The year 2020 wasn’t a sweet one for packaged sweet snacks. Like many other center-store categories, packaged sweet snacks struggled. But 2021 saw recovery for the category with sales up 14.3% year over year, according to the NACS State of the Industry (SOI) Report of 2021 Data. Monthly CSX data show sales have recovered past the declines experienced in 2020 and are more closely mirroring the monthly sales figures from 2019.

Part of the fun of the sweet snacks category is the limited-time offers.

“Part of this is simply the recovery of many in-store categories as trips and transactions increased from 2020,” said Jayme Gough, research manager, NACS. Packaged sweet snacks accounted for 1.12% of in-store sales in 2021, an increase of 0.06 point from 2020, according to the 2021 NACS SOI Report.

“The sweet packaged goods category in the c-store channel is up more than 11% in dollar sales compared to a year ago,” said Tina Lambert, vice president, insights, innovation and activation, Hostess Brands LLC. “Convenience store consumer traffic declines during COVID have been the biggest shortterm challenge to growth, but we are incredibly pleased to see traffic is beginning to return to pre-COVID levels.”

NieslenIQ data indicate that total U.S. convenience packaged sweet snacks sales accelerated 8.4% in 2021 compared with 2020—a unit increase of 3%. This small category also produced $2,026 in sales per store per month in 2021, with margins for the category jumping year over year from 44.10% in 2020 to 45.44% in 2021, according to the 2021 NACS SOI Report. “This helped boost category gross profits 17.7% to a total of $921 per store per month in 2021,”Gough said.

As the category rebounds, challenges to growth remain. For Duchess convenience stores, the biggest barrier to increased sales in packaged sweet snacks has been inventory constraints. “We have found many out-of-stocks are hindering the growth of this category,” said Nathan Arnold, director of marketing for Englefield Inc., which owns and operates the 120-unit chain based in Heath, Ohio. “In addition, fluctuating price points have made some consumers change behavior to purchase one instead of opting for a twofer price.”

At Mighty Moose Marts in Keene, New Hampshire, the store has seen gross margin grow for its own-brand packaged sweet snacks compared with national brands. “For example, we know that Hostess spends a lot on marketing, and we benefit from the brand awareness and loyalty they have built,” said Chris Rietmann, owner, Mighty Moose Marts. “So, for us, it’s a matter of balancing the well-marketed sweet snacks against our self-packaging options in order to continue making a profit in both.”

INNOVATION

New flavor profiles have consistently driven sales to the category. “Innovation in packaged sweet snacks was paused to some degree during 2020, but manufacturers are back with new flavors, proteinor caffeine-enhanced products and other items specific to particular dietary restrictions, such as vegan or gluten-free,” Gough said.

New fruit flavors like mango and line extensions of existing flavors, such as McKee Foods Corp.’s Little Debbie Mini Zebra Donut Snack Cakes, have been popular in the category at Duchess stores. “A favorite flavor profile like Zebra can now be found in additional items,” Arnold said. Caramel, mint and fruit have been popular packaged sweet snacks flavors at Mighty Moose Marts as well.

Other flavors performing well of late focus on sweet breakfast tastes, like lemon and cinnamon, according to Hostess. The brand launched lemon into convenience stores as a single-serve option in Hostess Baby Bundts in late 2021 to meet demand. Arnold also sees customers gravitating toward protein-rich snacks, which have become a big focus for many brands. Caffeinated items have been popular, too, even in donuts, “but our customers have been less inclined to grab those items as opposed to protein,” he said. “Vegan and other dietary restriction products have been less requested in our area, but gluten-free continues to be a product category that select customers are reaching for, although we haven’t seen many recent sweet snack product introductions that feature this callout.”

As the demand for energy-boosting food and beverages continues to grow, Hostess launched Hostess Boost Jumbo Donettes in the c-store channel as an “alternative source of caffeine and to give adults a grab-and-go way to jumpstart the day,” said Lambert.

“We have offered a few protein and caffeine-enhanced products and seen some excitement from consumers, but it hasn’t yet manifested itself in a strong subcategory,” added Rietmann. “However, we expect this to continue to grow.” Mighty Moose Marts also dabbles in this enhanced-foods segment because “we realize we must have some products in our core categories that meet the dietary needs of customers.”

SEASONAL SWEETNESS

The future is strong for packaged sweet snack products, and it gets better every day as more people return to the office and are back on the road post-pandemic.

As with other categories, seasonal flavors and products in packaged sweet snacks are popular. “Part of the fun of the sweet snacks category is the limited-time offers,” Arnold said. “We see many of our consumers purchasing and requesting the newest release in sweet snacks,” he said.

“The Tastykake brand has a wide variety of seasonal flavors,” Patterson-Smith of Flowers Foods said. Tastykake designs its packaging to highlight the seasonality of the flavors and capture consumer attention for the limited-time offers. “Consumers tend to favor lighter fruit flavors in the spring and summer months and shift to warming, comforting flavor classics like caramel apple, pumpkin and mint chocolate in the fall and winter,” Patterson-Smith said.

That lines up with what Duchess customers have gravitated toward. “Pumpkin Spice is always a huge hit. Candy, coffee, donuts and other sweet snacks that fit this flavor profile are always very popular in the fall,” Arnold said. “We have seen some fruity summer sweet snacks, and peppermint and chocolate in the winter do very well, too.”

To ensure customers are aware of seasonal offerings, Hostess provides retailers with displays to highlight their brands and the wide range of seasonal flavors, such as pumpkin and ginger bread in the fall and raspberry lemonade in the summer.

These retailers and suppliers agree the category will continue to rebound as convenience store traffic increases. “The future is strong for packaged sweet snack products, and it gets better every day as more people return to the office and are back on the road post-pandemic,” Patterson-Smith said.

The Power of CSX Data

CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or [email protected] for a complimentary executive walkthough.