Let’s face it: America has a sweet tooth. In times of great distress, consumers are quick to find comfort in delicious snacks and desserts. In fact, these types of products were showing strong growth over the past year, as evident from the 3.3 percent increase in sales last year for the pastry and doughnuts category. However, that was before the COVID-19 pandemic started affecting the industry, so what is the market like now?
COVID-19: A Catalyst of Uncertainty
When the COVID-19 pandemic initially affected consumer habits, it was difficult to predict what the impact would be. Were people going to panic buy food in bulk, sweeping out store shelves? Perhaps people would avoid physical stores all together, turning to e-commerce options. Were they even going to have enough income to indulge in treats after the surge in unemployment? Well, maybe the stimulus checks would lead people to buy impulsively rather than save their money. Clearly, this was a time of great uncertainty for the snack and dessert industry, because the possibilities were endless.
As of writing this article, it has almost been 6 whole months since the WHO officially declared COVID-19 as a global pandemic. Now, consumers and businesses alike have begun to get used to this new environment, and they have found ways to adapt. As a result, the industry has started to become more stable, and experts have gotten a better idea of where consumer demand is headed. So, the next question is obvious: what exactly does the future hold in store for this industry?
Single-Serve Snacks: A Proven Staple in the Consumer Lifestyle
Based on recent reports, the good news is that the single-serve snack industry is showing signs of recovery. Even though the pandemic did reduce sales numbers at first, this crisis brought about a new form of stress upon everyday consumers, and when people get stressed, comfort food becomes an extremely tempting solution for most people. Professionals like Andrew P. Callahan, president and chief executive officer of Hostess Brands, Inc., can attest to this too, as he claimed that his business saw sales “bounce back right away” once people were able to start working again.
“Our c-store channel which is not a 100% but the majority of our single-serve business has seen steady and consistent improvement since I would say the middle of April,” he said. “We see consumers coming back. We see take away coming back, and we also see our distributors who had pulled back purchases to preserve cash in the short term, filling back inventories and consumption growing.”
What Food Producers Should Keep in Mind
Even though the industry is starting to stabilize again, that does not change the fact that the COVID-19 pandemic has created a new environment where businesses need to adapt. The typical consumer mindset has begun to shift, and there are two key things that businesses need to keep in mind as they start to resume operations again:
- Packaging needs to appear sanitary
People are now getting more comfortable with re-emerging from their homes, leading to more frequent shopping trips again. Even so, COVID-19 cases are still occurring every day, and people are continuing to be cautious as a result. This new mindset of emphasizing safety has impacted the way people shop; more specifically, it has affected the way consumers perceive the value of packaging.
Even though there is no evidence that eating contaminated food can lead to contracting COVID-19, this pandemic has led to a heightened value in health safety in all forms, including food safety. “The pandemic has impacted the importance of offering products that are prepackaged and individually wrapped,” said Yianny Caparos, president of The Bakery Cos. “Packaging needs to be sealed, so when the consumer buys it, they know no one’s touched it since the operation.” Therefore, food producers should make a conscious effort to utilize packaging that looks as sanitary as possible, so consumers won’t have second thoughts on whether it’s safe to purchase their product. “Gone may be the days of grab-and-go bins, open clamshell displays and hotel lobby continental breakfasts,” says Joanie Spencer, editor of Baking & Snack magazine.
- Products need to be healthier
Even before the pandemic started, consumers were starting to prefer foods which were perceived as “healthier”, such as products which were gluten-free, sugar-free, or free from artificial preservatives. These kinds of products were especially getting popular with younger generations, such as Gen Zens and millennials, who viewed these products as less harmful. “People have become much more educated on ingredients and the variety of ingredients that go into a product,” Mr. Caparos said. “What they want is the confidence of what a clean label represents.”
This may sound like bad news for the dessert and indulgent snack producers, but there seems to still be some hope for that industry. According to Bill Hanes, vice president of marketing and strategy for LeSaffre, consumers still desire “permissible indulgence”. “Despite a growing understanding of nutrition and an increased focus on health and well-being, consumers still crave the foods they believe they shouldn’t have.” Even if a product is typically perceived as an unhealthy treat, adding some “better-for-you” components such as extra nutrients can add a “permissible appeal”, Hanes claims. As long as food producers can innovate their products to have a clean and healthier label without sacrificing taste or quality, they can continue to serve as an escape during stressful times like the pandemic.
Overall, even though the COVID-19 pandemic caused the food production industry to become unstable at first, now it seems that consumers are back to indulging in comfort food again. However, in order to adapt and thrive to this new environment, food producers must make an effort to redesign their packaging and innovate their products. By making their packaging more sanitary and making their food perceived as healthier, even dessert and single-serve snack producers can stay on top of these new trends.