State of the Snack Food Industry - IRI€¦ · Source: IRI 2018 Snacking Survey. 58%. 18-24. Snack 3+/Day. 37% 45-54. ... Leverage packaging as your billboard communicating ... Lags

Sally Lyons WyattEVP & Practice Leader

September 6, 2018

State of the Snack Food Industry

How America Eats

© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 2

Today’s Discussion

1 2 3

2017/18 trends

2018+ Snack growth drivers

Leveraging trendsfor success


2.2% 2.2%

3.8%

Snacking is still outpacing Total Store and F&B!!

Total Store F&B Snacks Aisle

Source: IRI TSV_ 52 Weeks_Ending 7/15/18; $ % Chg vs YAGO


Average number of snacks per day continues to be above 2.5, and younger consumers snack more frequently...

Source: IRI 2018 Snacking Survey

58%18-24

Snack 3+/Day

37%45-54

Snack 3+/Day


Driving over $40M in sales, these select snack categories are still part of the consumer’s snacking consideration set

Crackers

$7.4M

Trail Mix

$1.2M

Salty Snacks

$24M

Fz. Appetizers & Snack Rolls

Snack Nuts

$5.2M

$ % Chg Unit % ChgSource: IRI TSV_ 52 Weeks Ending 7/15/18

$2.3M


All growing dollars, but units impacted by other snacking options

Crackers

0.5% -0.3%

Trail Mix

3.2% 2.4%

Salty Snacks

5.1% 2.4%


6.2% 17.6%

Snack Nuts

0.5% -1.3%

$ % Chg Unit % ChgSource: IRI TSV_ 52 Weeks Ending 7/15/18

$7.4M $1.2M$24M $5.2M $2.3M


Other Salted Snacks has moved behind Tortilla Chips in dollar sales and…

Other Salted SnacksPotato Chips

Source: IRI TSV_ 52 Weeks Ending 7/15/18

Pork Rinds

Tortilla Chips Cheese Snacks

Corn SnacksPretzelsRTE Popcorn

$5.3M$7.6M $4.5M $2.3M

$1.2M$1.4M $1.2M $0.5M


…Driving strong dollar and unit growth

Other Salted SnacksPotato Chips

Source: IRI TSV_ 52 Weeks Ending 7/15/18

Pork Rinds

Tortilla Chips Cheese Snacks

Corn SnacksPretzelsRTE Popcorn

$5.3M$7.6M $4.5M $2.3M

$1.2M$1.4M $1.2M $0.5M

2.9% 1.3% 5.0% 3.4% 9.0% 5.8% 7.2% 2.4%

4.8% 2.4% 1.4% -0.6% 2.5% -2.7% 13.2% 8.2%



1 3

2017/18 trends


2


Channel shake upConsumers embracing variety

Lifestyle driveing snack choices


Snack Aisle channel sales have strong growth across all outlets except Drug

Grocery Mass C-Store Club

Online Drug Dollar

3.0% 5.4% 4.7% 3.4%

25.3% -1.1% 10.5%

All Other

13%

Source: IRI TSV_52 Weeks Ending 7-15-18; $ % Chg vs YAGO


36%

20% 19%

13%

5% 3%

GroceryX Mass Conv Club Other Drug Online Dollar

2% 2%

Mass, Online and Dollar are driving more dollar sales growth than their fair share

DOLLAR SHARE & SHARE OF GROWTH

22%SHARE OF GROWTH

22%SHARE OF GROWTH

18%SHARE OF GROWTH

9%SHARE OF GROWTH

12%SHARE OF GROWTH

-1%SHARE OF GROWTH

4%SHARE OF GROWTH

13%SHARE OF GROWTH

Source: IRI TSV_52 Weeks Ending 7/15/18


Looking at the latest year, eCommercecontinues to drive

double-digit growth across several

categories!

Salty Snacks

37%112%

Popcorn Snack Nuts

27%

13%

Snack/Granola Bars

Source: IRI Total Ecommerce-RMA; 52 Weeks Ending 07-15-18

Crackers

27%


25%

Other Snacks (includes Trail Mix)

24%


However, online does not have a “lock” on snacking growth.

