Snackification - Sweets and Snacks Expo

Snackification: The Future of Occasions in a Post-Pandemic NormalAnne Scott Livingston, research analyst

Sweets and Snacks Expo 2022

Euromonitor International network and coverage

ABOUT EUROMONITOR INTERNATIONAL 3

© Euromonitor International

Contents


Context

Provide convenience and indulgence

Develop healthy snacks

Embrace digitalization

Conclusion

4

Context


What is “Snackification”?


Urbanization and consumer lifestyles with new time pressures are driving consumers to seek more pre-prepared food solutions.

Snacks, which are portable and ready-to-eat, are a primary beneficiary of these new eating habits.

Snackification is the trend in which snacks capture share from traditional meals.

6

Source: Euromonitor International

What happened during the pandemic?


A lack of consumer mobility under COVID-19 completely reshaped historic snackificationtrends.

Once an “anytime, anywhere” convenience, snacking moved to become an “always at home” occasion, reducing or even removing impulse and immediate consumption.

7


Snackification evolves, influenced by current trends

CONTEXT

Value Health Mobility

8


0%

2%

4%

6%

8%

Sweet Biscuits,Snack Bars and

Fruit Snacks

Confectionery Ice Cream Savoury SnacksGro

wth

rate

s of R

etai

l rsp

US$

(cur

rent

, fix

ed-e

xg-Y

rCur

)

Global unit prices growth ratesof snacks main categories

2020 2021 2022

4.37.5

0.0

5.0

10.0

World

Global Consumer Price Inflation Baseline Forecast 2019-2023% annual rate

2019 2020 2021 2022 2023Source: Euromonitor International Macro Model Note: Data from 2022 onwards are forecasts

6.03.6

-5.0

0.0

5.0

10.0

World

2019 2020 2021 2022 2023Source: Euromonitor International Macro ModelNote: Data from 2022 onwards are forecasts

Global Real GDP Growth Baseline Forecast 2019-2023

Global economic outlook and inflation challenge snacks players

CONTEXT

Source: Euromonitor International (preliminary estimates for 2022)

9


Health has become a top priority for consumers as a result of the global pandemic

CONTEXT

30

40

50

60

Generation Z Millennials Generation X Baby Boomers

2019 2020 2021

Source: Euromonitor International Voice of the Consumer: Lifestyles Survey fielded Feb-Mar; 2019 n=40,464; 2020 n=41,231; 2021 n=40,732

Consumers Closely Reading the Nutrition Label of Food and Beverages Across Generations, 2019-2021% of respondents

0

400

800

1,200

0

300

600

900

Snacks Staple Foods CookingIngredientsand Meals

Dairy Productsand

Alternatives

USD

‘000

Number of SKUs Retail Value RSP


Number of SKUs with Health Claims vs Market Size of Packaged Food Industry, Global 2020‘000 SKUs


10

Working, entertaining and shopping, consumers are spending much more time at home

CONTEXT 11


-20

-10

0

10

20

30

40

50

60

2017 2018 2019 2020 2021

E-Commerce Food/drink/tobacco specialists Total


Global Growth of Snacks: Selected Retail Distribution Channels, 2017-2021Retail value RSP growth %

15%

25%

35%

45%

I like to browse instores even if I don'tneed to buy anything

I like to visit shoppingmalls

I often make impulsepurchases

2019 2021Source: Euromonitor International Voice of the Consumer: Lifestyles Survey, fielded Feb-March 2019, n=40,646; 2021, n=40,732

Global Shopping Habits, 2019/2021Share of respondents

Rewards-based

snacking or treating

Meal replacement

snacking

Distracted snacking

Motivations for snacking

CONTEXT


Motivations for Snacking

Context

12


Consumers are looking for new varieties and value-for-money products

PROVIDE CONVENIENCE AND INDULGENCE

Image source: cliosnacks.com

0 10 20 30 40

Low price

Health and nutritional properties (e.g.…

Hormone free

Supports local communities

Strong or well-known brand

Environmentally conscious or eco-friendly

Non-GMO (genetically modified organism)

All natural

Value for money

Speciality or new variety

Global Food and Beverages Purchase:Willingness to Pay More in 2021

Source: Euromonitor Voice of the Consumer: Lifestyles Survey 2021, n=40,732

Share of respondents (%)

14


For signature brands, creating new formats allows players to tap into new snacking occasions


0

20

40

60

80

100

120

140

160

180

Tablets Chocolate Pouches and BagsCountlines Boxed assortments

Source: Euromonitor International Via, daily tracking between Jan 2019 and Dec 2021 in 40 countries

Chocolate Confectionery SKU Count: Q1 2019-Q4 2021Number of SKUs (‘000)

