Affordability remains vital consumer trend amid ongoing cost of living pressures
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Amid the ongoing cost of living crisis, price sensitivity for confectionery and treats is especially notable, as Emily Ann Smith, of the FMCG Gurus research group examines
The confectionery market offers consumers indulgence and moments of escapism from time to time, treats to decompress on weekdays, or to celebrate the weekend.
There’s always an opportunity for confectionery in day-to-day life. Consumers continue to hold a sense of self-expressionism when they shop, looking for products that align with them and their need-states. But what does this look like during a cost-of-living crisis?
The Cost-of-Living Crisis
The confectionery market will be vulnerable with consumers looking to reduce on spending in the next twelve months. With 58% of consumers stating they have looked to reduce their spending on snacks and non-essentials. Even before the current cost-of-living crisis, many consumers were struggling with everyday living costs and deemed grocery shopping to be an expensive task.
Further price increases are facilitating concerns, especially as many households claim they do not have sufficient household savings and live month-to-month, meaning any changes to the economy or prices will further impact such consumers. For this reason, consumers are engaging in recessionary style behaviours, and they are less brand loyal, shop around more, and scrutinise closely what constitutes good value for money. This makes the confectionery sector vulnerable to spending cuts, and industry players must develop resilience strategies to reduce price sensitivity.
Affordability is important, private label and economy offerings will appeal to consumers providing there are no concerns around quality being compromised. At the other end of the spectrum, at a time when people are reducing spending on big ticket items and in the foodservice channel, they will seek out small and premium indulgences to compensate, meaning there will still be a willingness to pay a premium for products that are of genuine quality.
Consumer attitudes and behaviours towards Confectionery
Consumers remain self-entitled when addressing their need-states, and for this reason indulgence is still a priority. Consumers will be reluctant to compromise on moments of indulgence over the next twelve months. The industry needs to respond to this by ensuring there is an adequate range of products to target budget-orientated occasions, and those where consumers are willing to trade-up because they have reduced spending in other areas. Two thirds of consumers stated affordability is important when purchasing confectionery. 49% of consumers said good quality products were important.
People will frequently turn to food for moments of escapism from daily stresses over the next twelve months. Consumers will engage in hi/low shopping occasions, where they look to save money on some items in order to spend more elsewhere, meaning that brands need to ensure that they have product portfolios to cater for budget and premium occasions.
Sustainability and Self-expression
Consumers practice self-expression and are selective with brands they feel mirror their attitudes and perceptions on life. Though this is nothing new, social media has accelerated this trend through social media over the last decade. This is something that is having a direct impact on purchasing habits, as consumers want brands to actively address social issues and demonstrate a willingness to boycott brands if they are not satisfied with their ethical and environmental credentials. Carbon footprint is a factor consumers are beginning to pay particular interest to, with 82% of consumers saying it is important for food and drink brands to publicise their carbon footprint.
A total of 27% of consumers say they have boycotted brands because of their ethical credentials in the last two years. The confectionery market should actively look to address ethical, environmental, and social issues via marketing. This is something that creates a stronger sense of brand identity, whilst giving products a more premium and adult-orientated image; especially as many consumers can often feel that advertising in product categories are outdated and stereotyped.
Key trends within confectionery
During times of uncertainty, consumers have a tendency to seek out products that remind them of simpler times of childhood and give them a sense of familiarity. For this reason, 40% of consumers claimed they sought out products and flavours that remind them of the past and simpler times. With such nostalgic offerings eliciting an emotional reaction from consumers, something which reduces price sensitivity. The confectionery industry can respond to this through re-launching discontinued products on a limited time basis, promoting trusted flavours that are associated with comfort and simplicity, using retro packaging designs, and using evocative marketing campaigns that remind them of the past.
Real and authentic flavours and ingredients are another area consumers are attentive to. Consumers have become more health orientated after the pandemic and there is a higher attentiveness toward ingredient lists and nutritional profiles. Post pandemic consumers have felt their energy levels have been impacted, this also applies to the current cost-of-living crisis which has led many feeling stressed and uncertain. So, there’s a higher demand for feeling active and energised, with consumers aiming to feel reinvigorated and focused. This is something that will drive demand for energy boosting claims within the confectionery sector, especially as people turn to products out-of-home to get them through the day.
It must be noted that consumers can be conscious about traditional energy boosting ingredients because of the link with side-effects, something that will drive demand for ingredient claims such as protein within the confectionery market and other ingredients associated with giving a natural and sustained energy boost.