Cynthia Baker works out with a trainer three days a week and tries to eat healthy—mostly proteins and salads—at every meal. But at about 3 p.m. each weekday, she breaks open a personal-size package of cookies.

“When I’m working, I’m busy, and in the afternoon, a small treat helps get me through the day,” said Baker, the U.S. communications manager for an international organization. “It’s a great little reward after you’ve accomplished a project or checked something off the to-do list.”

Health, wellness and avoiding sugar are big issues for today’s consumers. In fact, 71% of consumers say they’re trying to reduce or avoid sugar completely, according to The NDP Group, a market research organization. But health today is much more than just diets and exercise, according to David Portalatin, vice president and food industry advisor at NPD.

“Consumers want to live well, and part of living well is enjoying some of your favorite foods and beverages,” said Portalatin. “Consumers are carving out permissible opportunities for themselves to create a little balance and a little indulgence.”

What Consumers Want

Although packaged sweet snacks are a small percentage of the average c-store’s bottom line (1.57% of in-store sales in 2018), the category contributes to the morning snacking daypart and generates high margins for retailers. Snack cakes, pastries and desserts made up most of the category's sales in 2018 (48.5%), followed by muffins/donuts (36.7%) and cookies (14.8%).

“Packaged snacks tend to be a great offer for customers who are on the move and will eat while performing some other activity,” said Jayme Gough, NACS analyst. “The total category brought in an average of $32,501 sales per store in 2018, a decrease year-over-year, in part due to consumers opting for alternatives to sweet, sugary snacks.”

Unlike the mindless consumption of chips while watching TV, today’s snacking occasions have a purpose. People may eat snack foods as part of a main meal or to replace a traditional meal, said Portalatin.

Selling packaged sweet snacks relies on offering variety by daypart.

“What’s driving this is three things: portability, permissibility and beneficial attributes,” he said. “Portability is increasingly important to consumers who are much more fluid today. They may be looking for foods that provide energy throughout the day or foods that add protein to their diet.

“Permissibility is part of the effort to help consumers create balance, to create occasions that satisfy the need for a treat or reward,” said Portalatin. “We do certain things during the day, such as our workout, and we deserve to have a little bit of a break to create that balance. Beneficial attributes may include being a clean-label product, such as a cookie made from only flour, sugar, butter and eggs. It still may have a lot of calories. But it’s a wholesome, natural cookie like grandma made. What can be bad about that?”

He urges retailers to publicize those three drivers through their own store communications efforts. “Remind customers that they’re allowed to have a treat,” he added. “They’ve earned it.”

Promoting Packaged Pastries

C-store retailers have plenty of options when it comes to selecting packaged sweet snacks. But selling them relies on offering variety by daypart, ensuring that the products are fresh and merchandising well, said Jeff Blalock, vice president of sales for Georgia-based Flowers Bakeries Group.

“Danish, donuts, muffins and honey buns should be available for morning shoppers, and items such as cupcakes, Swiss rolls and pecan twirls for other dayparts,” he said. “Shoppers will buy some of these products at other times of the day, but a traditional approach gets the best results.”

Consumers love to indulge, and the convenience store channel is a good fit for that behavior.

Blalock feels that consumers respond best to promotions that bundle multiple price points, such as offering a lower price for purchasing two pastry items or buying coffee or a fountain drink at regular price and receiving a discounted pastry. “This is a high-impulse category, so locating product in multiple points within the store is the best way to grow sales incrementally,” he said. “Coffee counters, checkout counters and even shipper displays serve as points of interruption for shoppers, beyond the shelf. It also helps to keep signage fresh and easy to read.”

Rutter’s, the Pennsylvania-based chain with 73 locations, showcases packaged sweet snacks in several areas—in the bakery case, on perimeter displays, near queue lines, in counter and coffee station baskets and on cooler clings. “We maximize a variety of locations in our stores by featuring items from all different impulse categories,” said Joseph Bortner, category manager, Rutter’s. “We’ve found that twofer offers help us sell packaged sweet snacks. Pastry and sweet goods is a growing segment in our stores,” he said.

The Madison, Florida-based Busy Bee convenience chain merchandises packaged sweets in the food aisles and on coffee station endcaps.“We help guide guests toward the idea that adding a sweet treat to their coffee is just what they’re missing,” said Megan Forcey, director of advertising and e-commerce, Busy Bee. “I think properly placed impulse items located throughout the store will always do well.”

Busy Bee offers seasonal snack bundles. During winter months, the stores will combine a honey bun with coffee for a special price. “In the months we don’t have a seasonal special, we’ll often run a monthly deal featuring a select item such as a buy-one-get-one-free,” she said.

“I feel that this category has a sense of nostalgia around it,” Forcey said of packaged snacks. “Packages of mini-donuts are classics that I remember getting during family road trips as a child. Now as an adult I may not get these every day, but during a vacation, I may splurge on mini-donuts because of the memories they bring back. I think many guests feel the same way about items like honey buns or Zebra Cakes.”

“Every store can be unique relative to space and size,” said Scott Ward, vice president of sales, small format, Hostess Brands. “Our top merchandising tool is the front endcap. Our products are delivered in impactful and shelf-ready caddies, with minimal counts ranging between six and 10 units per caddie. This process has been effective for our warehouse distribution model.

Remind customers that they’re allowed to have a treat. They’ve earned it.

“We work with our partners to create the most effective and productive merchandising and promotional programs that not only drive incrementality for the promotional period but serve to reinforce our category leading brand ranking,” he said. “Consumers love to indulge, and the convenience store channel is a good fit for that behavior.”

Private Label

Because packaged snacks are a priority for Yesway, the Des Moines, Iowa-based chain launched its own private-label bakery products in 2018. Customers can choose from chocolate or powdered donuts, chocolate or apple pies, blueberry or banana muffins, cheese Danish “and of course, honey buns, which have strong demand,” said Derek Gaskins, senior vice president of merchandising and procurement, Yesway.

The chain offers some low-sugar and gluten-free offerings for shoppers with dietary restrictions, but “our customers are seeking an indulgent treat or snack in the bakery category,” he said. “I won’t rule out [including] better-for-you products in the category, but that has to be a secondary benefit that is superseded by great taste.”

Yesway places a four-sided rack stocked with private-label items in each store. “It helps drive impulse and gets our products noticed upon launch,” Gaskins said. “Products are also merchandised in the regular set and placed in other locations, like the coffee bar and dispensed beverage areas.”

Yesway has had good luck with simplified pricing and twofer pricing that drives trial and unit velocity. “The response has been tremendous,” Gaskins added. “Our products compete well with national and regional brands and deliver compelling value to our customers.”

Whether offering national, regional or private-label snacks, “consumers want great-tasting products—period,” said Blalock. “They also crave the new and different, and we’re constantly innovating to deliver exciting flavors and products. One example is our newly launched Tastykake Scoop Shop, a pastry subcategory inspired by popular ice cream flavors.”

In the future, look for additional variations in meal composition as consumers select more snack items for meal occasions.

“We talk a lot about Gen Z, those under age 22,” said Portalatin. “They’re much more likely to engage in snacking behavior than older consumers and much more likely to be fluid in their lifestyle and work habits. As they age and become a more prominent part of the total consumer economy, you’ll continue to see these trends manifest.”