In fact 39% of consumers don’t think to purchase snacks online

Online does not have a “lock” on snacking growth. In fact 39% of consumers don’t think to purchase

snacks online

22% 21% 16%

Too expensive Concerned about crushed

products

Concerned about the

products melting




1 3

2017/18 trends


2


Channel shake upConsumers embracing varietyLifestyle driving snack choices


One way is with the snack packs that deliver convenience with a variety of optionsRfg Meat/Cheese/Cracker/Dessert Snack +45%

Source: IRI 2018 Snacking Survey; IRI TSV_Week ending 12/31/17: NOTE: not all items listed are within the Rfg Meat/cheese/Cracker/Dessert Snack definition


Another is within IRI’s All Other Salted Snacks which provides a “home” for non-traditional snacks


Potato & WheatCorn & Potato

OnionCorn Crisps

Potato Crisps

Multigrain

Vegetable Crisps & Chips

Rice & Corn

Bean (incl. Black,Garbanzo,Lentil, etc.)

Chickpeas CauliflowerSeaweed

Peas

Another is within IRI’s All Other Salted Snacks which provides a “home” for non-traditional snacks


Emerging snack types address a consumer interest

50% Of consumers eat snacks that add

excitement to their daily diet+19 pts vs 2016



HOT & SPICY+12%

TERIYAKI+35%

BBQ+4%

CHILI/CHILE+9%SALSA+25%

SALT & VINEGARNEW+

BACON+25%BEEFNEW+

TTL CHEESE+17%

LIME$+95% ONION

+2%OTHER VEG+7%

GARLIC+3%

FRUIT BLEND+52%LEMON+34%COCONUT+47%

MAPLE+11ALMONDNEW+

NEW & GROWING = CRANBERRY, APPLE, BANANA, ORANGE

Within All Other Salted Snacks, flavor variety is capturing consumers

Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg vs YAGO

© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 20Source: 2018 IRI Snacking Survey

86%Of consumers seek snacks that are a good value for

the money

56%Of consumers eat snacks

that have convenient portion sizes +2 pts vs 2016


Variety is STILL King

Copyright © 2016 Information Resources, Inc. (IRI). Confidential and proprietary. 21Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg vs YAGO – w/I All Other Salted Snacks

12%$ % Chg vs YAGO

8%$ 3-year CAGR


BEANS

+25%

CHICKPEAS

+35%

ASSORTED/VARIETY

+7%

These type products are poised for more growth over the next few years

Source: IRI TSV_52 Weeks Ending 12/31/17; 3-Year CAGR



1 3

2017/18 trends


2


Channel shake upConsumers embracing variety

Lifestyle driving snack choices


Vegan snacks are driving significant growth with overall Vegan social sentiments total volume was 69M, were positive (90%), and trending upwards

+36%Vegan Snacks

Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg vs YAGO Source: IRI Social Advantage – Calendar Year 2017; trended charts show extra data from Oct-2016 in IRI Weeks (Mon-Sun)


Bars continue to attract and retain consumers delivering on many important ingredients and flavors

Nutritional/intrinsic health value bars +1.8% Breakfast/cereal/snack bars +0.9% All other snack/granola bars +22.6%

Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg vs YAGO


Probiotic craze driving 1% overall snacking growth, however huge growth in some category segments

40% Of consumers want snacks that have

‘probiotics’ to help with digestion

(+3pts vs. 2016)

Nutritional snack/trail mixes +48.6% Dried Fruit +120.5%Nutritional/intrinsic health value bars +53.1%

Source: IRI TSV_52 Weeks Ending 12/31/17; $ % Chg vs YAGO//2018 IRI Snacking Survey



1 2 3

2017/18 trends




Follow the trends for additional success

Continue to innovate for lifestyle changes across generations - Seasonal innovation &

assortment are key for additional growth

Channel strategies, unique positioning and assortments will win

Leverage packaging as your billboard communicating your differentiation and benefits

Learn from social media “voices” for innovation and messaging

© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 29© 2018 Information Resources Inc. (IRI).

