Consumers Turn to Private Label Snacks as National-Brand Prices Rise

As national-brand prices continue to climb throughout 2024, many retailers are expanding their snack food assortments to offer consumers quality, lower-priced alternatives. This move comes in response to the growing demand for affordable options as shoppers become more price-conscious.

While price remains a primary concern, consumers are not solely focused on finding the cheapest option. Value, taste, and a willingness to explore new flavors are equally important factors. In fact, many shoppers are open to trying new snacks if they offer good value without compromising their wallets. As a result, retailers ranging from grocers to mass merchants and convenience stores are increasingly promoting their own-brand snacks, both salty and sweet.

Trends Driving the Snack Food Industry

To gain a clearer picture of what’s driving the snack food market, experts Melissa Myres, insights director at 84.51˚ (The Kroger Co.), and Sally Lyons Wyatt, EVP and chief advisor at Circana, weighed in on key trends.

According to Myres, 66% of consumers are extremely concerned about inflation, the highest level since March 2023. This concern is leading 64% of shoppers to actively seek out deals, sales, and coupons. Consumers are still snacking regularly but are turning to lower-cost, private-label brands more often to satisfy their cravings. They’re willing to “trade down” to more affordable options when snacking.

Wyatt added that nostalgic flavors have gained momentum, a trend that started in 2023 and continues into 2024. Alongside nostalgia, products like freeze-dried snacks and items containing caffeine are rising in popularity. Consumers are also seeking a balance between indulgence and better-for-you options.

Popular Snack Categories

When it comes to consumer preferences within the snack category, both experts noted a growing interest in meat snacks, trail mix, and potato chips. Candy, both chocolate and non-chocolate, remains a favorite, as do products like cookies, crackers, and yogurt. However, the diversity in snack choices continues to expand, with consumers now gravitating toward items like tortilla chips, frozen novelties, dried meat, and even frozen appetizers.

Pricing Impact on Consumer Decisions

Price is a significant factor in consumers’ snack-buying decisions. Snacks and candy are particularly affected by price increases, with 43% of consumers willing to switch to lower-cost brands to save money. Consumers still indulge in snacks during work-from-home sessions or while watching sports, but they are more conscious of the cost. Therefore, many are actively searching for products that offer better value and different options from their usual picks.

According to Wyatt, while prices remain about 30% higher than in 2019, the rate of price increases has slowed since late 2022. Consumers are finding more pricing flexibility in snack options, with some opting for larger pack sizes or multipacks to save money over time, while others choose single-serve sizes for more immediate convenience.

The Role of Health-Conscious Snacks

While health remains a concern for many shoppers, taste continues to be the top priority. Myres pointed out that although most consumers say they care about health when choosing snacks, 28% still don’t check ingredient lists. Taste remains the dominant factor in snack selection, with 75% of consumers saying it’s the most important consideration. However, 29% of shoppers are also looking for health benefits like high protein or low sugar, signaling that consumers are seeking a balance between indulgent and healthier options.

Wyatt added that the growing interest in protein-rich snacks is driven more by the need for energy rather than a focus on health. With consumers cutting back on caffeine, many are turning to protein-packed snacks to sustain energy throughout the day.

Demographic Differences in Snacking Habits

When it comes to generational differences, Myres noted that snacking frequency varies. While 75% of consumers aged 35-54 report snacking multiple times a day, only 56% of consumers aged 18-34 do the same. Wyatt emphasized the need for retailers to customize messaging based on generational preferences. The type of snack that appeals to Gen X may not resonate with Gen Z, so personalized marketing strategies are essential to reaching a wider audience and driving sales.

Conclusion

As national-brand prices rise, consumers are increasingly turning to private label snacks as affordable alternatives. Retailers are responding by expanding their own-brand snack assortments and providing value options without sacrificing quality. With price still being the primary consideration, consumers are also open to trying new flavors and healthier options, presenting opportunities for retailers to capitalize on diverse snacking preferences in 2024.