COVID-19 Updates

SugarCreek: Brandworthy Food Solutions

Is There Value in Packaging that Targets Specific Snackers?

Posted by SugarCreek

Jan 1, 2015 2:30:00 PM

woman-looking-at-package-in-grocery-storeThey're a small, but growing portion of the snacker market, the purposeful snackers. You might call them the "ethical" snackers. They're the people who prefer, says Nielsen, specialty foods with sustainably-sourced, fair trade and/or organic ingredients. And they are quite the segment.

The question is whether food packaging design can help retailers capture additional share from this hot food trend. We believe that it can. Retailers should be doing everything possible to capture the attention of the purposeful snacker segment. Here's why.

Specialty foods were recession busters.

It may seem counter-intuitive, but even as US fortunes shrank between 2008 and 2009, specialty food retailers did just fine. Presenting at New York's Fancy Foods Show, Mintel International's consulting director, David Lockwood, painted a rosy outlook for the specialty foods market.

"Specialty food thrived throughout the recession," he said, "and as the economy stabilizes, the industry will expand by conquering new channels, redefining upscale and redefining 'better for you at a price you can afford.'"

Robust flavor. Robust growth.

According to Food Navigator-USA's Elaine Watson, the specialty snack market represents an $88.3 billion value in the United States alone, and that's not counting the high-end snack markets in Europe and Asia. Stateside, the specialty foods sector outpaced the overall food and beverage industry's growth three times over between 2011 and 2013.

Whereas the overall food and beverage market grew by 5.2 percent over that time period, niche and specialty foods sales grew 15.9 percent. Specialty food sales represented over 10 percent of the US food and beverage industry's total sales in 2013, and that has food service companies and food entrepreneurs salivating.

Can packaging target consumers' motivations?

In short, yes. And one of the most important segments to target may be Millennials.

According to Lockwood, "Millennials are starting to talk about some specialty stores in the same way they talk about restaurants." In other words, they are buying into the brand image of some specialty stores, and allowing  branding to guide their choices.

Food packaging making claims of "local" ingredient sourcing, "all-natural" ingredients and "organic"— all important to the 18-35 demographic— account for an increasingly sizeable portion of sales. In 2013, "all-natural" foods comprised 41 percent of sales; indeed, natural foods are one of the hottest food trends in the market now.

Foods that contain all-natural ingredients should be touting it on their packaging— prominently— and that packaging should be designed to speak to the Millennial segment that is so enamored with them. Green-friendly packaging, for example, is a strong motivator for environmentally conscious Millennial consumers, as is the trend toward minimalism in packaging.

What will the next few years look like for the industry?

Projecting out three years, said Watson, many industry insiders and retailers are predicting strong growth in non-GMO, ecologically sustainable and fair trade foods. Indeed, reported Nielsen, 47 percent of individuals in the purposeful snacker segment reported they would pay extra for fair trade foods.

Trendwise, designing healthier foods is at the forefront of food producers' minds. Gluten-free seems to be driving a lot of current research and development spends, according to Watson.

That means that purposeful snackers seem to be firmly in the driver's seat. Though there is a market for non-healthy, legacy snacks, the fact remains that consumers' preferences are shifting firmly and quickly toward the healthier, more conscientious end of the purchase spectrum.

A word of caution.

All that said, Nielsen indicated that the purposeful snacker segment is brand and price conscious.

Over half (51 percent) of purposeful snackers prefer branded snacks. Over a third (37 percent) will only purchase snacks when they on sale. Food marketers should take note of this and think about building regular "sales" into their pricing structures.

And while there's no doubt that the entry of more specialty food stores represents a hot new wave in the market, companies should be careful not to overextend in what may end up being a bubble market.

"Mainstream supermarkets still account for around two thirds of specialty food sales but their share is slipping," said Lockwood. "It's kind of become cool to be a specialty food retailer."

Unfortunately, many of those entrants are unlikely to survive long-term. As Lockwood noted, financial analysts who focus on the food industry have lamented, "the number of people trying to get into the business who have no idea what they are doing."

The key, then, is for food entrepreneurs to grab consumers' attention now with good market research and solid food packaging design, but then to maintain their market research efforts and remain flexible enough to change with consumers' preferences over time.


Click Here to Learn About  Our Packaging Capabilities


Written by: SugarCreek

Sugar Creek prides itself on its authentic culinary expertise. With nearly 50 years in the food manufacturing business, we know what Americans want to eat.

Topics: Sustainability