Snacking trends intersect with some of the foodservice industry’s most important challenges, which is why cracking the snacking code has become a necessity. But while much attention has been made of consumer snacking trends, and while foodservice operators now roll out new snackable items almost daily, Packaged Facts estimates that usage of “snacks” at restaurants had held relatively stable during 2005-09, and we forecast similar results for 2010 and 2011.
But the devil is in the details. With their low price points, high portability, and upselling potential, snacking strategies can boost mid-morning and mid-afternoon sales; drive guest traffic; and leverage on-site upselling to higher-priced items or bundled meals. The bottom line is that snacking strategies can not only help operators address incremental “true snacking” occasions, but they can also use snackable items as carrots to entice customers to purchase more food and beverages—and give consumers highly portable food options in the bargain.
Snack and Dessert Trends in the U.S. Foodservice Market provides needed insight into the consumer snacking decision-making process; snacking menu pricing and product trends; and foodservice snacking sales (by restaurant segment and by demographic), helping industry participants position themselves accordingly.
With proprietary consumer research laying the foundation, the report analyses consumer attitudes and behaviors influencing foodservice snacking behavior. Themes addressed include where and how snacks are eaten, how the snacking purchase decision relates to consumer activity and routine, and consumer hunger and health purchase motivations. The report also assesses “consumer dessert influencers,” factors that play into the decision to order restaurant dessert during the dinner hour. Themes addressed include dessert formats and purchase incentives; and desserts as conditional options which assesses the influence of cost, satiation and calorie considerations on the purchase decision). As part of this analysis, we detail snacking usage according to restaurant type and to prepared foods use at convenience stores and grocery stores.
We also analyze the snacking patterns and restaurant preferences of five Snacking Lifestyle groups: Carefree Snackers; Fast Food Slighting Hurried Healthy Snackers; Hurried Healthy Snackers; Calorie-Conscious Small Mealers; and Healthy Calorie-Conscious Snackers. With this analysis, restaurants can tailor their incentives to fit the purchasing patterns of these important groups.
Snack and Dessert Trends in the U.S. Foodservice Market also analyzes leading snack-centric restaurant brands, including menu strategies and new menu item introductions; core users; snacking tendencies; food, diet and health attitudes; and trended sales metrics.
The report also includes “Share of stomach” snack and nonalcoholic beverage sales analysis, which includes 5-year sales trends for the fast food/quick-service restaurant and full-service restaurant segments, with forecasts for 2010 and 2011; guest traffic frequency analysis of leading snack-centric restaurant brands, giving a directional perspective on current sales trends; and trended snack and nonalcoholic beverage sales analysis by demographic, including 4-year sales historical sales trends and spending according to key demographics, such as age, income, region, and race/ethnicity.
Market Insights: A Selection From The Report
But affluent may help drive growth in discretionary spend
But the consumer burden is also relative, as those with higher incomes and more stable household balance sheets are naturally in a better position to spend money. This, too, can be illustrated by credit card trends.
According to the same Packaged Facts report, JPMorgan Chase’s Card Services division reports that creditcard spending volume trends are strongest among cardholders with $125K+ HH incomes:
During Q4 2009, spending volume among this group rose 4.8% compared to the year-prior quarter, whereas spend among those with $75K-$125K HH incomes rose 3.3%, and among those with <$75K+ HH incomes it rose only 0.8%.
Sales have also improved among cardholders carrying lower debt-to-income ratios, with Q4 2009 sales volume growth of 7.7% among cardholders with a debt-to-income ratio of less than 50%. Spend among cardholders with ratios of 50-200% dropped 1%, and they dropped 3.4% among those with ratios above 200%.
Following the general trend, limited-service restaurant snack and non-alcoholic beverage sales fared better during 2008 and 2009, as this channel benefited from consumers trading down from restaurants with higher price points. However, we forecast a 0.7% sales decline at limited-service restaurants in 2010, the result of extremely aggressive price discounting strategies that place guest traffic growth before guest check growth (a strategy in which snacks have played a role).
However, snack and non-alcoholic beverage sales to benefit from a modest industry rebound in 2011. We view snacks as well positioned to drive off-peak traffic and to give consumers more highly portable options.
Fast food owns the restaurant snacking space
When viewed according to restaurant spend, snack and nonalcoholic beverages are the domain of fast food, take-out, delivery, & concession—no surprise in light of these establishments’ success in serving customers quickly and in catering to walk-up business.In the News
New York, September 14, 2010 — Snack foods are becoming an integral part of strategies to strengthen consumer spending at restaurants, which increasingly rely on snacks to entice customers to purchase additional foods and beverages, according to Snack and Dessert Trends in the U.S. Foodservice Market by research publisher Packaged Facts.
“Snackable foods have caught on at a host of restaurant menus, from McDonald’s to Dairy Queen to Boston Market to The Cheesecake Factory,” says Don Montuori, publisher of Packaged Facts. “Snack foods are the means through which these and other foodservice players are boosting mid-morning and mid-afternoon sales and are driving guest traffic. Plus, snacks possess upselling potential to higher-priced items and can be incorporated into bundles.”
In this report, a snack is defined as a small portion of food, set in contrast against a (larger) regular meal. For example, as part of our proprietary consumer survey commissioned for this report, respondents were given the choice of telling Packaged Facts whether they had visited a restaurant to obtain breakfast, lunch, dinner or a snack. In addition to their smaller portion size, snack foods are also distinguished by their portability and low price. What constitutes a snack food by content, however, is highly subjective.
The snack-loving cohort of younger consumers appears to be particularly essential to sustaining—and perhaps even rescuing—the restaurant industry. Packaged Facts’ research indicates that consumers between 18-24 years old spend the highest percentage of their income on snacks and nonalcoholic beverages, followed by consumers between 25-34 and 35-44. These age brackets also allot the highest share of their restaurant expenses to snack products.
Snacks are popular with consumers of all ages not just because of cost, but also because of portability. According to Packaged Facts’ proprietary survey, 60% of respondents said they snack on the go while in a car. Individuals with $100K+ household incomes are most likely to snack on their way to planned activities, being 28% more likely than average to do so. Consumers between 18-24 years old—who typically have more erratic, fast-paced, on-the-go schedules and more planned social and extracurricular activities—are 27% more likely than average to do the same. This emphasizes the importance of providing consumers with handy snacks that are convenient to eat while traveling and conducive to multi-tasking.
Packaged Facts estimates that snack and non-alcoholic beverage sales reached $25.7 billion in 2009, and forecasts that sales will drop slightly to $25.4 billion in 2010, then reach $25.8 billion in 2011. Snack and Dessert Trends in the U.S. Foodservice Market provides insight into the consumer snacking decision-making process; snacking menu pricing and product trends; and foodservice snacking sales (by restaurant segment and by demographic), helping industry participants position themselves accordingly. The report also assesses “consumer dessert influencers,” factors that play into the decision to order restaurant dessert during the dinner hour. Additionally, the report analyzes the snacking patterns and restaurant preferences of five Snacking Lifestyle groups: Carefree Snackers; Fast Food Slighting Hurried Healthy Snackers; Hurried Healthy Snackers; Calorie-Conscious Small Mealers; and Healthy Calorie-Conscious Snackers.
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