shopping is also becoming a preferred method for some.
Are they low, occasional or frequent category shoppers: The article implies they are likely regular snack consumers, as the shift in spending patterns indicates a change in where they frequently purchase these items rather than a significant reduction in consumption frequency overall.
What are their general shopping preferences-how they shop products, shopping motivations: They are motivated by price and value. They are willing to switch retailers and brands to achieve better cost savings. They are increasingly open to private label options and are exploring different retail channels like club stores and online platforms to find the best deals.
Conclusions:
The NielsenIQ report concludes that the snack market is undergoing a significant shift driven by price-conscious consumers. Grocery stores are in a unique position, capturing sales from smaller retailers but facing stiff competition from bulk sellers. The increasing acceptance of private label snacks and the growing role of e-commerce are key elements of this evolving landscape. Overall snack spending seems to be tightening, further emphasizing the importance of value.
Implications for brands:
Focus on Value Propositions: Brands need to highlight the value they offer, whether through competitive pricing, larger sizes, or demonstrating superior quality for the price.
Consider Private Label Partnerships: Name brands might need to consider collaborations or strategies related to private label offerings, either to compete directly or to fill specific market segments.
Optimize Pack Sizes and Pricing Strategies: Brands should analyze their pack sizes and pricing to align with consumer preferences for value and bulk buying where appropriate.
Strengthen Online Presence: Given the growth in online snack sales, brands need to ensure their products are readily available and effectively marketed through e-commerce channels.
Implication for society:
Increased Awareness of Food Spending: Economic pressures may lead to a greater societal focus on budgeting and making mindful food purchasing decisions.
Potential Shift in Retail Landscape: The trends could further reshape the retail industry, with different store formats playing increasingly specific roles in consumer shopping habits.
Implications for consumers:
More Focus on Price and Value: Consumers will likely continue to prioritize price and value when making snack purchases.
Increased Adoption of Private Label: Consumers may become even more accepting of and reliant on private label options for cost savings.
Greater Reliance on Bulk Purchases: A larger segment of consumers might opt for club memberships or bulk buying to save on snack costs.
Continued Shift Towards Online Shopping for Convenience and Potentially Better Deals: The convenience and potential for finding deals online will likely drive further adoption of e-commerce for snack purchases.
Implication for Future:
Further Consolidation in Retail: The trend might accelerate the growth of discount retailers and club stores, potentially impacting the market share of traditional grocery stores.
Innovation in Private Label: We could see more innovation and premiumization within private label snack offerings to further attract consumers.
Evolution of Snacking Habits: The focus on value might influence the types and quantities of snacks consumers choose.
Consumer Trend (name, detailed description):
The Thrifty Snacker: This trend describes consumers who are increasingly prioritizing price and value when purchasing snacks. They are actively seeking cost-effective options, leading them to explore different retail channels and become more receptive to private label brands and larger pack sizes.
Consumer Sub Trend (name, detailed description):
The Bulk Buyer: This sub-trend highlights the specific behavior of consumers who are opting for club stores and mass merchandisers to purchase snacks in bulk, driven by the desire for long-term cost savings.
Big Social Trend (name, detailed description):
The Value Seeker: This broader social trend reflects consumers across various categories becoming more conscious of their spending and actively seeking the best value for their money due to economic uncertainties and inflationary pressures.
Worldwide Social Trend (name, detailed description):
Global Economic Prudence: While the article focuses on the US market, the underlying driver of seeking value and economizing on non-essential spending is likely a worldwide trend influenced by global economic conditions and rising costs of living.
Social Drive (name, detailed description):
Economic Anxiety: This social drive stems from concerns about personal finances and the overall economic climate, prompting consumers to adopt more thrifty spending habits across various aspects of their lives, including snack purchases.
Learnings for brands to use in 2025:
Emphasize Value Clearly: Marketing and product positioning should explicitly highlight the value proposition, whether through price comparisons, highlighting larger sizes, or communicating the quality of private label offerings.
Adapt to Channel-Specific Needs: Recognize the different needs of consumers shopping at grocery stores versus club stores or online and tailor product offerings and promotions accordingly (e.g., bulk options for club stores, convenient multipacks for grocery stores, online-exclusive deals).
Invest in Private Label Quality and Perception: Brands that offer private label options should continue to invest in product quality and packaging to reinforce the perception of value and potentially attract even more consumers.
Leverage E-commerce Opportunities: Develop strong online sales channels and digital marketing strategies to capture the growing segment of consumers who prefer to purchase snacks online.
Strategy Recommendations for brands to follow in 2025:
Implement Dynamic Pricing Strategies: Utilize data and analytics to adjust pricing based on competitor offerings and consumer demand across different channels.
Offer a Range of Pack Sizes: Provide a variety of pack sizes to cater to different consumer needs and shopping occasions, from single-serve impulse purchases in grocery stores to family-sized and bulk options for value-seeking consumers.
Develop Strong Private Label Partnerships (for Retailers): Grocery retailers should focus on building strong relationships with manufacturers to offer high-quality and diverse private label snack options that resonate with consumers.
Enhance Online Shopping Experience: Brands and retailers should invest in user-friendly online platforms with clear pricing, easy navigation, and potentially subscription services for frequently purchased snacks.
Final sentence (key concept) describing main trend from article (which is a summary of all trends specified), and what brands & companies should do in 2025 to benefit from trend and how to do it.
