Snack makers support digitization | Food Business News

CHICAGO – Inflation, ongoing supply chain challenges and other factors are likely to affect consumer purchasing and create headwinds for the snack category in the coming months.

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

There are opportunities for snack makers to add value by accepting digitization, he said. Deploying remote work remains a top priority for 70% of companies surveyed by Euromonitor.

“This more time spent at home poses great challenges for snack players,” Ms. Livingston said. “While consumers who make impulse purchases are declining, those who buy food online have continued to grow.”

Euromonitor data shows that almost half of the world’s consumers (46%) now buy food online at least once a month.

“The growth of e-commerce is one of the most important impacts of the pandemic,” Ms. Livingston said. “Many companies have launched websites for their direct consumers, not only to have a new sales channel, but also to get to know consumers better and try new products.”

Marked by the desire to achieve greater speed and convenience among consumers, shipping plays an increasingly important role in the consumption of snacks. E-commerce has historically had a low penetration in the distribution of snacks. The undeveloped cold chain infrastructure in many markets has particularly limited the rapid delivery of products such as ice cream and yogurt.

A new generation of third-party platforms faces these challenges, providing shoppers with snacks and other regular in-store products in 30 minutes or less. These ultra-fast shipping services have their own filling centers, commonly called dark shops.

“Dark stores are close to the final consumer, and allow orders to be filled and delivered within minutes,” Ms. Livingston said. “Short shipping windows allow these services for city consumers to use online orders to make impulse purchases.”

GoPuff referred to it as an ultra-fast delivery case study. Launched in 2013, the Philadelphia-based company operates hypermarket filling centers strategically located in more than 900 cities. At the end of last year it expanded to the UK, the first international market.

GoPuff’s dark stores are stocked with their own inventory of products, eliminating the need for couriers to stop at brick-selling outlets to pick up items. This quick submission has attracted the attention of investors. GoPuff was worth $ 15 billion after raising $ 1 billion last summer. The company has acquired a number of online retailers and delivery services, including the application-only coffee and ice cream shop Bandit, BevMo and Liquor Barn and the European instant delivery services Fancy and Dija.

The ultra-fast delivery space still faces challenges, Ms. Livingston said. Many consumers are eager to return to pre-pandemic shopping behaviors, which usually means prioritizing shopping at brick-based retail premises over online shopping.

“Moreover, as inflation reaches levels not seen in years, consumers looking to alleviate these price increases may be more reluctant to pay a premium for ultra-fast shipments than last year, especially because they can make snack products. It is still easily available in the store,” he said.

Live streaming is another tool that snack makers can use to encourage online shopping. A 2022 Euromonitor survey found that one-third of shoppers use live streaming to purchase products or services. Direct playback of e-commerce has intensified in China, where 67% of consumers use the channel for shopping. Snacks are among the top categories purchased through direct broadcasts in the country.

Live streaming of e-commerce has only just begun to emerge in North America and Europe, and major social networks are gaining attention. Facebook, Instagram, Pinterest and TikTok have launched live e-commerce playback or online shopping features.

Nestle’s KitKat Chocolatory team presented Australia’s first shopping experience in Facebook on 2020. They were chocolate experts in the digital experience showcasing bakery creations, product demos and limited-time offerings. Viewers were able to make purchases directly via live stream.

“The main reason consumers use live streaming is that it allows them to get brand discounts and make it easier to understand the features of the product,” Ms. Livingston said.

Eight out of ten consumers watch TV or movies at least once a week, and half play video games once a week, according to Euromonitor. The market research firm also found that half of consumers eat snacks at home, and only 18% said they ate snacks in 2022. 43 percent said they eat snacks while watching TV or streaming video content, up from 53% for 15. – 29-year-olds.

“There’s a clear opportunity here for snacks at these home entertainment sessions,” Ms. Livingston said. “More snack brands need to develop products and promotions for these moments at home.”

The collaboration with PlayStation provides an example. Nests including Nestle’s KitKat and PepsiCo’s Doritos have merged with the video game brand, allowing players to win a free game console when they buy a snack.

Another example is ICNOW (Ice Cream Now) from Unilever. The platform is aimed at finding opportunities to get ice cream in the immediate delivery space. Last year he launched a campaign in Spain, allowing players who were watching a live tournament via the Twitch video platform to order Magnum graffiti in the stream. The company teamed up with a local on-demand delivery service to place orders within 10 minutes.

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