Recipe for Success -Whip Up Smart Snacking Category Management in 5 Easy Steps.



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Snacking Outside the Lines

Snacks were once boxed-in as an option to fight hunger between three meals a day or as the occasional sweet treat. But a more out-of-the box approach to snacking has gone mainstream. As many consumers shift away from the typical 9–5 job to a more on-the-go lifestyle, they turn to snacks as convenient meal replacements that aren’t scheduled at any point during the day.4

Consumers surveyed say they often replace a meal with snacks: 47% at breakfast and another 53% for lunch.5 From 2016 to 2018, the number of survey participants who typically skip or replace one meal a day with a snack has increased from 27% to 32%.5 The roles of consumers who routinely skip or replace two meals a day with snacks have increased from 4% to 9%.5


SMART COOKIES SHOULD KNOW Key Ingredients:
A Measured
Approach to Sales
step one full

STEP 2: Review Your Performance



Efficiency/Effectiveness

Assessing the overall efficiency and effectiveness of your operation can help you identify areas in need of improvement and create a better-informed sales strategy.

  • Study your layout, traffic flow, product offerings, business hours, product and category gaps.
  • Be cognizant of customer patterns during morning, noon and evening time periods and whether purchase behavior varies.
  • Consider whether you should open earlier in the morning or later at night, or if you should offer a different product mix.
  • Gauge purchase patterns not only by looking at sales numbers, but by interacting with customers.
  • Ask customers if there are any products they would like to see and if the hours are suitable for them.

The Competition

catManWp-step3DidYouKnow

Another great way to review your performance: compare it to the performance of the competition.

  • Consider an operations tour with your manager to observe similar stores to discover potential new best practices.
  • Review their layout, signage and product offerings.
  • Look at their bundle and value meal options to determine if certain offers or pairings resonate with consumers more than others.
  • Observe foot traffic and gauge if products similar to yours move quicker or slower because of their relation to associated products on the racks.
  • Bear in mind that a breakfast biscuit may perform better next to yogurt in one store, but sell more next to a coffee machine in another based on the clientele.

STEP 3.
Tailor Snack
Choices

Offer the top-selling snacks in each segment. Brands customers enjoy at home play a key role in the purchase decision—44% say their choice was influenced by their favorite brand.15

Weed out slow movers in favor of the #1-selling snacks they want. Don’t be afraid to reach out to manufacturers—they can give you information on products that do better during certain dayparts and those that skew toward certain demographics.

SWEET FACT -
Candy is among the top snacks purchased overall

STEP 4. 		Maximize Profitability

Having the right product, at the right time and in the right place, is critical to capturing more snack sales. Customers’ habits change throughout the day, so it’s important to rotate your product offering based on the daypart:

Location, Location, Location:

Where you sell is as important as when you sell. Help bag bigger sales with top-selling brands displayed in exactly the right place.

  • Use product merchandisers to pair products next to each other.
  • Place a rack near your coffee kiosk and yogurt cooler with snacks that pair well.
  • Use a stand-up basket rack or fruit stand rack next to your deli counter, beverage cooler or grill.
  • Place a gum rack at the register to capitalize on the last-minute impulse sales.

Additionally, keep all items forward-facing and restock throughout the day to ensure the display remains plentiful. If you see a product is not moving, make sure you replace it with a new product to try to increase impulse sales. Small additions and modifications will help you maximize the profitability of your operation.


STEP 5.
Merchandise
and Promote!

An operation is not guaranteed sales even if it has identified its consumer and stocked the perfect mix of products. Operators still must merchandise! Eye-catching displays, custom merchandising and promotions whet your customer’s appetite for the great brands you’re selling. They also let you highlight products with higher profit margins to generate more revenue. Below are a few merchandising tips to get your operation moving forward:

Brand Sections Create Stopping Power

While setting up your micro market, you will be faced with the question: “How do I lay out my product?” There are two main types of merchandising:

Horizontal brand blocking

The same type/brand of products displayed horizontally across a shelf. Usually utilized in bigger stores to maximize the number of top products sitting at eye level.

Vertical brand blocking

All of one type of product displayed vertically forces customers who naturally look at products at eye level and from the left to right to stop and focus on the variety of brands stacked vertically. Ideal for small-footprint stores that want customers to pay attention to overlooked brands on the top and bottom shelf.

brand Blocking

Hungry for Impulse Sales?

Try a Little Eye Candy

Displays are the first thing customers see walking into your store and the last thing they see before checking out. Displays are a great way to draw in a shopper’s attention. They can highlight a new product, show product pairings, or drive last-minute sales on small items such as gum. Always make sure your display is clear, and keep it organized and well stocked with products. Finally, don’t let the display get old—switch up the display type or products in the display to test what sells best and give consumers new options.

Feast Their Eyes on Digital Signage

Use digital signage to draw in customers and inform them about new products and promotions. You can easily change and update daily to promote special offers such as breakfast and lunch happy-hour specials or to display menu daypart updates.

Bundle Up to Help Sales Sizzle

Bundling up is not just for staying warm on a cold winter day. Offer a discount on paired items to increase check size. In the morning, offer fruit and a granola bar at a discounted price. At lunch, increase ticket size with a value meal bundle promotion: When customers buy a sandwich and chips, throw in a free drink. Or give them their choice of free dessert with purchase of drink and chips.

Consumers Eat Up “Free”

Don’t shy away from product sampling. Offering a free sample of a new or existing product increases the chance of a customer trying the product and being a lifelong purchaser. A study shows that “those who sampled an item were 11% more likely to purchase it again during the 20-week period that followed” the sampling event.23

Cross Merchandising Sweetens Snack Sales.

Use cross merchandising to help consumers quickly find related products. Make sure to pair related breakfast items next to each other—e.g., coffee a nd a breakfast biscuit or yogurt and fresh fruit. To do this, utilize snack racks next to a coffee machine or on top of a cooler to make sure the products are close to each other. At lunch, add chips under or over the cooler holding the fresh-made sandwiches and try adding fruit next to the pre-made salads.

Size Matters. So Do Flavors.

You could wind up eating a loss if you buy into a one-size-fits-all snack mentality. Rotate products to offer the best option for every daypart. No two customers are the same; some may prefer a larger snack of one flavor in the morning and a smaller snack of a different flavor in the afternoon. By offering a variety, consumers are likely to keep coming back.


Category Management: 5-Step Recipe for Success Recap

When it comes to wrapping up the sale, category management is key. Once you understand who your consumer is and what their purchase preferences are, you should constantly review your sales performance and tailor your products to their preferences. To maximize profitability, make it easy for customers to find the products they love by displaying their favorites in the right place at the right time. Finally, to raise consumer awareness it’s critical to merchandise and promote. By understanding and incorporating the 5 easy steps above, your operation can carve out a bigger slice of the pie in the multi-billion-dollar snack industry.


SOURCES:

1. The Hartman Group, Out of Home Snacking (Nov. 8, 2017), p. 11
2. Technomic, Consumer Hot Buttons (June 2018), p. 7
3. Mintel, Snacking Motivations and Attitudes—US (May 2017), p. 2
4. The Hartman Group, “Snacking: The Great Change Agent Disrupting Food Culture,” Forbes (May 16, 2017). Retrieved from https://www.forbes.com/sites/thehartmangroup/2017/05/16/snacking-the-great-change-agent-disrupting-food-culture/#75ceecfc3069
5. Technomic, Snacking Occasion Consumer Trend Report (2018), p. 49
6. Mintel, p. 3
7. Mintel, p. 7
8. Watrous, Monica, “Snacking innovation for the older generation,” Food Business News (May 30, 2018). Retrieved from https://www.foodbusinessnews.net/articles/11896-snacking-innovation-for-the-older-generation
9. Technomic, Consumers Fuel Industry Change (2018), p. 7
10. Restaurant Business, “Restaurants Shift Focus Back To Baby Boomers” (Jan 23, 2018). Retrieved from https://www.restaurantbusinessonline.com/consumer-trends/restaurants-shift-focus-back-baby-boomers
11. Technomic, Consumers Fuel Industry Change, p. 8
12. Datassential, FoodBytes: Millennials (Feb. 2018), p. 5
13. Technomic, Consumers Fuel Industry Change, p. 9
14. Datassential, p. 3
15. Technomic, The Gen Z Selfie (June 2016), p. 6
16. NPD Group, Guide to Gen Z (2017), p. 3
17. Technomic, Consumers Fuel Industry Change, p. 10
18. Valdez, Kevin, “Why Now is the Time for Restaurants to Court Gen Z,” QSR (Jan. 2018). Retrieved from https://www.qsrmagazine.com/outside-insights/why-now-time-restaurants-court-gen-z
19. Technomic, Snacking Occasion Consumer Trend Report, p. 89
20. Mintel, p. 9
21. Wyatt, Sally Lyons, State of the Snack Food Industry, iRi (Mar. 28, 2018), p. 19
22. Johnson, Nick, White Paper: Digital Signage vs. Printed Posters—All the Answers to Your In-Store Retail Questions, Digital Signage Connection (July 18, 2017). Retrieved from https://www.digitalsignageconnection.com/white-paper-digital-signage-vs-printed-posters-answers-store-retail-questions
23. Hein, Kenneth, “Sampling Inspires Repeat Purchases,” Adweek (Aug. 4, 2009). Retrieved from https://www.adweek.com/brand-marketing/sampling-inspires-repeat-purchases-99961/