IRI State of Snacking: Before, Now and Beyond COVID-19

Although impulse buys are taking a hit during COVID-19, IRI expects on-the-go snacks to regain steam, especially with younger generations and Hispanic shoppers, once normal schedules return.

In a recent webinar, Sally Lyons Wyatt, IRI’s executive VP and practice leader, discussed the organization’s findings on snacking trends during 2019 and COVID-19 — and how both might influence the future of snacking.

IRI’s annual snack report, ‘Snacking as a Lifestyle,’ reflects a trend that’s been prevalent for about five years, Wyatt said. In 2019, 42% of consumers snacked three or more times daily, and 72% did so without planning ahead. Moving forward, price will be more important than ever, Wyatt noted — 72% of consumers already considered price before purchasing in 2019, though 86% prioritized taste first.

“There are too many [snacks] that fit needs across better-for-you, permissible indulgence, indulgence and treats that taste great, so the bar is high,” Wyatt said.

Snacking in Place in 2020

While the report dives deep into 2019 trends, disruption brought by COVID-19 has created massive habit shifts. While 2019 steered toward on-the-go snacking, recent trends are specific to consumers staying at home. The largest growth in core snacking categories for January 20-April 5 was kernel popcorn and frozen cookies, which saw dollar sales grow by 38.3% and 34.5%, respectively, as consumers want convenience with homemade results.

So far in 2020, larger pack sizes are growing in major categories like chips, cookies, bars and pretzels, a trend likely to stick as schools remain closed, though smaller sizes may see a boost when some consumers return to work. With many shoppers sheltering in place, the convenience channel’s food and beverage sales have taken a hit, with a 7.6% decline in snacking sales over 2019. At the same time, online snack dollar sales grew 46% and total food and beverage 32%.

Despite uncertainty around returning to everyday life, snacking is likely to continue growing, IRI predicts. Popular snack categories will remain strong, along with frozen handheld items, appetizers and snack rolls, and meat and cheese snacks, while private label products, including snacks, will see increased spend.

After the stock-up rush, March’s significant sales spikes are slowing. Total core snacking dollar sales grew 40% year-over-year the week ending March 15, and 35% the following week. For the week ending April 5, they grew 7%.

As SNAP households likely increase due to high levels of unemployment, the dollar channel, grocery and mass will see growth.

Looking at the 2007-2009 recession, snacking remained important: key takeaways included value, reaching consumers at home, aligning strategies with new consumer habits, education and sustainability, which are all relevant again, IRI found. Impulse purchases will likely decline, but brands can work to “interrupt” consumers shopping online. Brands may need longer term creative solutions if in-store sampling remains cut off. Pack size and architecture is critical as well, keeping in mind smaller, lower-priced options and competitive multiserve sizes. To engage new consumers, brands should consider discounts and coupons — something shoppers will remember — and deepen connections with loyal shoppers via online communities and highlighting at-home celebrations. As many turn to ecommerce, engaging is more crucial than ever, Wyatt noted.

“They’re craving that,” she said.

The second half of 2020 could bring innovations in functional and experiential snacks — such as more CBD and essential-oil infused snacks, Wyatt said. Snack pairing and kits will likely expand, along with personalized snacking that incorporates online and virtual reality experiences. But that’s if the COVID-19 rebound is quick, she noted.

Top Picks from 2019

Last year, core snacking dollar sales grew 3% year-over-year, outpacing total store and total food and beverage sales. This was driven mostly by price increases, with varied volume changes throughout the top 10 categories, which include potato chips, cookies, frozen novelties and refrigerated yogurt. Frozen novelties, for example, saw a 5.6% increase in dollar sales with a 2.3% volume increase, while refrigerated yogurt’s dollar sales declined 0.8% and volume declined 4.3%. But yogurt is likely to improve, Wyatt explained.

“Yogurt is on a comeback and was a big driver in recession years,” she said. “I think yogurt’s going to have a good year.”

Wyatt also noted that variety remained important to consumers in 2019 and that refrigeration was a prominent trend. Beyond the top 10, consumer favorites in 2019 included cheese and meat snacks, produce snacks and refrigerated dips. Additionally, she noted that consumers increasingly chose ready-to-drink (RTD) coffee as a snack replacement. Shelf-stable yogurt and yogurt drinks were also favorites. Cheese spreads also had a “big year in 2019,” Wyatt said, offering convenience plus a little bit of consumer engagement.

In 2019, IRI’s macrosnacking segments, wellness, permissible indulgence, true indulgence and treats (confectionary), all gained steam across savory and sweet, Wyatt explained. While true indulgence led with 27% dollar growth and 4.8% unit growth, with tortilla chips the top snack, the wellness set grew 28% in dollar growth and 1.9% in unit growth, fueled especially by meat and cheese snacks and refrigerated appetizers with wellness claims. Specifically, consumers were drawn to items with protein grams and calorie counts listed on the front of the pack, Wyatt said. Additionally, protein snacks continued to expand amongst meat, bar and plant-based innovations like hummus and bean snacks, she said.

There’s also plenty of room for more niche trends. While functional foods haven’t quite hit the masses, Wyatt said, 38% of consumers (mostly millennials) wanted snacks with probiotics, and 48% wanted fiber-rich options in 2019. Digestion-focused snacks’ dollar growth grew 16% last year, with success from Good Belly and Dannon Activia yogurts, for example. Additionally, Wyatt said, collagen-focused products saw 46% dollar growth, with new bar innovations from Bulletproof and Vital Proteins. Beyond protein and fiber, 54% of consumers want snacks with vitamins and minerals, and 64% want an energy boost — energy claims had 0.9% dollar growth.

In 2019, consumers also showed they truly care about ingredient origins, including non-GMO, gluten-free, organic and other labeling claims, Wyatt added, and 39% look for natural or organic callouts on packaging. They also want less sugar — low sugar snacks grew 4.9% in dollar sales, driven by innovations in bars, meat snacks (Oberto and Jack Link’s, for example) and ice cream, she said. Specifically, products offering ‘50% less sugar’ grew 102% in sales, and monk fruit’s dollar growth was 18%. Brands should ensure they choose the right sugar substitutes and claims for products, Wyatt said, noting pearl sugar as a newcomer to the market.

Although clean labels are popular, consumers are willing to accept longer labels for products they love. Snacks with 31 to 40 ingredients saw 3.9% dollar growth, while those with one to five ingredients saw 0.1% dollar growth.

“Balance is and will continue to be relevant,” Wyatt said. “Consumers want to have clean labels and products that are transparent, but at the same time they want some of their more indulgent or permissible indulgence products, and those just have more ingredients.”

Additionally, dietary preferences mattered more than ever in 2019, Wyatt noted, with snacks containing plant-based claims growing 15.2% in dollar sales. Alternative yogurt, ice cream and jerky performed well, as 13% of consumers looked for vegan snacks and 17% vegetarian. Peanut-free items also saw 2.2% dollar growth.

“Not all consumers have focused on this; even those who [did] may not be concerned with every snacking occasion,” Wyatt said. “Understand their preferences around clean label and [for] which product types and categories these types of claims are most relevant to them, and target your efforts accordingly. Some products will not appeal to the masses.”