The Evolution Of “Snackification”

Euromonitor International’s Jared Koerten offers an update on how lifestyle changes and COVID-19 quarantines are reshaping mealtime and snacking. 

Cleveland — Consumer lifestyles are evolving in ways that make time a scarce resource. Socioeconomic and demographic trends, such as urbanization and smaller households are contributing to more time-pressed routines. Technology and the on-demand economy are also reshaping consumer expectations. Smartphone apps, artificial intelligence, digital assistants and wearables have made convenience and time saving the new standards.

These factors are simultaneously creating demand for and reshaping expectations around convenience. While COVID-19 has disrupted all aspects of life, this underlying need for convenience persists. Changing work environments, school closures and public event shutdowns have only magnified time pressures. As such, people value their time more than ever and look to justify every moment of how they spend it.

The Implications For Eating

This time-savings mentality has two profound long-term effects on food and how people eat. First, innovations in ready meals, foodservice delivery, freshly prepared food and ready-to-eat offerings are allowing people to spend less time in the kitchen. These shifts are compounding with each successive generation. Millennials today spend less time cooking than their parents, who in turn spend less time cooking than their parents did. As a result, younger generations are becoming less skilled at cooking and are less likely to value time spent in the kitchen. 

Secondly, eating habits are becoming more fluid. In the drive for efficiency, many consumers are eschewing the traditional three square meals per day. This trend is particularly pronounced among millennials and gen Z. These generations are much less tethered to eating during traditional mealtimes than other consumers, according to Euromonitor International’s Lifestyles Survey.

The Snackification Of Food

These new eating habits are benefitting packaged snacks, with two factors working together to drive a significant increase in snacking. The push to spend less time and effort preparing food has generated strong demand for ready-to-eat products. Snacks have benefited, as most products can be consumed immediately without preparation. At the same time, snacks are particularly well-placed for growth in a world where eating habits are becoming more flexible. 

Rapid growth in snacks has led to the “snackification” of food, a long-term trend in which consumers snack in place of meals. The allure of convenient, portable and ready-to-eat snacks has driven this trend. Particularly in North America, Western Europe and Australasia, snacks have increasingly become a meal replacement.

Snackification has thrived during morning occasions when time pressures can be intense. As such, products like breakfast biscuits, snack bars, drinkable yogurts and multi-compartment packs have taken share from traditional sit-down options like cereals. Snackification in the morning has also made satiety a vital concern. If a person is snacking in place of a sit-down breakfast, that snack needs to contain fiber and protein to ensure that consumer will feel full until their next meal. 

The Rise Of Convenient Competitors

For all its success in the morning, snackification has seen only limited growth in evening occasions. Consumers are turning to other solutions to save time at dinner. These include meal kits, prepared food at retail and foodservice delivery or takeaway. Each of these solutions promises tasty food with a significant reduction in effort and prep time.

Restaurant aggregators (e.g. Grubhub Inc.) and delivery services (e.g. Uber Technologies Inc.’s Uber Eats) have made it easier to enjoy food from a wide range of restaurants. Ghost kitchens, also known as dark kitchens, have exploded onto the scene, preparing food from delivery-only facilities without seating areas or customer-facing storefronts. Automated kitchens, driverless vehicles and urban vertical farms are also receiving huge capital investments to transform the underlying economics behind the delivery of freshly made food. 

This represents a potential threat to the future of packaged snacks. As technology lowers costs, prepared food will capture more eating occasions. Freshly prepared food will become increasingly available on demand with new technologies to make ordering effortless. In September, for instance, Starbucks Corp. partnered with Alibaba Group’s Tmall Genie in China to allow shoppers to place voice orders for delivery within 30 minutes. Panera Bread Co. referred to 2019 as the “year of breakfast at Panera” and launched a delivery platform to capture the morning occasion.

Snackification & COVID-19: Short-Term Disruption, Long-Term Shifts

The COVID-19 pandemic significantly disrupted eating habits. Snacking shifted from an anytime, anywhere proposition to a mainly at-home occasion. Foodservice operators became entirely reliant on takeaway or delivery sales, and retail sales of all packaged food, including snacks, surged as eating occasions transitioned from out-of-home to in-home. Single-serve, impulse and portability have become irrelevant while people prioritize stockpiling, value and indulgence. 

In the short- to mid-term, homebound consumers will provide a relative reprieve for packaged snacks against competition from foodservice or prepared food. The recessionary fallout might lead consumers to cut back on non-essentials like snacks or trade down to private label products or value-focused retailers. People will become more conservative in their spending, and many will opt to continue eating at home — even as restaurants reopen — to stretch their budgets. 

In the longer term, however, the pandemic might intensify competition in convenience food. Consumers will be more familiar with ordering food online from both restaurants and retailers. The infrastructure for online fulfilment, which has been pushed to the limit during the pandemic, will see significant investments. New technologies and business models will allow foodservice to compete directly with packaged snacks for more occasions. 

As circumstances recover, snacks need to become ubiquitous to reach consumers anytime and anywhere. Cross-merchandising with new restaurant platforms and tailoring or personalizing products for specific dietary needs will also help keep packaged snacks competitive.

Contributor Info: Jared Koerten is the head of packaged food at Euromonitor International. He provides strategic insight and analysis on developments shaping the global food landscape, is an expert in market trends and has spent nearly a decade researching the industry. He can be reached at [email protected].