According to new data from NielsenIQ (NIQ), increased snack prices have led many consumers to turn to private label options.
Unveiled at Groceryshop 2023 in Las Vegas, NIQ’s new ‘Snackonomics’ reported snack category dollar sales have increased 12.8%, driven by increased retail prices. Inflation in the snack category is higher than food overall, according to NIQ and prices have risen 18% over the last year. The snacking industry in the U.S. has approximately $135bn in annual sales.
“Overall, private labels are up across all departments. It's up 13.5% total market and 16.7% in that value channel that I was indicating,” said Lorelei Bergin, VP or North American Retail at NielsenIQ who spoke of the report. “Snacking is no different. It's definitely an increase in this space. But what's important to note here is that if the branded items do not start coming up with more strategic ways of combating private labels, they're going to lose out."
Statistics from Circana’s Unify+ database, available at plma.com, reflect these findings. Private label salty snacks rose over 28% in dollar sales and 8.4% in unit sales over the past 52 weeks ending Sept 10, 2023. Subcategories like potato chips, increased 31.2% in dollar sales and 5.9% in unit sales while tortilla chips (29.1%-dollar sales/11.6% unit sales) and pretzels (23.8% dollar sales/13.7% unit sales) also showed strong store brand growth.
Bergin added that snacks are becoming a large area where consumers trust private label products and are willing to switch. According to the NIQ data, 44% of consumers believe that private label has good value, if not equivalent, to branded items, and that it’s a good alternative to branded items. More than a third (35%) said that private label snacks are “higher quality for equal value.”