IRI’s Lyons Wyatt Discusses How COVID-19 Is Impacting Confectionery, Snack Sales

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Cleveland — With uncertainty abounding, strong data sets and understanding shoppers’ behaviors become critical to developing strategic plans. To get an insightful review of the category, including an early look at the possible impact of COVID-19, Candy & Snack TODAY spoke with Information Resources, Inc.’s Sally Lyons Wyatt, executive vice-president and practice leader, client insights.

Candy & Snack TODAY: How did candy and snack sales perform during the early stages of the pandemic?

Lyons Wyatt: Core snacking, which includes treats, saw a significant spike in sales during weeks ending March 15, up 40 percent in dollars sales vs year ago and March 22 ( up 35 percent). However, consumers began adjusting to more in-home activities after those two weeks so there has been growth but not as strong.

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Candy & Snack TODAY: Did any segments standout as leaders?

Lyons Wyatt: There have been many categories which have driven significant growth within the COVID-19 epidemic. We analyzed the average increase during the COVID-19 time frame compared to the average increase in 2019. In doing so, it allowed us to see which categories have surpassed their 2019 growth rate.

Out of the top 10 based on dollar sales — crackers, cookies, tortilla chips, frozen novelties and potato chips have seen strong growth rates above the 2019 average.

Candy & Snack TODAY: How did consumer purchasing habits shift during this period?

Lyons Wyatt: We witnessed three major purchasing trends take place during COVID-19.

During the monitoring phase of the pandemic  consumers practiced “Passive Prevention.” During this time period we saw increased sales of virus prevention items, e.g., hand sanitizer, household cleaners and vitamins.

As we moved towards containment consumers began “Active Preparation/ Prevention.” In addition to the above items, consumers began to stock up on necessities and symptom relief, such as frozen and shelf-stable foods, toilet paper, sports drinks, cold medicine and pain relief. During this timeframe, we also witnessed declines in away-from-home consumption and small-format sales.

Once in lockdown, consumers practiced “Cocooning” for a couple weeks. During these weeks, we saw an increase in sales of the above items plus products enhancing at home experiences, including DVDs, streaming services, salty snacks, ice cream and chocolate. Consumers began purchasing more online and/or utilized frictionless food delivery. In addition, we saw massive declines in away-from-home consumption.

We have seen shifts to larger pack sizes across select product categories like chocolate, non-chocolate, cheese snacks, corn snacks, pork rinds and RTE popcorn, as consumers are not seeking as many “on the go” snacks today.

Candy & Snack TODAY: The way shoppers view the candy aisle has improved vastly during the past five years. How can the industry keep this positive moment going moving forward?

Lyons Wyatt: There are a few different ideas that the industry can continue to explore.

One is leveraging bulk. There are some retailers that have redefined the confections area in the store. During the NCA State of the Industry presentation, we included pictures from Lunds & Byerlys (Holdings, Inc.) and Winco (Foods, Inc.) using bulk in a way to make the areas engaging, colorful and more like a candy store.

Additionally, secondary displays that are fun and captivating not only interrupt shoppers on their journey in the store but enhance their time in the store. Seasonal is a typical time to execute secondary displays and are easy to tie in with the theme of the holiday. To find growth outside of the seasons, I recommend tying in displays with other celebrations.

Candy & Snack TODAY: While dollar sales for the category were up in 2019, we saw some volume declines. What does this mean for the industry and what can they do to reverse negative volume trends?

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Lyons Wyatt: The answer is somewhat trite, but we need to ensure the right confection items are in the right stores and at the right price. This is easy to say but not always easy to do with all the variety available.

Retailers needs to ensure there is a good mix of consumer favorites and artisanal options that align to the shoppers that live in the vicinity of their store. Optimally, there would be a store-specific assortment and pricing that aligns to the area but it could also be the right assortment and prices for a chain at a minimum.

Once you have the right mix and price, then retailers have to tell consumers about it and offer reasons to shop their stores or website, or both. By getting distribution and pricing right, then trips and purchases, whether online or brick and mortar, will follow. That will increase volume.

Candy & Snack TODAY: With ecommerce sales for the category largely being driven by variety and price, how can traditional retailers leverage these factors at brick-and-mortar?

Lyons Wyatt: For retailers that offer click and collect, they can have the best of both. The assortment in the store can be the faster moving items combined with some artisanal options but make the confections area fun and engaging. They can then leverage their online site to offer additional options, and treat it like a treasure hunt for shoppers if their search engine allows. This will broaden their mix of confections and encourage consumers to shop.

For retailers who do not have click and collect, then their stores will need to entice consumers to come in and shop because of the fun merchandising and making every day a holiday for consumers to shop confections.

Candy & Snack TODAY: How important is developing a true omnichannel approach for retailers?

Lyons Wyatt: Omnichannel is important because you want to be where the consumer is as much as possible. By having an omnichannel presence, retailers can provide the everyday favorites but also more varieties outside of the core without needing all of the assortment in the store.

Candy & Snack TODAY: We’re starting to see younger generations having more impact on growth for the category. How can candymakers ensure they are remaining relevant to these demographics?

Lyons Wyatt: Staying relevant requires closely monitoring their attitudes and purchase dynamics. We have seen that variety, limited-time offers and reformulations are strategies that are winning, especially the younger generation.

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Candy & Snack TODAY: With the buzz around plant-based and vegan items, is there any confusion among consumers about the difference between the two? How do consumers view these claims and is there a preference for one?

Lyons Wyatt: The U.S. has a spectrum of consumers. On one side are consumers who are very informed and make choices for themselves and their families that align to their goals. The goals might be managing and/or preventing disease states and/or diets, etc. On the other side of the spectrum are consumers who eat and drink because they are hungry and thirsty. Then you have everything in between.

What we see with plant-based is three-fold: First, some consumers are looking for ingredients that are plant-based either for a diet or because they feel these foods are better for them. Second, some want items aligned to a plant-based diet. Third, some are looking for both. This is similar for vegan diets. Consumers on the “informed” side of the spectrum, understand the differences in the diets and ingredients. However, the majority of consumers do not.

By leveraging our partner, Label Insights, we are able to see the growth of products based on diet claims. When looking at chocolate and non-chocolate plant-based diet candy is growing faster than vegan diet candy, but both are growing.

For more insights from Lyons Wyatt on current purchasing behaviors view her Snacking: Before, During and After COVID-19 webinar, part of NCA’s  Sweets & Snacks On Demand Unwrapped series. Access to the webinar archive, as well as the rest of the On Demand Unwrapped series, is available to 2019 and 2020 Expo registrants, NCA members and retail partners. C&ST