Despite signs that the economy may finally be turning around, large snack brands — like PepsiCo and Conagra — continue to suffer. Further, creative marketing and price adjustments are not improving their sales. Are consumers just falling out of love with hyper-palatable morsels? Or is something else going on?
Why Snack and Soda Sales Are Crummy
It is easy to blame snack brands’ decline in sales on the cost of living and shrinkflation.
Especially when you consider the cost of groceries is up an average of 18% since 2020.
@sewerlidd #greenscreen #groceries #economy #inflation ♬ original sound – Sewerlidd
But unfortunately, things are not that simple. The fact of the matter is that consumers are no longer loyal to snack — or any other brands anymore…
Even when they try to lure buyers back with special discounts and offers.
Retail and consumer goods analyst for Oliver Wyman, Bobby Gibbs, commented on this trend to The Washington Post:
“CONSUMERS ARE CHERRY-PICKING PROMOTIONAL PRICES MORE AND RETAILERS ARE PUTTING OUT MORE PROMOTIONAL PRICING THAN THEY HAVE IN THE LAST FEW YEARS.”
Not only that, there seems to be an unspoken grudge customers have against brands raising prices in the first place…
For example, when PepsiCo raised prices 5% in Q2, sales dropped a corresponding 3.5 to 4% immediately after.
All that being said, what are these snack brands going to do moving forward and will it be enough…
Is It Too Little, Too Late for These Snack Brands?
Both PepsiCo and Conagra are feeling the heat from consumers regarding pricing.
In response, Conagra specifically tried some aggressively low — but temporary — promotional prices
However, sales still fell last quarter by 2.3%.
PepsiCo, on the other hand, is doubling down on marketing its “healthier” snack choices. They are doing so because these options have maintained steadier sales.
Ultimately, to say that snack brands are on their way out would be unrealistic and extreme. Nonetheless, this is a valuable lesson to not push your customer base too far…
Because they will bite the hand that feeds them.
Be Great,
GCTV Staff
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