Identifying High-Value Sweets, Snacks Consumers


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Brad Bane, Senior Vice-President, Survey Practice, Information Resources, Inc.

One of the great things about being an adult is the freedom to snack whenever and wherever you want. Before a meal, after a meal or in place of a meal. Forget being a kid in a candy store; being an adult in that store is so much better.

For candy and snack manufacturers and retailers, the question isn’t just who is buying their products, but rather how they can understand the relative value of one type of buyer versus another. They also have to understand the purchase motivations within those buyer groups.

While some companies start with the way people feel about brands and why they make their selections, the gap between what people say and what they do has been widening in recent years. Companies are increasingly focusing on how people behave, as indicated by purchase data, and then using what they say via follow-up conversations such as surveys and focus groups to explain it.

Sometimes called a behavioral approach to equity, this reflects the growing sentiment that while it’s lovely to be liked, it’s better to be bought.

High-Value Customers

One way to approach behavioral equity is to combine absolute dollars spent and share of wallet. By dividing a given buyer base into quadrants (as shown below), a different view of loyalty emerges, allowing for the development of both brand and competitive strategies.

Delight Me: Share of wallet 50%+ | above-median category spend

Value Me: Share of wallet 50%+ | below-median category spend

Convenience Me: Share of wallet >50% | above-median category spend

Surprise Me: Share of wallet >50% | below-median category spend

If a brand finds itself in either the Delight Me or Value Me quadrants, the objective is to devise strategies for maintaining the high share of wallet. The brands should be present if and when someone decides to increase the absolute dollars spent within the category.

If a brand finds itself in either the Convenience Me or Surprise Me quadrants, the objective is to innovate, in both go-to-market strategies and products, to encourage people to trade up to the quadrant directly above.

Suppose a brand happens to have a decidedly different profile than one of its competitors; in this case, the first step is understanding and identifying how its successes and those of its competitors may differ.

Manufacturer View: Chocolate Sector

To provide an example of this analysis from the point of view of candy manufacturers, consider the chocolate sector, where two manufacturers — Manufacturers A and B — make up more than 60 percent of category sales. Manufacturer A’s brands generate almost half of their sales from the 15 percent of buyers in the Delight Me quadrant, with higher dollars per buyer than Manufacturer B in every segment (as shown below).

Latest 52 weeks ending 01/22/2022 from IRI’s OmniConsumer Scan Panel (not NBD adjusted)

Manufacturer A’s opportunity lies in trading its buyers up from the Convenience Me to the Delight Me segment and attracting the higher-spending but less loyal Manufacturer B’s customers from their Convenience Me segment.

Manufacturer B needs to deep dive into its less loyal but overall larger spending (as a percent of sales) Convenience Me segment and figure out how to convert them into Delight Me through creating more detailed demographic and attitudinal profiles.

Recognizing that the results might differ if you moved away from the manufacturer level and looked at the brand level, in aggregate different strategies emerge for each company. Still, more research from Information Resources, Inc. (IRI) would give Manufacturer B additional insight into its buyer profiles to implement strategies and tactics that lead to trading up. At the same time, Manufacturer A would be able to better understand the differences between their Convenience Me segment and Manufacturer B’s.

Retailer View: Salty Snacks, Chocolate Sectors

For retailers, the same approach to analysis leads to similar types of insights. Comparing Retailer Y and Retailer Z behavioral equity yields very different buyer profiles (as shown below).

Latest 52 weeks ending 01/22/2022 from IRI’s OmniConsumer Scan Panel (not NBD adjusted)

Retailer Y represents a more robust buyer profile than Retailer Z based on both share of wallet and absolute dollars spent. Retailer Y’s opportunity lies in protecting its current business from Retailer Z by optimizing the value proposition and path to purchase.

Retailer Z needs to understand how to evolve from being a convenience-oriented source of snacks to the retailer of choice for stock-up trips through creating more detailed demographic and attitudinal profiles of its buyers.

With additional IRI research, Retailer Z would have insight into the barriers preventing it from becoming the destination of choice for snack stock-up. In contrast, Retailer Y could further understand the Delight Me segment to help them better protect their most valuable shoppers.

Creating Deeper Shopper Profiles

Behavioral equity is a great place to begin analytically. Starting with behaviors often makes it easier to cascade the principles of brand value consistently throughout the organization, creating a unified view of what different segments are worth to the organization. The next step is to understand what drives those purchase decisions and ultimately how to influence them. That’s where more in-depth profiling comes in.

Below the surface of buying behaviors is a demographic layer of information — from a household’s annual income to its composition to the geography in which it resides — that provides additional insight into who is buying to target them throughout the path to purchase.

On an even deeper level, creating detailed personas via more survey-based research provides insight into buyer attitudes and motivations. What are their beliefs as they relate to health, wellness and the role of snacking in their lives? How do they decide where to shop and what to buy? And where along their journey is there the most potential to influence them? In short, this reveals the messaging and tactics that will be most impactful in maintaining and growing the quadrants of interest.

The stronger the relationship manufacturers and retailers can establish between what consumers do and what they say, the easier it is to deliver what they really want — more candy and snacks.

Contributor Info: Brad Bane is the senior vice-president for Information Resources, Inc.’s survey practice, leveraging research and implementing strategies to drive sales, improve marketing, enhance product development and innovation and optimize targeting efforts. His expertise includes accelerating growth in existing and new survey businesses, developing go-to-market strategies for innovative survey solutions and rebranding companies and reshaping marketing departments to drive demand generation. He can be reached at [email protected].