Snacking shapes grocery aisles
As snack brands become a more significant part of shopping lists, grocers are rethinking how to best serve consumers.
Why it matters: The snacking category has grown faster than the total food and beverage market in the U.S., per NielsenIQ.
- Meanwhile, increased prices at the grocery aisles have caused consumer behaviors to shift with many consumers valuing price over brand.
What they're saying: "Brand loyalty is weakening," says Lorelei Bergin, NielsenIQ's vice president of North American retail, at a Groceryshop session last week.
- Private label's share of the total market was 13.5% and among the mass, value and club retailers, that share was 16.7%, per NielsenIQ.
- Around 40% of consumers say that store-branded products are a good alternative to branded items, while 35% believe private labels are higher or equal in quality to name brands.
- As a result, retailers must develop good robust segmentation and personalization to compete, Bergin says.
Zoom in: Value retailers, such as mass, dollar and club retailers, are dominating the snack market.
- "They've been able to create more assortment on the shelves to make sure that the consumers continue to keep shopping in that space," Bergin says.
- Multipacks, for instance, have become more popular than single sizes.
- "Because we are a nation of convenience, now we create variety, we create savings, no inconvenience," Bergin says.
The intrigue: Snackers are also finding a home online, with 44% of buyers purchasing online.
- That's causing online snack sales to outpace in-store sales, per NielsenIQ's data.
- Consumers see online channels as a way to experiment and discover beyond what's available in stores.
State of play: As private label food sales grow, private equity and strategics alike are hungry for tasty snacking deals.
- Insignia Capital-backed jerky brand Tillamook Country Smoker is working with Houlihan Lokey on a sale. (More on that below).
- The Ontario Teachers' Pension Plan (OTPP) is exploring a sale of Shearer's Foods that could value the salty snacks maker at more than $3 billion.
- In March, jerky brand Western Smokehouse was acquired by PE firm AUA Private Equity Partners from Monogram Capital Partners.