CHICAGO — Inflation, current supply chain issues and other factors are likely to weigh on consumer purchases and create headwinds for the snacks category in the coming months.

“The big challenge for the snacks players is to add value to products so that consumers are willing to pay higher prices for them,” said Ann Scott Livingston, food and nutrition research analyst at Euromonitor, during a presentation at Sweets & Snacks. Expo held May 23-26 in Chicago. “In the case of snacks, the value proposition includes not only unit price, but also convenience, including packaging and shipping options.”

There are opportunities for snack producers to add value through digitization, she said. Expanding remote work remains a top priority for 70% of companies surveyed by Euromonitor.

“This increase in time spent at home poses a serious problem for snackers,” Ms Livingston said. “While the number of consumers making impulse purchases is declining, the number of those who buy products online continues to grow.”

Euromonitor data shows that almost half (46%) of consumers worldwide now buy groceries online at least once a month.

“The rise of e-commerce is one of the biggest impacts of the pandemic,” said Ms Livingston. “Many companies have launched their own direct-to-consumer websites, not only to have a new sales channel, but also to better understand consumers and test new products.”

Marked by consumers’ desire for greater speed and convenience, delivery is playing an increasingly important role in snack consumption. Historically, e-commerce has had low penetration in the snack food industry. Poor cold chain infrastructure in many markets limits the rapid delivery of products such as ice cream and yogurt in particular.

A new generation of third-party platforms solves these problems by delivering snacks and other typical convenience store products to shoppers in 30 minutes or less. These super-fast delivery services have their own fulfillment centers, commonly referred to as dark shops.

“Dark shops are located close to the end consumer, allowing orders to be filled and delivered within minutes,” said Ms Livingston. “With short delivery windows, these services enable urban consumers to use online ordering for impulse purchases.”

She pointed to GoPuff as an example of super-fast delivery. Founded in 2013, the Philadelphia-based company operates hyperlocal fulfillment centers strategically located in over 900 cities. Late last year it expanded to the UK, its first international market.

Dark GoPuff stores stock their own range of merchandise, eliminating the need for couriers to stop at regular outlets to pick up merchandise. This fast delivery attracted the attention of investors. GoPuff has been valued at $15 billion after raising $1 billion last summer. The company has acquired several online stores and delivery services, including app-only coffee and ice cream shop Bandit, alcoholic beverage chains BevMo and Liquor Barn, and European instant delivery services Fancy and Dija.

According to Ms. Livingston, the ultra-fast delivery space still faces challenges. Many consumers are looking to return to pre-pandemic shopping behavior, which usually means shopping at physical outlets rather than shopping online.

“Furthermore, with inflation hitting levels not seen in years, consumers who want to cushion this price increase may be more hesitant to pay a super-fast delivery surcharge than they were last year, especially as snacks may still easy to get in the store,” she said.

Livestreams are another tool snack makers can use to encourage impulse buying online. A 2022 Euromonitor survey found that a third of shoppers use live streaming to buy goods or services. E-commerce live streaming has taken root in China, where 67% of consumers use the channel to shop. Snacks are among the best categories purchased through live streaming in the country.

E-commerce live streaming is just starting to emerge in North America and Europe, with major social networks taking notice. Facebook, Instagram, Pinterest, and TikTok have launched live streaming e-commerce or online shopping features.

In 2020, the Nestle KitKat Chocolatory team introduced Australia’s first Facebook online shopping experience. Digitally, chocolate experts showcased confectionery, product demos and limited-time offers. Viewers could make purchases directly on the air.

“The main reasons consumers use live streams are because they allow them to get discounts from brands and make it easier to understand product features,” Ms. Livingston said.

According to Euromonitor, eight out of ten consumers watch TV or movies at least once a week, and half play video games at least once a week. The market research company also found that half of consumers eat snacks at home, while only 18% reported eating snacks on the go in 2022. – to 29-year-old demographic.ICNOW Magnum Ice Cream Campaign by Unilever on Twitch Video Game Stream in Spain

“There’s clearly room for snacks in this home entertainment,” Ms Livingston said. “More snack brands should be developing products and promotions for such home occasions.”

One example is the partnership with PlayStation. Brands such as Nestle’s KitKat and PepsiCo’s Doritos are partnering with the video game brand, giving players the chance to win a free game console when they purchase a snack.

Another example is ICNOW (Ice Cream Now) from Unilever. The platform is dedicated to finding ice cream opportunities in the instant delivery space. The company debuted in Spain last year with a campaign that allowed gamers to watch the tournament live via the Twitch video platform and order pints of Magnum live. The company partnered with a local on-demand delivery service to deliver orders within 10 minutes.

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