Economically challenging times always catalyze changes in consumer spending and subsequent category shifts, and the past year was no exception. While dollar sales are largely up, that’s due to price increases that have followed in step with widespread supply-chain increases, so those increased dollar sales aren’t necessarily reflective of a healthier bottom line. Everyone is paying more these days, and that changes the way we shop.

Anyone who worked in food during the Great Recession (from December 2007 through June 2009) knows the pattern. While top national brands and snack industry category leaders aren’t generally seeing big losses, they’re not seeing widespread domestic growth, either. Shifts to private label for price-sensitive shoppers tend to take on greater intensity during economically challenging times, and our Circana data for the past year illustrates that shift in some key categories, particularly in corn snacks, RTE popcorn, and chocolate-covered snacks. Younger demographics have proven less brand-loyal than preceding generations, adding a new perspective to consider when analyzing your company’s market strategy.

Much like the namesake journeys of our elementary school days, a field trip for a trade journalist is an opportunity to stretch your legs, go someplace new, and learn. When Kemin Industries, Des Moines, IA, extended an invitation to a select group of food industry reporters to visit its Bakery Innovation Center (BIC) at their headquarters, I happily accepted—in small part for a change of scenery, but mostly because in-person learning opportunities have been in short supply since the start of the pandemic.

During the visit, the other journalists (including my BNP Media colleague Prepared Foods Chief Editor Bob Garrison) and I used all five senses in our tour of the BIC, a 2,300-square-foot facility equipped with an analytical lab, pilot-scale production equipment, and other features. We got to see the BIC staff in action, hear them explain the various services they offer tortilla and baked-good customers, get our hands on corn tortillas as we mixed and baked them in preparation for testing, smell the aroma of the cooking disks, and taste the fruits of our labor. Then, we got to put fresh-made tortillas through a number of tests. According to Marketing Director Courtney Schwartz, Kemin customers are invited to visit the BIC and share in these experiences.

Source: Circana, Total U.S. Multi Outlet w/ C-Store (Grocery, Drug, Mass Market, Convenience, Military and Select Club & Dollar Retailers), 52 Weeks ending April 23, 2023

This year, it’s important to look at unit sales changes to get a good indication of product line and category growth. Some brands have displayed fortitude, capably weathering the economic storm (so far…) due to a variety of factors. Barcel, the snack division of Grupo Bimbo, has seen success building on American demand for its distinctively spicy Takis Fuego flavor profiles, including in its potato chip offerings (we recognized Barcel’s amazing growth with our “Snack Producer of the Year” honors in 2021). Other success stories over the past year include:

• Frito-Lay’s Funyuns, a longtime snacking stalwart that continues to see better-for-you and other copycats chasing its wake
• Kellogg’s iconic Cheez-It brand, our 2022 SF&WB “Snack Producer of the Year”
• Herr’s cheese snacks, a company SF&WB covered in 2021 in honor of the company’s 75^th anniversary
• Frito-Lay’s PopCorners brand (which saw a nice boost after its Super Bowl ad spots in early 2023)
• Hershey’s pretzel brand Dot’s (which has been on a continual sales ascent since its introduction)

Affordable indulgences also play well in economically tight times, so it’s no surprise that the chocolate-covered pretzels from Campbell Snacks brand Snyder’s of Hanover performed so well in the “chocolate-covered salted snack” category. It’s also notable that private label is gaining ground in that category. Elsewhere in bite-sized indulgences, Ferrero continues to find widespread appeal in the U.S. for its Nutella-filled biscuit sandwiches.

Of course, we are full of contradictions, and are perfectly fine with occasional indulgences amidst dietary patterns that increasingly lean more better-for-you. We continue to see continued success of nutritionally improved alternative snacks like apple chips and better-for-you brands like LesserEvil, which performed quite well in the RTE popcorn category, a company that continues to make waves in the snack world.

Over the next year, as the economy levels out, we will closely monitor the new global snack landscape. If higher pricing remains as the new normal (and prices generally only move in one direction…), category consolidation will likely continue, making it harder for upstart, entrepreneurial brands to penetrate snack categories, creating more white space for innovation from the larger snack firms that can better weather these market challenges. SF&WB