2018-State-Of-The-Snack-Food-Ind.Pdf
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How America Eats State of the Snack Food Industry Sally Lyons Wyatt EVP & Practice Leader March 28, 2018 Today’s Discussion 1 2 3 4 Macrosnack 2017 2018+ Snack Leveraging trends definition evolution trends growth drivers for success © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 2 © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 3 © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 4 For years our 1.9% snacking universe has had Core and 1.3% 1.3% 1.3% Extended categories – Core outpaced Extended -0.3% yet again Total Macro Core Extended Total Store F&B Snacks Snacking Snacking © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 5 Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg vs YAGO The evolution of Macrosnacking has resulted in 4 main segments Wellness Permissible True Treats Indulgence Indulgence © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 6 The category breaks are based on product roles and attributes Wellness Permissible True Treats Indulgence Indulgence Inherently Products consumers “Fully loaded” Confections healthier feel are more traditional categories &/or permissible because nutrition claims they have less of or added benefits to their indulgent favorites © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 7 The category breaks are based on product roles and attributes Wellness Permissible True Treats Indulgence Indulgence Snk and Granola Bars (GMO+ Claims) All Other Snk and Granola Bars ( w/o GMO+ Claims) © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 8 Wellness’ shortfall is due to a variety of reasons, but strong growth across the other segments within macrosnacks $ SHARE & % $ CHG Treat (+1.8%) True Indulgence (+1.9%) Permissible (+2.5) Wellness (-0.4%) © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 9 Source: IRI TSV_52 Weeks Ending 12/31/17 Today’s Discussion 1 2 3 4 Macrosnack 2017 2018+ Snack Leveraging trends definition evolution trends growth drivers for success © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 10 The top ten core snacks saw mixed results – with treating and indulgence scoring the most growth Chocolate Candy Cookies Potato Chips Ice Cream Non-Choc. 2.3% 1.8% 2.1% 0.6% 2.2% 0.0% 3.2% 1.8% 3.1% 1.2% Tortilla Chips Yogurt Crackers Natural Cheese Snack Nuts 2.5% 1.0% -1.7% -8.6% -0.3% -1.5% -1.3% -2.1% 0.7% -1.0% $ % Chg Unit % Chg © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 11 Source: IRI TSV_52 Weeks Ending 12/31/17 When we look at top category segments we see some categories where claims are driving massive growth while others decline Ice Cream Cookies Tortilla Chips Fat+High Protein+Organic Claims Energy+ Claims 100% Natural+ Claims 40% 17% 4% All Other All Other All Other -1.7% 1% 2% Crackers Yogurt Natural Cheese Other Grain+ Claims Fat+ Claims Fat+ Claims -1% -6% -11% All Other All Other All Other 0% 8% -1% © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 12 Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg Wide variety of needs being met when looking at raw dollar growth: satiety, treating, protein, transparency and accompaniment AO Other Salted Chocolate Ice Cream Non-Chocolate AO Cheese (Fat+Protein+Organic+ Claims) Cappuccino/ Snacks Snacks* Candy Candy (w/o Fat+ Claims) (w/o GF+Non GMO+Low Iced Coffee Fat+ Claims) (w/o Fat+ claims) AO Yogurt AO Potato Chips Fz. Pizza AO Fz. App & AO Dried Meat Rfg. App & (w/o Fat+ Claims) (100% Natural+ Claims) Snk Rolls Snk Rolls - Sushi (w/o High Fiber+Fat+ claims) Snacks (w/o Protein+Natural+ claims) (Without No Fat+ Claims) *Excludes nuts © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 13 Source: IRI TSV_52 Weeks Ending 12/31/17; raw $ growth Similar needs but different set of category segments when looking at 2017 vs 2016 ($ % Chg.) Refrigerated Ice Milk/Fz Snack/Granola Cheese Snacks Fz Cookies Meat/Cheese/ Dairy Desserts Bars (Fat+ Claims) (Fat+GF+Natural+ claims) (GMO+ claims) Cracker/Dessert Ice Cream AO Rfg. Dips Dry Fruit Snacks Cookies (Fat+Protein+Organic+ claims) (Fat+Natural+Calories/Serving+ (GF+Organic+Non GMO+ Claims) (Energy+ Claims) Appetizers/ claims) Snack Rolls (w/o Sushi) © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 14 Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg Top growth brands had increases 2 or more of the following levers Innovation Distribution Penetration Quality of merchandising +24% + .2 to 13.6 %HH Pen One point of Household penetration equates to 1.23 million U.S. households © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 15 Source: Select top growth products from $ % Chg and absolute growth change products – 52 Weeks ending 12-31-17 The growth brands gained the distribution predominantly in these channels Food Mass Drug Dollar Internet © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 16 Source: Based on Total Distribution point gain for select top growth