Consumers Pick Cheaper Merchants for Snacks, but Many Remain Brand Loyal


With consumers buying more snack foods of late, according to major brands, PYMNTS research reveals they are looking for cheaper ways to get their fix while sticking with their favorite brands.

Data from the latest edition of the Consumer Inflation Sentiment series, “Consumer Inflation Sentiment Report: Consumers Cut Back by Trading Down,” for which PYMNTS surveyed more than 2,000 U.S. consumers last month about their experiences and perceptions in shopping, reveals that many are looking for less expensive snack options.

Specifically, about 1 in 3 shoppers reported that they are buying snacks from merchants with lower prices, a greater share than said the same of any other food or beverage category in the grocery store.

Yet even as consumers report that they are seeking cheaper options, national brands maintain that their customers continue to be loyal, suggesting that, if these reports are accurate, shoppers are trading down on merchants but not as much on products.

“We continue to invest in our core categories of chocolate, biscuits and baked snacks. … All this continues to strengthen our already strong brand loyalty,” Mondelēz International CEO Dirk Van de Put told analysts on the snack giant’s most recent earnings call.

The company’s CFO Luca Zaramella added that, rather than consuming fewer snacks, grocery shoppers are instead seeking deals on the items that they would have purchased anyway, and rethinking pack sizes based on their budgets.

Similarly, The Kellogg Company noted in its latest earnings report that, in North America, the firm’s snacks business grew 15% year over year, and CEO Steven Cahillane said the company predicts that the snack category will “sustain its momentum.”

In the same vein, The Hershey Company has been maintaining that consumers continue to spend on snacks, even as they look for ways to rein in their spending overall.

“We know that many consumers have made changes to their spending to respond to inflation in the marketplace,” Hershey Company Vice President, Investor Relations Melissa Poole commented on the company’s latest earnings call. “We certainly continue to see that food has performed well compared to other categories, specifically food at home, …  and we also know snacks and candy continue to perform even better than broader food.”

Yet even as many consumers remain loyal to their favorite brands, a sizable share of grocery shoppers are shifting away from their former go-to brands to cheaper alternatives. Among major snack companies, it seems to be only PepsiCo that is reckoning with this reality, and even it downplayed the threat that lower-priced challengers pose to customer loyalty, per CEO Ramon Laguarta’s comments on the company’s most recent earnings call, maintaining that shoppers remain more or less loyal to PepsiCo’s brands.

“In general, we’re seeing private label growth in some of the categories where we participate,” Laguarta noted, “especially … in salty snacks. …  We see both private label increasing, although from a very low base in salty snacks, but most importantly for us, we’re seeing our brands continue to gain loyalty.”