Image source: www.amazon.com Image source: www.kitkat.com.au

15


Image source: Levain

Image source: Sogurt


16


Snacks players innovate with new varieties of well-known products

Image source: www.thegrocer.co.uk

Image source: Zenko Superfoods

17


In search of new flavors and sensory experience, spicy gains popularity


Image source: Doritos Image source: Cheetos

18


Image source: Tostitos Image source: Ruffles

Growing demand for affordability boosts discounters and private labels


Image source: Grenade

Image source: groceries.aldi.co.uk

19

© Euromonitor International Source: Euromonitor International

Smaller pack sizes offer premium products while keeping price per unit within market range


Image source: greenandblacks.co.ukImage source: Ferrero Rocher

20


Leading snack players are expanding into the health and wellness space


0% 10% 20% 30% 40% 50% 60% 70% 80%

Shifting eating occasions

Plant-based eating

Supply chain issues

Sustainability

Health and wellness

Digital/technology shifts

Source: Euromonitor International Voice of the Industry: Packaged Food Survey fielded Mar 2022, n= 350

Expected Trends to Have an Influence on Food Sales Across the Next Five Years for Industry Professionals% of respondents

22

0% 10% 20% 30% 40% 50% 60%

Recommended in social mediaRecommended by friends/family

Digestive healthRead/heard that it is good for me

Medical recommendationDiet fits my day-to-day lifestyle

Weight loss or managementBuild/support immune system

To improve my appearanceMakes me feel healthier

To improve my fitness

Reasons for following diets high in protein and with low/no carbohydrates

High-protein Low/no CarbohydratesSource: Euromonitor Voice of the Consumer: Health and Nutrition Survey 2022, n=2,102 for high protein and 1,681 for low/no carbohydrates

With weight management as a concern, lifestyle diets such as keto, paleo or low-carb thrive

DEVELOP HEALTHY SNACKS 23


DEVELOP HEALTHY SNACKS

© Euromonitor International Image source: halotopcreamery

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Image source: Hilolifesnacks

0%

10%

20%

30%

40%

50%

60%

2019 2020 2021 2022

“Vitamins and supplements are important to myoverall health and nutrition”

Agree or strongly agree

Lines between food, supplements and medicine blur as functionality becomes a top priority


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2019 2020 2021 2022

Frequency of taking vitamins and supplements

At least weeklySource: Euromonitor Health and Nutrition Survey, fielded January to February 2019-2022 in 20 markets; 2019: n=20,166; 2020:n=21,739; 2021:n=21,456; 2022:n=20,236

25


Source: Euromonitor Health and Nutrition Survey, fielded January to February 2019-2022 in 20 markets; 2019: n=20,166; 2020:n=21,739; 2021:n=21,456; 2022:n=20,236

Image source: VivaVitaTecuidaImage source: Mentos


26

Limiting intake of refined sugar is one of the most widespread dietary preferences/restrictions


0% 25% 50% 75%

...increase my protein intake"

...limit my intake of bread, pasta, carbs"

...increase my intake of fiber"

...limit my intake of saturated fat"

...limit my intake of salt"

...limit my intake of refined sugar"

...drink more water"

Share of respondents

Dietary Preferences / Restrictions 2022

“I am trying to…”

Source: Euromonitor Voice of the Consumer: Health and Nutrition Survey 2022, n=20,236

0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

2021

2020

2019

Share of total SKU count

Presence of the Claim“No Sugar” within Confectionery Globally

Source: Euromonitor Product Claims and Positioning System

27


Image source: Lilys.com


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Source: www.hersheyland.com

0%

5%

10%

15%

20%

25%

I am a vegan I am a vegetarian I am flexitarian (Ido not typicallyeat meat or fish,

but will consume itoccasionally)

I am trying to limitmy meat intake

Dietary Preferences and Restrictions

2020 2021 2022

Plant-based snacks growth supported by increasing limitation of meat consumption


Sources: Euromonitor Voice of the Consumer: Lifestlyes Survey, fielded January to February 2020-2022 in 40 markets; 2020 n:41,231; 2021 n:40,732; 2022 n:39,832 and Euromonitor Voice of the Consumer: Health and Nutrition Survey, fielded January to February 2020-2022 in 20 markets; 2020 n:21740, 2021 n:21459, 2022 n:20236

Image source: Cadburyuk Image source: lindt.co.uk

29


Plant-based ice cream is the category with the highest growth in the last five years within the snacks industry**CAGR 2017-2022 of plant-based ice cream: 21% in Retail RSP US$ (curr, fixed-exg-YrCur)


30


Image source: benandjerrys

Image source: eluniverso.com

Image source: magnumicecream

Image source: heladosfreddo

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Black labels in LatamPepsiCo in UKGovernment regulations speed

up the development of healthy snacks


Source: https://www.walkers.co.uk/

32


Remote working, digital strategies, e-commerce and omni-channel distribution: priorities for businesses