In 2025, the core trend of value-driven snack channel migration requires brands and retailers to strategically adapt their pricing, pack sizes, and channel strategies, particularly by strengthening private label offerings and online presence, to effectively capture the attention and spending of increasingly thrifty consumers.
Final Note:
Core Trend: Value-Driven Snack Channel Migration: Consumers are shifting their snack purchases between retail channels primarily based on price and the perceived value offered, favoring grocers over convenience stores for standard purchases and club/mass merchandisers for bulk savings.
Core Strategy: Optimize for Value and Channel: Brands and retailers must strategically optimize their pricing, product sizes, and distribution across different retail channels to align with the value-seeking behavior of consumers.
Core Industry Trend: Rise of Private Label: The increasing acceptance and preference for private label snacks as a high-quality, cost-effective alternative is a significant industry trend that will continue to shape the market.
Core Consumer Motivation: Economic Prudence: The fundamental driving force behind these shifts is consumers' desire to save money and make their food budgets stretch further, leading to more calculated and value-oriented snack purchasing decisions.
Final Conclusion:
The snacking industry in 2025 is characterized by a consumer base keenly focused on value. Grocery stores are in a pivotal position, but success will hinge on their ability to effectively compete with club stores by offering compelling value propositions, particularly through robust private label programs and strategic pack size offerings. Understanding and catering to the "Thrifty Snacker" will be crucial for all players in the snack market.
Core Trend Detailed:
The core trend, Value-Driven Snack Channel Migration, signifies a significant change in how consumers approach purchasing snacks. No longer are these purchases solely driven by immediate cravings or convenience. Instead, economic factors are playing an increasingly dominant role. Consumers are actively comparing prices and seeking out channels that offer the best value for their money. This involves a strategic consideration of where to buy snacks, opting for grocery stores for regular needs and club or mass merchandisers for bulk purchases aimed at long-term savings. This trend reflects a broader shift towards more conscious and budget-aware consumer behavior in the food and beverage sector.
Key Characteristics of the Core trend:
Price Sensitivity: Consumers are highly attuned to the price of snacks and are actively seeking lower costs per unit.
Channel Switching: Consumers are willing to change where they buy snacks to find better deals and value.
Preference for Larger Sizes: There's an increased demand for multipacks and family-sized snacks to achieve cost savings through bulk buying.
Acceptance of Private Label: Consumers are increasingly trusting and choosing private label snack options as a cost-effective alternative to name brands.
Market and Cultural Signals Supporting the Trend:
High Inflation Rates: Persistent inflation in the cost of goods, including food, is driving consumers to seek out more affordable options.
Economic Uncertainty: Concerns about the overall economic climate and personal finances are leading to more cautious spending habits.
Growth of Discount Retailers: The continued success and expansion of discount grocery stores and club stores indicate a strong consumer appetite for value.
Increased Information Availability: Online platforms and price comparison tools empower consumers to easily compare prices across different retailers.
How the Trend Is Changing Consumer Behavior:
Consolidated Shopping Trips: Consumers are more likely to include snack purchases in their regular grocery trips rather than making separate trips to convenience or drug stores for impulse buys.
Bulk Buying Habits: More consumers are adopting the practice of buying snacks in bulk from club stores to save money over time.
Increased Scrutiny of Brands: Consumers may be less loyal to specific snack brands and more willing to try private label alternatives if they offer better value.
Greater Reliance on Online Shopping for Deals: Consumers are using online platforms to compare prices and potentially find better deals on snacks.
Implications Across the Ecosystem:
For Brands and CPGs: Brands need to adapt their pricing strategies, consider offering larger pack sizes, and potentially re-evaluate their approach to private label competition or collaboration. They must also focus on clearly communicating their value proposition.
For Retailers: Grocery retailers need to focus on offering competitive pricing on multipacks and building strong, high-quality private label snack programs. They also need to consider how to compete with the bulk offerings of club stores. All retailers need to optimize their online presence for snack sales.
For Consumers: Consumers will likely continue to benefit from a wider range of value-oriented snack options and potentially lower prices, but they may need to adjust their shopping habits to take full advantage of these opportunities (e.g., buying in bulk).
Strategic Forecast:
The trend of value-driven snack purchasing will likely continue and potentially intensify in the near term due to ongoing economic pressures.
Private label snack brands will likely see continued growth in market share.
Competition between different retail channels for snack sales will remain fierce, with each format emphasizing its unique value proposition (e.g., convenience vs. bulk savings).
E-commerce will become an increasingly important battleground for snack sales, with online retailers competing on price, convenience, and subscription services.
Areas of innovation (based on discovered trend):
Subscription Services for Bulk Snacks: Retailers could offer subscription services for frequently purchased snacks in bulk, providing additional discounts and convenience.
Enhanced Private Label Offerings: Further innovation in private label snack categories, including premium or gourmet options, could attract a wider range of consumers.
Personalized Value Recommendations: Retailers could leverage data to offer personalized recommendations for value-oriented snack options based on individual consumer preferences and purchase history.
Transparent Pricing and Value Communication: Brands and retailers could innovate in how they communicate the value of their snack products to consumers, highlighting cost per serving or comparisons to other options.
Final Thought:
The snack aisle is becoming a key battleground in the fight for consumer spending, with value emerging as the dominant deciding factor. Brands and retailers that can effectively cater to the thrifty snacker by offering the right products at the right price in the right channel will be best positioned for success in the evolving market.
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