With consumers continuing to crave nostalgic indulgences, packaged sweet snacks are well-placed to regain losses sustained in 2020. “Packaged sweet snacks had a tough year but there are positive signs the category is beginning to rebound as people return to more normal activities and work,” said Jayme Gough, NACS research manager.

Nearly every convenience store sells packaged sweet snacks, and the category in the past has been a top 10 in-store sales and gross margin contributor. Last year, packaged sweet snacks brought in 1.61% of in-store sales, according to the NACS State of the Industry Report of 2020 Data. The category brought in $43,686 annual sales per store in 2020, a 2.7% dip year over year. NACS CSX monthly sales data show that during the first three months of 2020, packaged sweet snacks sales per store, per month were on track to increase over 2019, but in April, category sales dipped with the onset of COVID-19 and recovered the remainder of the year with numbers akin to 2018.

“Gross margins for the category dropped from 41.00% in 2019 to 38.57% in 2020, leading to a total gross profit decline of 7.4% year over year,” Gough said. In terms of subcategories, according to the NACS SOI report, only muffins/donuts grew sales and gross profits in 2020.

But 2021 growth in packaged sweet snacks in convenience stores won’t be without its challenges. The Hershey Company sees fewer trips as the biggest hurdle for packaged sweet snacks to overcome. “While trips are up versus last year for convenience, they are still off versus 2019 in the morning daypart,” said Glenn Frazier, director of category management for c-stores at The Hershey Company. “This is primarily from many companies still letting employees work from home, which has hurt packaged sweet snack sales.”

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Mindy Shaltry, director of category development for biscuits for Mondelēz, said, “Because of COVID-19, we saw convenience shopping missions shift more to fill-in trips and take-home consumption, which has meant some adjustments to package sizes.” She added, “Also, as the reopening continues this year and people are more out and about, we are seeing traditional immediate consumption occasions in sweet snacking rebound nicely.” As a result, Mondelēz has made a concentrated effort to provide a full range of sizes and varieties to meet the consumer need for on-the-go eating, as well as take-home options.

We want to continue to engage those light and lapsed buyers in this category with these special offerings.

A Sweet Merchandise

Consumers view the dessert and cookie subcategories of packaged sweet snacks as a “permissible indulgence,” said Gough. “Packaged sweet snacks can be one of the impulse purchase categories in a convenience store, so merchandising near the counter or coffee bar can drive even more category sales.”

Emphasizing the portability of packaged sweet snacks can be another way to increase sales. “Prepackaged items tend to be a great offer for consumers who are on the move and will eat while performing some other activity, which will likely pick up as more customers get back onto the road for work, school and other activities,” Gough said.

Mondelēz has made a concentrated effort to provide more packaging options for the convenience channel to meet the consumer need for on-the-go eating as well as take-home and sharable options.

Some retailers focus on a particular daypart with their packaged sweet snacks. Mendez Fuel, with four locations in Miami, has a small section of packaged sweet snacks. “We have mostly muffins, donuts and banana bread for breakfast time,” said owner and founder Michael Mendez.

Other retailers concentrate on providing unique selections to grab customer interest. At Dia’s Market in Austin, Texas, unusual packaged sweet snacks, like Crispycakes and Moondance gluten-free brownies, have been a hit with customers. “We don’t have a large selection of pre-packaged sweet snacks, but these two brands in particular fly off the shelf,” said owner and founder David Hopper. “In fact, we sell so many, our supplier can’t keep up with demand.”

As the reopening continues this year, we are seeing traditional immediate consumption occasions in sweet snacking rebound nicely.

A Sweet Season

Like with other categories, seasonal and limited-time offerings can be a hit with consumers and keep interest high in the category. “New package types or flavors of sweet snacks around holidays can catch the eye of consumers and invite them to purchase,” Gough said.

Dia’s Market stocks a limited supply of seasonal packaged sweet snacks as well as popular flavors like birthday cake year-round. “We’ve found through trial and error which holidays are more popular with our customers and only order those seasonal sweet snacks,” Hopper said. For example, Halloween-, Christmas- and Valentine’s Day-themed packaged sweet snacks do well, along with mocha and mint chocolate flavors, but Hanukkah and Easter flavors and colors do not.

Mendez Fuel brings in seasonal packaged sweet snacks, including pumpkin spice in the fall and Christmastime flavors or colors in the winter. “Usually, these move pretty well for us, as people tend to buy more than one at a time for sharing, especially as offices begin to open up more,” Mendez said. “The seasonal items add a little pop to our packaged sweet snacks.”

Mondelēz dipped its toe into the limited-edition pool in 2019, with Oreo S’mores for the convenience channel. “We had done limited-time offers for other channels, but this was the first time we had expanded to convenience,” Shaltry said. Since then, Mondelēz has added other limited-edition Oreo options, including Oreo Lady Gaga in the first quarter of 2021, Oreo Team USA available during the summer, and Oreo Gingerbread coming in November—all of which are supported by unique convenience activation.

“We want to continue to engage those light and lapsed buyers in this category with these special offerings,” Shaltry said. “I think it’s one of the key ways that we can engage shoppers in packaged sweet snacks because we know they are looking for variety and seasonal flavors in their favorite sweet snacks.”

Other ways companies have kept the category fresh has been mashups, like Reese’s Snack Cakes. “Despite the morning daypart being off, the product has performed well in the afternoon and evening dayparts at convenience stores because of the brand equity of Reese’s,” Frazier said.

A Sweet Future

These suppliers and retailers believe the packaged sweet snacks category will rebound in 2021. “As the workforce returns to the workplace, we envision that the morning daypart will come back, and we will encourage merchandising to welcome back those shoppers into the packaged sweet snack category,” Frazier said.

Overall, the category is one that resonates with consumers. At Dia’s Market, Hopper will continue to stock packaged sweet snacks. “I don’t see us wavering from our current packaged sweet snacks,” he said. “I want to sell items that are fun and exciting, and the packaged sweet snacks we carry deliver that.”