0% 20% 40% 60% 80%

Invest in automation and new supplychain technologies (IoT, AI, robotics…

Improve internal communicationchannels

Invest in employee health and welfare

Develop crisis contingency andresponse procedures/plans

Improve client/customercommunications

E-commerce/omni-channel distribution

Reshape and implement digitalstrategies

Expand remote working

Source: Euromonitor International Voice of the Industry: COVID-19 survey, April 2021

What future measures do you expect your business to introduce or adapt to prevent similar risks in the future?% of total respondents

34

While consumers who make impulse purchases have been declining, those who buy groceries online keep on growing


15%

20%

25%

30%

35%

40%

45%

50%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Shar

e of

glo

bal r

espo

nden

tsReported Shopping Behavior, 2013-2022

I often make impulse purchases

I buy groceries online (at least monthly)

Source: Euromonitor International’s Voice of the Consumer: Lifestyles Survey, 2013-2022

35

Delivery in minutes can help to recreate impulse purchases


0 10 20 30 40 50

Difficulty rescheduling delivery

Worried about theft of package

Poor customer service

Receiving incorrect products

Unable to schedule a deliveryfor a convenient time

Damage to content orpackaging

Longer than estimated wait fordelivery

% digital consumers

Common Challenges in Delivery Services 2021

Source: Euromonitor International Voice of the Consumer: Digital Survey (March 2021)

36

As of December 2021, GoPuff operates almost 600 dark stores across the US and the UK, providing delivery of 4,000 different products to over 1,000 cities

© Euromonitor International Photo credit: GoPuff

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0 1 2 3 4 5 6 7 8 9 10

YoghurtConfectionery

Ice Cream and Frozen DessertsSavoury Snacks

Sweet Biscuits, Snack Bars and Fruit SnacksYoghurt

ConfectioneryIce Cream and Frozen Desserts

Savoury SnacksSweet Biscuits, Snack Bars and Fruit Snacks

YoghurtConfectionery

Ice Cream and Frozen DessertsSavoury Snacks

Sweet Biscuits, Snack Bars and Fruit SnacksYoghurt

ConfectioneryIce Cream and Frozen Desserts

Savoury SnacksSweet Biscuits, Snack Bars and Fruit Snacks

Aust

rala

siaW

este

rnEu

rope

Nor

th A

mer

ica

Asia

Pac

ific

Source: Euromonitor International Note: Middle East and Africa, Latin America and Eastern Europe are excluded from the chart as the average penetration of e-commerce snacks distribution is low (less than 3% per snack category).

Penetration of E-Commerce in Snacks in Selected Regions, 2021E-commerce % of total category sales

Dark stores may help frozen and refrigerated snacks to grow in e-commerce

EMBRACE DIGITALIZATION 38


Livestreaming and social commerce help recreate impulse purchases

EMBRACE DIGITALIZATION

Image source: https://www.facebook.com/brutshop/

Source: Euromonitor International Voice of the Consumer: Digital Survey (March 2021 and 2022)

0 10 20 30 40 50 60 70

China

US

World

Use of Livestreaming/Live Selling To Purchase Product/Service, % of Respondents

2021 2022

Image source: https://news.shopify.com/

0 10 20 30 40 50 60 70 80 90

China

US

World

Use of TikTok

2020 2021 2022

Source: Euromonitor International Voice of the Consumer: Digital Survey (March 2021 and 2022)

39


Consumers are increasingly entertaining at home, which is an opportunity for snacks

EMBRACE DIGITALIZATION

0

10

20

30

40

50

60

When I am on-the-go At home While watching TV/streaming video content

15-29 30-44 45-59 60+

Global Snacking Habits by Age Group, 2022% of respondents who selected

Source: Euromonitor International Voice of the Consumer: Lifestyles Survey fielded Feb-Mar 2022; n=38783

“I typically eat snacks…”

0

10

20

30

40

50

60

70

80

90

100

Watch television shows or movies (onTV, computer, smartphone, or other

device)

Play video games

15-29 30-44 45-59 60+

Global Frequency of Home Activities% of respondents who selected

Source: Euromonitor International Voice of the Consumer: Lifestyles Survey fielded Feb-Mar 2022 n:39832

“I do the following activity at home at least weekly…”

40



Image source: https://www.kitkatwinps5.com/

Image source: Respawn

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Image source: https://www.benjerry.comImage source: https://lvp.global/

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Conclusion


Opportunities and challenges for innovation

OPPORTUNITIES AND CHALLENGES FOR INNOVATION


•New textures and flavors•New formats and pack sizes•Value for money and privatelabel


•Functional Ingredients and special diets

•Sugar reduction•Plant-based snacks•Government regulations


•Quick commerce and darkstores

•Livestreaming and social commerce

•Hometainment

Context

Opportunities and Challenges

44


Rewards-based snacking or treating

Meal replacement snacking Distracted snacking


Motivations for Snacking

Thank you


Anne Scott Livingston, research [email protected]/in/anne-scott-livingston-5ba836128/

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Snackification - Sweets and Snacks Expo

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