products from $ % Chg and absolute growth change products – 52 Weeks ending 12-31-17 Today’s Discussion 3 2018+ Snack growth drivers 1 Lifestyle2 ingredients are winning3 4 Channel shake up Macrosnack Private2017 Label capturing2018+ attention Snack Leveraging trends definition evolution trends growth drivers for success For the fun of it Niche evolution Fragmenting flavors The next big category? Emerging trends impacting the industry © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 17 Today’s Discussion 3 2018+ Snack growth drivers 1 Lifestyle2 ingredients are winning3 4 Channel shake up Macrosnack Private2017 Label capturing2018+ attention Snack Leveraging trends definition evolution trends growth drivers for success For the fun of it Niche evolution Fragmenting flavors The next big category? Emerging trends impacting the industry © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 18 Average number of snacks per day continues to be above 2.5, and consumers top choices across the day vary... Fresh Veg. Fresh Fruit Salty Snacks Snack Nuts Salty Snacks Crackers Fresh Fruit Yogurt Energy Bar Bakery Salty Snacks Crackers Crackers Choco. Candy Cookies Snacks Dairy/Yogurt Dried Meat Based Bev. Snacks Choco. Candy Fresh Fruit © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 19 Source: IRI 2018 Snacking Survey ...with lifestyle being a main driver 75% 58% 57% 44% want snacks that want snacks that want all natural want snacks are guaranteed contain vitamins snacks or made made with fresh and minerals with natural whole grains ingredients +3 pts. vs. 2016 +1 pt. vs. 2016 +1 pt. vs. 2016 NC © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 20 Source: IRI 2018 Snacking Survey In Core Snacking, functional, allergy and diet claims were among the top increasers Omega DHA/ EPA Dairy Claims/Added Dairy - Non Dairy Gluten Free GMO - Non GMO Project Verified/ Vegan/Vegetarian No/ No Added/ Not Treated With GMO - Non GMO Project Verified/ No/ No Protein - High/Source/More Added/ Not Treated With Natural Sweetener Sugar - Unsweetened/Sweetened 2017 $ % Chg vs YAGO 2017 Absolute Growth vs 2016 © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 21 Source: IRI TSV_52 Weeks Ending 12/31/17 Functional claims were present on top growth categories over time and still growing, while dietary needs had largest year-over-year increases Dairy - Added Immune Defense Kosher Prebiotic/Probiotic Gluten Free Protein - High/Source/More Antibiotic - No/No Added/Not Treated Protein - High/Source/More With GMO - Non GMO Project 100% Natural Verified/No/No Added/Not Treated With 2017 absolute growth vs 2016 3-Year CAGR © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 22 Source: IRI TSV_52 Weeks Ending 12/31/17 Organic snacks grew 9% in 2017, and social sentiment was positive - Word clouds share numerous common themes across claims 57M earned social mentions © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 23 Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg vs YAGO Source: IRI Social Advantage – Calendar Year 2017; trended charts show extra data from Oct-2016 in IRI Weeks (Mon-Sun) Based on social activity, certified organic shares only a fraction of organic claim as a whole - consumers may assume that any organic claim must be officially certified 1.3M of earned social mentions +19% 3-year CAGR © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 24 Source: IRI TSV_52 Weeks Ending 12/31/17 Source: IRI Social Advantage – Calendar Year 2017; trended charts show extra data from Oct-2016 in IRI Weeks (Mon-Sun) We are seeing growth in current plant-based snacks and innovation to assist consumers with their lifestyle goals Root vegetable Probiotics, plant- Packed with 10 grams of filling, plant- cassava - combined based based protein from high quality with natural, simple adaptogens and ingredients, like soybeans and ingredients that are herbs - free from cassava - Soy Protein, Tapioca, Soy gluten-free, non- whey, dairy, grain, Fiber, cassava, Topical Seasoning, G.M.O. and paleo- gluten and soy Sunflower Oil friendly Contain at least 20 grams of Plant-based ingredients and nuts Pumpkin seed bars featuring 8 Made with pea protein, sunflower and contain no artificial flavors, grams of plant-based protein dairy-free protein per bar with oil, organic cane sugar and live active colors, or sweeteners. Contains - ingredients, such as quinoa, clover only 1 gram of sugar. cultures, the yogurt alternatives are 10g plant-based (pea and rice) honey, ginger and turmeric. vegan, lactose-free, nut-free, soy- protein, 8g fiber, 10% DV Iron free, gluten-free and G.M.O.-free Planted for success...Not just for Vegans © 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 25 Vegan snacks are driving significant growth with overall Vegan social sentiments total volume was 69M, were positive (90%), and trending upwards +36% Vegan Snacks © 2018 Information Resources Inc. (IRI). Confidential and Proprietary.