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The snacking industry really comes into its own as the weather heats up and dark rainy days turn into long sunny adventures. Indeed, the on-the-go opportunity becomes more important than ever as shoppers forgo holidays for staycations and days out in the face of rising inflation.
Read on to find out how to offer quality and value with budgets being squeezed, and why customers continue to indulge in ‘little luxuries’.
The cost-of-living effect
With food inflation continuing to rise as we approach the summer, both producers and consumers have been hit hard. In particular, crisps were affected by sunflower oil shortages and spiralling costs as a result of the war in Ukraine.
As Robert Strathern, co-founder of Fairfields, explains, “Production costs have increased for the business, which saw oil prices soar rapidly by as much as 72% last year and direct costs of growing potatoes up 32%, partnered with rising energy costs that were partially mitigated by on-site generation.
“As for why shoppers have been undeterred by price rises in crisps, well, we also know that crisps are the nation’s favourite snack by a significant margin. Our own research last year indicated that over 80% of us eat crisps each month.
“It’s my guess that in this cost-of-living crisis, the ability to have your very favourite treat is just one of those things that keeps spirits up, even if your overall ‘treat spend’ is down.” This is the idea of the ‘lipstick effect’, where in times of financial crisis consumers choose to keep their ‘little luxuries’.
“You might choose to sacrifice other, less favoured treats like popcorn – or big-ticket items like holidays and cars – but potato crisps are your number one and so remain on the shopping list”, Robert adds.
Indeed, Sean Mason, co-founder of Two Farmers, has noticed that shoppers are continuing to purchase their favourite snacks despite price rises. “Research has shown that despite the cost-of-living crisis influencing a trend of trading down to own-label grocery items in other categories, shoppers have remained loyal to their preferred brand of crisps, and this is not expected to change.
“This is great news considering the pressure that rising costs of production, including that of sunflower oil, have put on producers like us. Other snacks, such as nuts, in particular, have seen sales fall in comparison.”
Quality is king
With customers choosing to keep their little luxuries such as crisps, it is no surprise that quality is king when it comes to consumer demand.
This is something Simon Jones, co-owner of Forest Deli, is well aware of, as he tells Speciality Food, “For the ranges of crisps and snacks I feel one of the key choices is to be selling different ranges than the more widely available ones, especially as supermarkets will always undercut the independents on price. Quality is the deciding factor, as it is for all ranges.
“We carry a few different ranges to cover as many customer requirements balanced with some luxury treats as well as bags of crisps for a picnic.”
Of course, customers are looking for value with their purchases, and independents are well-placed to offer this. “Unlike many other hand cooked brands, we deliberately choose not to sell in supermarkets because it gives our independent customers a unique selling proposition and adds the sense of ‘specialness’ that fine food retail customers are looking for, with the quality to match – hand cooked potato crisps, made with the potatoes we grow ourselves, at our independent family farm”, Robert explains.
“Quality comes from the ingredients, from the short and sustainably led supply chain and credentials that mean no one will be disappointed; our crisps are all vegan and gluten-free so there’s something for everyone.”
Indeed, despite financial challenges, consumers are still interested in sustainability, and indies can communicate this effectively. “We believe it is all about demonstrating our credentials in a meaningful way to customers”, Sean explains. “There’s a large range of crisps available in the premium market, however, only Two Farmers offers both artisan hand-cooked crisps and a plastic-free, home-compostable packaging solution.”
However, Robert also notes that value doesn’t have to mean cheap. “In fact, when it comes to quality goods, it shouldn’t mean cheap. Value is a fair reflection of the effort and costs that go into producing, merchandising and selling a product. Quality also comes from the shopping experience itself.
“Innovative, co-branded displays are one way to add shopper intrigue. Lots of our most successful customers will have coronation fixtures, for example, and will beautifully display all the products needed for a great celebration – which, of course, must include crisps!”
Sean also encourages fine food retailers to create engaging displays to convey quality. “Some of our retail customers also display some of the ingredients we use, such as Droitwich salt, alongside our crisps to show that we use the same high-quality ingredients they are selling in their shops”, he tells Speciality Food.
The warmer weather always brings more opportunities for on-the-go upselling in addition to sharing formats and outdoor snacking.
“As we head into the warmer months, they’ll be a rise in outdoor snacking thanks to barbecues and picnics, and our 150g sharing bags and 500g sharing tins are perfect for these occasions. Convenience will be key, as crisps remain the ultimate grab-and-go snack”, Sean explains.
But Robert believes that this summer will be particularly significant for snack sales. “We’re seeing a real increase in sales of our 150g sharing format as we head into late spring. It’s not just that summer is nearly here – it’s also that it feels like one of the first truly unrestricted summers we have had since 2019.
“There is a real mood that, despite any cost-of-living concerns, we want to get together with friends and family and enjoy the company of other people. They’re buying the kinds of crisps that they can pop in a bowl in the middle of the table and have everyone dig in.”
With more and more people taking food outside the home to enjoy in nature, Sean warns that independent retailers have a key opportunity to offer more eco-friendly snacking. “During the summer, plastic waste increases by around 40%, so consumers may look to be more sustainable and choose planet-friendly alternatives.
“Businesses should encourage consumers to take their waste home with them, or at least find a bin, should they be out enjoying our glorious country this summer.”
There is plenty of scope for fine food retailers to cash in on the snacking opportunity that summer brings, so focus on quality and sustainability to keep customers coming back for their ‘little luxuries’.