Confidential and Proprietary. 29

THANK YOU! SALLY LYONS [email protected]

mailto:[email protected]

Susan ViamariVice President, Thought Leadership

August, 2018

STATE OF BAKERY

Trends and Opportunities


1 Performance

2 Trends & Opportunities

3 Winning Products

4 Private Label & National Brands

Today’s Topics


Bakery Dollar Sales Trends Lag Other Edibles Sectors

REFRIGERATED:$106B | +2.4%

FROZEN:$56B | +2.8%

CENTER STORE FOOD &BEVERAGE:$294B | +1.8%

FRESH DELI/MEAT/PRODUCE:$124B | +0.9%

FRESH BAKERY:$6.2B |-0.5%

TOTAL EDIBLE GROCERY:$640B | +1.8%

CENTER STORE BAKERY:$25B | +1.2%

Source: IRI Market Advantage, Multi-Outlet + Conv, 52 Weeks Ending June 17, 2018

COMBINED BAKERY:$32B | +0.9%


2.0%

2.7%

1.7%

1.1%

1.8%

3.3%3.5%

2.3%

0.9%

1.2%

2014 2015 2016 2017 52 WE

Food & BeverageBakery Aisle

The Bakery Aisle Was Relatively Strong in 2014 – 2016, But Growth Now Lags Total Food & Beverage

FOOD & BEVERAGE vs. BAKERY AISLEDollar Sales Trend

Source: IRI Market Advantage, Multi-Outlet + Conv, Data Ending June 17, 2018


Bakery Snacks$3.4B

+1.0% vs. YACAGR: 4.2%

BAKERY AISLE BY CATEGORY DOLLAR GROWTH L52 Dollar Sales, % Chg vs. YAGO & CAGR 2014-2017

Bagels and Pastry/Doughnut Sectors Are Experiencing Above-Average Growth; English Muffins Sector Lagging

Source: IRI Market Advantage, Multi-Outlet + Conv, Data Ending June 17, 2018

Pies & Cakes$2.0B

+1.9% vs. YACAGR: 6.1%

Fresh Bread & Rolls$13.4B

+0.6% vs. YACAGR: 0.5%

Pastry/ Doughnuts$5.1B

+2.3% vs. YACAGR: 4.8%

Bagels/Bialys$898M

+6.5% vs. YACAGR: 0.2%

English Muffins$723M

-1.5% vs. YACAGR: 1.3%

© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 6Source: https://khni.kerry.com/trends-and-insights/ten-key-health-and-

nutrition-trends-2018/

Several Trends Are Influencing Bakery Performance

https://khni.kerry.com/trends-and-insights/ten-key-health-and-nutrition-trends-2018/


This Is Impacting Performance Across Key Product Claims Across Aisles

$11.9B +9.8%$ Sales Chg. YA









$11.4B +29.1%$ Sales Chg. YA

EDIBLES - Dollar Sales & Chg vs. YA

Source: IRI TSV, Total US Multi-Outlet + Conv, 52 weeks ending Jun 17, 2018 vs. YA

https://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwj9sarX4vDXAhUItI8KHZrpDLoQjRwIBw&url=https://www.usda.gov/topics/organic&psig=AOvVaw20mVzWiOTo-JLhFpsQYDqT&ust=1512491133407260

http://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwijzemp__DXAhWH6Y8KHTcnAq4QjRwIBw&url=http://www.milhao.net/derivados-de-milho-sao-gluten-free-e-ricos-fibras-e-proteinas/?lang=en&psig=AOvVaw2pjK6kca9hMdbO1GpH5s5c&ust=1512498821904324

http://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwjK6bbV4PDXAhVEuY8KHWmnCTEQjRwIBw&url=http://www.sunrider.com/Eng/Products/Non-GMO&psig=AOvVaw0qOn7eGK0N3b50BkIZFbZU&ust=1512490592549222








$56.7M +16.4%$ Sales Chg. YA

$88.7M +6.9%$ Sales Chg. YA



BAKERY AISLE - Dollar Sales & Chg vs. YA

Source: IRI TSV, Total US Multi-Outlet + Conv, 52 weeks ending Jun 17, 2018 vs. YA

