Strategy

According to data from Mondelez and ingredients insights publisher FoodIngredientsFirst, 40% of surveyed shoppers have reported that they have been eating more snacks since the lockdown began. With away-from-home channels mostly dead for the time being, children spending much more time at home, and consumers actively seeking out products from their youths, many snack brands have seen a sudden surge in demand over the past few weeks.

Comfort has been another important quality in the snack boom. Traits like “indulgence” and “trust” have been particularly significant in consumer product selection, with two-thirds of shoppers buying more baked goods, popcorn, chips, and cheese. According to Jessica Vogl, global media manager at Mondelez, snacking can “relieve stress/bring ‘normalcy’ to our day,” as well as create a “sense of nostalgia.”

PepsiCo is investing in new direct-to-consumer e-commerce capabilities, in part to help meet demand for products under snack brands like Frito-Lay. According to Fast Company, “as…consumer habits signal what could be a permanent shift toward online shopping, PepsiCo wants in on the act.”

The company has launched two new sites: PantryShop.com and Snacks.com. PantryShop.com allows shoppers to order bundled packs with products from Quaker, Tropicana, Smartfood, etc. that all fit into a particular theme, including Everyday Pantry, Workout & Recovery, and Family Favorites. Snacks.com, meanwhile, is focused on individual servings from Frito-Lay brands like Tostitos, Doritos, and Stacy’s Pita Chips.

Selling directly to consumers cuts out several links in the supply chain, which means 1) better safety, 2) lower costs, and 3) less opportunity for market disruption. Launching these websites also allows PepsiCo to be less reliant on companies like Amazon and Instacart for online ordering, bringing e-commerce in-house. According to Gibu Thomas, PepsiCo’s head of e-commerce, positive consumer response to these new sites could influence the company’s retail strategy moving forward. Of course, a long-term expansion into e-commerce over physical retail will depend on whether or not shoppers continue buying groceries online after lockdown restrictions are lifted.

Many industry experts believe that they will. While the pandemic has led to a boom in online ordering, grocery e-commerce has seen pretty major growth year-over-year for the past several years. Supermarket News reports that the rate of consumers purchasing groceries online grew from 23.1% in 2018 to 36.8% in 2019, and then to a whopping 52% in 2020. While some shoppers will inevitably return to primarily shopping in-store, the fact that this is all part of a larger pattern of consumer behavior could indicate that a sizable amount of new growth could be sustainable.

If this happens, companies like PepsiCo that are focusing their e-commerce efforts on snacking could also drive sustained development of that trend as well. Not to mention the fact that shelf-stable snacks are cheaper and more reliable to ship than refrigerated items, meaning that shoppers who enjoy the convenience and safety of e-commerce could be incentivized to devote more of their digital carts to these types of products.

Many traditional rules of consumer behavior are changing when it comes to groceries, and snack brands have an opportunity to seize. By being available to meet growing demand – and by having clear, strategic plans in place to sustain this shopping boom – snack brands can win a permanent new share of the shopper’s pantry.