When it Comes to Snacks, Premium is More Than Price
Snacking. It’s something the majority of us do. We look forward to the 11 o’clock hour in the morning to boost our energy levels mid-morning when 12 noon just feels too far away, and then again after lunch to stave off the 4 p.m. slump. For many years, chocolate, sweets, crisps and soft drinks were the traditional go-to-snacks for British consumers.
But in recent times, particularly the last five years, there’s been a dramatic shift in the snacking world that reflects wider social trends toward healthy living and shifting preferences around protein and sugar consumption. Consumers have more snack choice than ever these days, and it’s changing the way they think about snacking. Premium snacks are just one sub-category that’s emerged in recent years.
But what makes a brand premium? A common assumption is that price is the key differentiator for consumers, however, our recent global Premiumization Report found that cost is actually low on consumers’ perceptions of what makes a product premium. In fact, 40% of shoppers said they expect to pay a premium for healthy and functional snacks.
Another assumption is that brand name or quality and style of the packaging would be a key factor in decision making. While they place higher than price in consumers’ views, they aren’t the key differentiator.
The decisive factor is actually what should be the most obvious: the quality of the product, and whether it is made with high quality ingredients. Although in some ways obvious, these findings are emblematic of a change in consumer opinions about the food they eat.
Does it have the "Health" factor
Thanks to wider social trends toward healthier living and changing preferences toward sugar and protein consumption, shoppers are more conscious and informed about the ingredients in the products they buy. As a result of the higher importance placed on healthy eating, we are seeing a rise in organic products and “free from” alternatives in the market. Take for example the number of products with “free from” claims; our Nielsen Brandbank data shows that in 2017, it hit its peak with 22,960 products, up from 20,679 in 2016. Paired with the fact that almost a third of shoppers claim they buy free from due to personal taste rather than food intolerance, it’s therefore vital that health remains a key part of the snacking agenda in order for brands to find success in marketing to their consumers.
Where does this leave brands and private label
Snacking has traditionally been led by brands and is a heartland for multinationals operating in the core snacking categories around the store today. In part, the rate of innovation, depth of range and quality perception has kept the share gap between brands and private label.
However, we’ve seen a big push by private label into snacking. They are entering this part of the store with premium products, helping to drive the quality perception aside, and pick up a valuable portion of the snacking pie.
The snacking category is worth £18 billion today and is growing at 0.3% in value. Big brands set the benchmark and tone for the category. Snacking has a high level of innovation and the speed of reaction means that brands need to continue to invest in new product development to drive the category forward and to maintain their role at the fixture. Those who succeed will need to be honest, clear, and consistent with their brand communication and respond to consumer demand by prioritizing high-quality ingredients.
This article originally appeared on The Grocer.