Including the Bakery Aisle

https://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwj9sarX4vDXAhUItI8KHZrpDLoQjRwIBw&url=https://www.usda.gov/topics/organic&psig=AOvVaw20mVzWiOTo-JLhFpsQYDqT&ust=1512491133407260

http://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwijzemp__DXAhWH6Y8KHTcnAq4QjRwIBw&url=http://www.milhao.net/derivados-de-milho-sao-gluten-free-e-ricos-fibras-e-proteinas/?lang=en&psig=AOvVaw2pjK6kca9hMdbO1GpH5s5c&ust=1512498821904324

http://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwjK6bbV4PDXAhVEuY8KHWmnCTEQjRwIBw&url=http://www.sunrider.com/Eng/Products/Non-GMO&psig=AOvVaw0qOn7eGK0N3b50BkIZFbZU&ust=1512490592549222


Millennials Are Critical to Future Success

13$240B

2022by


DemandingSavvySmartwellness fusionvalue value

They Are Shaping CPG Trends


Millennials Older BoomersYounger Boomers

Better by Nature Better by Science

Usa

ge

Convenient Forms

Traditional Forms

Multi-Surface

Multi-Surface

Bleach/ Ammonia

Ingredients

Bleach/ Ammonia

Ingredients

Paraben Free

Paraben Free

Millennial Attitudes Are Closely Linked to Specific Product Attributes


Millennials Will Pay More for

What Matters to

Them

Source: IRI Consumer Connect Survey, Q3 2017

OTC medications that treat multiple symptoms56%

HH cleaners made with environmentally friendly ingredients38%order online for home delivery23%anti-aging beauty care products20%environmentally-friendly packaging 20%

food & beverages that provide additional benefits46%


Top-Growing Products Demonstrate Alignment with Consumer Needs & Wants

Dave’s Killer BreadOrganic, Protein, Omega-3, Fiber, Whole Grains/Super Grains, Non-GMO

Sara Lee ArtesanoArtisan style breadNo HFCSNo Artificial Colors or Flavors

Kings HawaiianSweet, kid-friendly, snack/meal/dessert

Wonder Classic WhiteAn American Classic, iconic brand, appeals to sense of nostalgia

Josephs PitaHealthy, reduced carb, high protein, no cholesterol. Offer Multi-Grains, Flax, and Gluten Free.

Entemann’s Little BitesMade with Real fruit, No HFCS and No Artificial Colors, No Trans fats

Hostess Chocolate TwinkiesIndulgent iconic brand, on the go snack

Ball Park BunsLow Calorie, Zero Saturated Fat, Low Sodium, Low Sugar

A FEW BAKERY GROWTH LEADERS

Patti’s Good LifeFeatures Real Sweet FruitHeat & Serve

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiXjrye1L7VAhVIrlQKHfGaClYQjRwIBw&url=https://www.target.com/p/sara-lee-artesano-style-bread-20oz/-/A-39602274&psig=AFQjCNF5PZRWb-9_XcY-eNlyd51pjvVq2Q&ust=1501973141567000


2.1%

1.8%

-0.4%

-0.9%

2.0%

0.2%

0.6%

1.0%

CY 2015 CY 20016 CY 2017 L52

3.5%

2.6%

0.9%1.2%

3.7%

1.4%0.9%

1.4%

CY 2015 CY 20016 CY 2017 L52

BAKERY AISLE NATIONAL BRANDS vs. PRIVATE LABELDollar & Unit Sales Growth

Private Label Bakery Has Generally Outperformed National Brands During the Past Few Years

Dollar Sales ($B)

% C

hg

Unit Sales (B) Price Per Unit

Source: IRI TSV, Total US Multi-Outlet + Conv, CY 2014 – CY 2016, 52 weeks ending Jun 17, 2018 vs. PP

L52 $ SalesNB: $18.7BPL: $6.8B

L52 Unit SalesNB: 7.4BPL: 3.3B

L52 Price/UnitNB: $2.51PL: $2.09

National Brand Private Label

1.3%

0.8%

1.3%

2.0%

1.7%

1.1%

0.3% 0.4%

CY 2015 CY 20016 CY 2017 L52


BAKERY AISLE NATIONAL BRANDS vs. PRIVATE LABELDollar & Unit Share of Category

National Brands Have Majority Share In Most Bakery Sectors, But Private Label Is Gaining Traction

Dollar Share Unit Share

National Brand Private Label

+1.5 -2.1 -0.7 +0.5 -2.0 +2.5NB

Share Pt. Chg.

+1.5 -0.1 -0.4 +0.4 -2.1 +2.2

Source: IRI TSV, Total US Multi Outlet +Conv, 52 weeks ending Jun 17, 2018

83% 80%91%

76% 74%

31%

17% 20%9%

24% 26%

69%

Bag

els/

Bia

lys

Bak

ery

Snac

ks

Eng

lish

Muf

fins

Fres

h B

read

/Rol

ls

Pas

try/D

ough

nuts

Pie

s &

Cak

es

78% 79% 85%64%

78%

38%

22% 21% 15%36%

22%

62%

Bag

els/

Bia

lys

Bak

ery

Snac

ks

Eng

lish

Muf

fins

Fres

h B

read

/Rol

ls

Pas

try/D

ough

nuts

Pie

s &

Cak

es


National Brand Bakery Is Strongest in Grocery, Mass/Super and Convenience

1 FRESH BREAD & ROLLS FRESH BREAD & ROLLS PASTRY/DONUTS FRESH BREAD & ROLLS FRESH BREAD & ROLLS

2 PASTRY/DONUTS BAKERY SNACKS BAKERY SNACKS PASTRY/DONUTS PASTRY/DONUTS

3 BAKERY SNACKS PASTRY/DONUTS FRESH BREAD & ROLLS BAKERY SNACKS BAKERY SNACKS

4 ENGLISH MUFFINS PIES & CAKES PIES & CAKES ENGLISH MUFFINS BAGELS/BIALYS

5 BAGELS/BIALYS BAGELS/BIALYS BAGELS/BIALYS PIES & CAKES ENGLISH MUFFINS

6 PIES & CAKES ENGLISH MUFFINS ENGLISH MUFFINS BAGELS/BIALYS PIES & CAKES

NATIONAL BRANDS IN THE BAKERY AISLE BY CHANNELDollar Sales Chg vs. YAGO

Food Drug Convenience Club MassX/Super X

Source: IRI TSV, Multi-Outlet, 52 weeks ending Jun 17, 2018 vs. YAClub: ex. Costco, Mass ex. Walmart

Increase in Dollars vs. YAGO

Decrease in Dollars vs. YAGO


Private Label Is Showing Gains In Club; Pockets of Growth in Grocery and Convenience

1 FRESH BREAD & ROLLS PASTRY/DONUTS PASTRY/DONUTS PIES & CAKES FRESH BREAD & ROLLS

2 PIES & CAKES FRESH BREAD & ROLLS BAKERY SNACKS PASTRY/DONUTS PASTRY/DONUTS

3 PASTRY/DONUTS PIES & CAKES FRESH BREAD & ROLLS FRESH BREAD & ROLLS BAKERY SNACKS

4 BAKERY SNACKS BAKERY SNACKS PIES & CAKES BAKERY SNACKS PIES & CAKES

5 BAGELS/BIALYS BAGELS/BIALYS BAGELS/BIALYS BAGELS/BIALYS BAGELS/BIALYS

6 ENGLISH MUFFINS ENGLISH MUFFINS ENGLISH MUFFINS

PRIVATE LABEL IN THE BAKERY AISLE BY CHANNELDollar Sales Chg vs. YAGO

Food Drug Convenience Club MassX/Super X

Source: IRI TSV, Multi-Outlet, 52 weeks ending Jun 17, 2018 vs. YAClub: ex. Costco, Mass ex. Walmart

Increase in Dollars vs. YAGO

Decrease in Dollars vs. YAGO


• Be proactive, not reactive

• Tap into high-value attributes

• Build upon the interplay of national brand and private label solutions

• Understand evolving channel behavior

In Summary

© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 19© 2018 Information Resources Inc. (IRI).Confidential and Proprietary.

19

THANK YOU! SUSAN [email protected]

mailto:[email protected]

State of the Snack Food Industry - IRI€¦ · Source: IRI 2018 Snacking Survey. 58%. 18-24. Snack 3+/Day. 37% 45-54. ... Leverage packaging as your billboard communicating ... Lags

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