Snack Industry: Staying Customer-Focused while Navigating Headwinds During Uncertain Times
Tuesday, June 30th, 2020
Treats and snacks have always played a special role in bringing joy and comfort to consumers – now more than ever as the world struggles to cope with the COVID-19 pandemic. By Blas Maquivar, President, Global Emerging Markets, Mars Wrigley.
According to Nielsen, people in Southeast Asia rank enjoyment as their top reason for snacking, a sentiment shared by majority worldwide. While snacking has traditionally been perceived as an impulse category, it has since evolved into a lifestyle preference due to increased desire for convenience and healthy eating, and greater accessibility to a wide range of confectionery products.
The rise of snackification and healthier snacking
Snacks currently make up 40 percent of global food and beverage consumption and that number is still set to rise. In recent years, lifestyle changes such as longer working hours and fragmented mealtimes have blurred boundaries between eating occasions and increased demand for snacking options, establishing snacking as a meal occasion. Snackification is the growing phenomenon of replacing meals with snacks due to busy lifestyles, with 20-45 percent of consumers across markets – including Asia – who replace one meal with snacks.
Snackification has also reshaped the nutritional and competitive landscape in snacks. People are more conscious about the health impact of what they eat because of increased consumption frequency, with an approximate 10 percent increase in consumers from 2015 to 2019 who read food labels closely before eating. However, there are signs that consumers still want both indulgence and health, indicating that brands that meet both demands will thrive.
Impact of COVID-19: Shift to online purchasing, changing perceptions of food and continued rise in snacking
The COVID-19 pandemic has disrupted various sectors – the food industry included. Uncertainty, movement restrictions and closures of food service providers have led to a switch to online purchasing.
In Asia, we have seen an explosive growth in e-commerce and this will likely persist after restrictions are lifted. In a time where people need to or feel safer staying in, we should meet consumers where they are by focusing on routes-to-market that make products easily accessible from home. In South Korea, Mars has developed an exclusive product portfolio for Coupang, the leading and fastest-growing online retailer in the country. We have also doubled down on direct-to-consumer efforts through partnerships with food delivery services such as Foodpanda in Taiwan and Kareem in the United Arab Emirates.
More significant however is how people think about food as the pandemic progressed. We have seen an increase in snacking as consumers found snacks to be an anxiety reliever and a source of comfort during uncertain times. Being in lockdown has also created new moments and rituals of closeness as people find ways to connect and spend more time with their families. Treats and snacks provide consumers with an avenue to stay connected with their loved ones as they draw comfort through shared experiences of snacking and rituals like game or movie nights.
This presents an opportunity for food companies to help bring joy, familiarity and a sense of normalcy to consumers in an uncertain period. At Mars, we believe that we can make a positive impact by creating better moments through how we make and sell our products to bring smiles to our consumers and to help them enjoy our treats better. Knowing that many are spending more time at home, we created an online ‘M&M’s FUN Pack’ in Taiwan that contains printable games to bring cheer to our consumers. We are also exploring new ways to engage with consumers by creating better moments of comfort and connection with the help of technology. We also recently launched a digital campaign in Saudi Gulf called ‘Sawalif Ramadan’ – or ‘Stories of Ramadan’ – to foster conversations and bring loved ones together during the month of Ramadan.
The way forward: Safeguarding supply chains and adapting to changing consumer behaviour
As we move into the new normal, consumers are anticipated to pull back on spending because of financial uncertainty, but we forecast that treats – which are more affordable – will remain popular. We expect snackification and demand for healthier snacks to continue rising, given greater appreciation of fixed ‘rituals’ and in-home snacking occasions, as well as higher consciousness about immunity and proactiveness in personal health.
Therefore, it is crucial for the food industry to stay safe and ensure business continuity to continue providing reliable sources of food for consumers. Nestlé has introduced enhanced safety measures at all its sites, while AB InBev has announced a temporary extension on shelf life on certain packages and secured additional transportation and warehouse capacity to maintain smooth operations. Mondelez has been working with local governments and health authorities to keep their supply chains running during lockdown.
At Mars, we have donated $20 million to safeguard people and communities in our extended supply chains that have been most affected by the pandemic. This includes a $5 million donation to Care International to support our cocoa communities in West Africa. We have also worked with health authorities and governments in implementing protocols to prevent the spread of the virus, while ensuring the safety and quality of our products and services.
With the future remaining uncertain, food companies need to continue listening to consumers and the needs of their partners throughout their supply chain. And while we address immediate issues, we must stay alert for longer-term shifts in consumer behaviour resulting from the pandemic. This means staying agile and quickly tailoring product offerings to meet change in demands, as well as in adapting to new consumer habits. But most of all, it means having a clear direction and growing our business in a way that positively impacts our people and the planet.
Check these articles out:
SHARE WITH FRIENDS: