COVID-19 eating created a run on snack foods in 2020, and the trend isn't done yet
Whether it was cookies, chips, or ice cream, consumers set new eating standards during a year defined by COVID-19 — helping to revive some nostalgic snacking favorites in the process.
Approximately 41.8% of Americans are still working remotely during the pandemic, according to data from Upwork, which is expected to continue in 2021 and even beyond. The recent surge in new infections is forcing locked down citizens to grocery shop more than ever before as 2021 looms, coinciding with a boom in delivery app use.
The much discussed, stay-at-home trend has boosted packaged food legacy brands like Conagra (CAG), General Mills (GIS), Kellogg (K), and Kraft Heinz (KHC), according to CFRA analyst Arun Sundaram. And the trend is expected to sustain itself amid shifting consumer tastes and eating habits.
PepsiCo (PEP) CEO Ramon Laguarta talked about the trend on the company’s third-quarter earnings call, citing a substantial gain in snack staples like Doritos and Cheetos — noteworthy given the recent demand for healthy snacks and alternative foods.
In that vein, PepsiCo’s Quaker also had “strong double-digit net revenue growth” in lite snacks and side dishes like pasta and macaroni and cheese, Laguarta noted.
A snacking surge during a rough year
Locked-down and snack-happy consumers also gave a boost to Kellogg, the driving force behind Cheez-It and Pringles, which have seen an uptick in demand during the COVID-19 crisis.
It’s part of the pandemic surge that Kellogg CEO Steve Cahillane said helped drive “sequential and year over-year increases in household penetration and buy rates in key categories and countries” during the third quarter. In an interview with Yahoo Finance back in October, Cahillane also shared “people are still snacking... even more than they were in April, May and June.”
The Frito-Lay’s U.S. Snack Index underscores a trend that’s not likely to go away anytime soon. The survey showed that 66% of respondents plan to keep more snacks in their house than before COVID-19 — citing fears that their favorites will be sold out, and to limit their exposure to the virus by having to go out shopping.
The craving for snacks comes as consumers’ eating habits have adapted to the new normal. According to data from FMCG Gurus, a significant number of consumers skip at least one meal a day. But the data intelligence firm also noted that people are also seeking “taste and enjoyment” when they indulge, “driven by the need for comfort and escapism from the pressures of everyday life.”
The urge to snack also has a healthy dimension: In 2020, consumers sought out alternative trends with heightened attention to companies like Beyond Meat, Impossible Foods, and Oatly.
The nostalgia factor
And with more heightened attention on providing an “experience” for snack buyers, big name brands are getting creative — looking to reel in younger generations through nostalgia.
A pandemic-battered landscape saw PepsiCo launch Cheetos Popcorn, Kellogg and Wendy’s (WEN) collaborate to boost limited-edition Pringles Baconator, and Mondelēz International offer RITZ Cheese Crispers.
On December 1, Ben & Jerry’s released a new flavor to their successful Ben & Jerry’s Netflix Original Flavors (NFLX) lineup. Called Punch Line, it’s tied to the streaming giant’s major subscriber growth during the lockdown phase.
And in order to capture the attention of younger audiences, both General Mills’ Betty Crocker and PepsiCo’s Doritos are bringing back ‘90s favorites.
The former successfully brought back Dunkaroos, prompting the release of Dunkaroos Ready to Bake Sugar Cookie Dough and the launch of Dunkaroos cereal in 2021. Meanwhile, 16 new General Mills cereals are set to hit shelves this winter.
Separately, Doritos launched a new version of a ‘90s favorite this week, Doritos 3D Crunch, as part of their expanding hot-and-spicy food category. Alongside this launch, the company is encouraging fans to participate in the #Doritos3DChallenge on TikTok, which brands like Kraft-Heinz, Dunkin’, and Arby’s have also done in recent months.
Brooke DiPalma is a producer, booker and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma.
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