Trends

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Trends

Low Price Points and Customization Could Boost Snack Sales

The snack segment takes many forms in foodservice. For some restaurants, it encompasses a section of the menu apart from more significant appetizers and small plates. Operations like sports and cocktail bars may offer complimentary snacks on the bar, like nuts and olives.

In fast-casual eateries and coffee shops, packaged grab-and-go snacks like baked goods are commonplace. “Fifty percent of all food consumed are snacks, and whether people are buying these at restaurants or retail, the real estate and shelving dedicated to snacking is only growing in all areas,” says Arlene Spiegel, president of restaurant and hospitality consulting firm Arlene Spiegel & Associates, based in New York City.

Forecasts project total U.S. snack food revenues will grow almost 5% annually between 2020 and 2025, according to New York City-based market research firm Statistica, revealing the potential in this segment.

From a foodservice perspective, consumers can travel many avenues when purchasing snacks. The coffee and snacks segment brought in $50.7 billion in revenue last year and grew 4.6% between 2014 and 2019, according to Los Angeles-based IBISWorld’s “Coffee & Snacks in the U.S.” report. Like any other aspect of foodservice, operators selling snacks had to adapt to changing consumer preferences over the past five years, especially those relating to health, premiumization and environmental protection.

In response, some operators expanded the number of healthy snack options on their menus, according to IBISWorld. Other operators sought to attract customers by offering high-end coffee and snacks, catering to premium trends.

“There are different ways to position and utilize snack menus,” says Jay Bandy, president of Goliath Consulting Group, located in Norcross, Ga. “When you have a bar program, crackers and peanuts get people to sit longer. Smaller portions also appeal to those wanting to scale down from entrees and appetizers; so, in that case, snacks are another approach to dining. With more people snacking throughout the day, it has taken over from meals as an overall trend in QSRs and fast-casual operations.”

Distinguishing Snacks

As one of the nimblest foodservice segments, coffee and snack shops were able to adjust to changing consumer preferences for more convenient and affordable menu items, according to the IBISWorld report. The definition of snacks in restaurants is broad and up for interpretation. “Fried plantains, empanadas and Brazilian cheese bread are popular snacks we’re seeing on menus,” says Spiegel. “There’s also been an influx of nutritional snacks with nuts, raisins, granola and crudités in fast casual.”

Snack items tend to be handheld, portable when packaged and affordable. “Snacks are add-on sales opportunities for restaurants and bars,” says Spiegel. “From a demographic standpoint, the Millennials and Baby Boomers and everyone in between are planning what to eat while at home during this pandemic. They’re ordering a sweet snack with coffee, savory snacks with cocktails or a salty snack with a beer.”

In terms of portion size, snacks are what appetizers used to be before these were substantially upsized for sharing. “Shareable appetizers are great but start to get pricey and typically turn into mini entrees,” says Bandy. “Snacks provide something small customers can nibble on with a cocktail or while waiting on food.”

For resourceful operators, snacking can provide an opportunity to diversify revenue by entering the retail segment. “Entertainment venues, bars and Mexican restaurants are getting creative with their own branded snack lines in jars, such as seasoned nuts, signature pickles or olive mixes, which also could be ordered off the menu as an affordable snack,” says Spiegel.

Individualized Momentum

And in the foodservice environment moving forward, individual snacks may become more desirable than a shared plate. About a year ago, Goliath Consulting Group encouraged its clients to put snacks on menus as a way to add incremental items to checks.

“We found snacks drive check averages,” Bandy says. “It’s also always good to offer a value item under $10 as folks feel better about making that purchase. And snacks are flexible and work well in all types of bars and restaurants; we had good guest traction with these offerings.”

Customers would order two or three favorites from snack menus, according to Goliath’s reports from clients, so Bandy recommends providing a good selection. “We saw snacks trending with those we worked with to add diversity on menus as well as a good price range,” Bandy says. “With grocery prices flat or declining at the time and restaurants incrementally raising prices to cover wages, insurance costs and rent, this was a good way to approach a [marketing] solution from multiple angles.”

Unlike appetizers and small plates, snack offerings tend to be easy-to-prepare items. “We have seen pork rinds with fun seasonings bouncing on and off menus as snack items,” says Bandy. “Popcorn and popcorn snack mix that is chef driven with unique flavors also is popular.”

Snacks can be regional as well as ethnic, although the line between these menu items and appetizers can blur from time to time. “In the South, a smaller version of pimento cheese is on snack menus,” says Bandy. “We’ve also seen Mediterranean items, like hummus, single shish kebabs or baba ghanoush.”

One snack in the works with a Goliath client includes a homemade seasoned potato chips with house-made French onion dip. “We have a Georgia project with chips and dip on the menu. That client was looking at increasing their snack offerings,” he says. “It’s about keeping the plates small. And although concepts lean more toward a bar business, where snacks make the most sense, these are not the only venues going in that direction.”

Bandy notes snacks are more prevalent — and successful — on chef-driven menus. However, with the current pandemic and shrinking menus, it’s unclear what path snacks will take.

Columbus, Ohio-based Sbarro, which has 600 sites worldwide, is defined as a quick-service restaurant in the pizza segment but considers itself a major player in snacks. “We’re essentially part of the snack segment that also serves full meals,” says CEO David Karam. “Our efforts have been to extend the brand and its usage over the past 70 years. While pizza is a small part of the snack category, we have embraced it.”

Sbarro accomplishes this through the physical placement of its restaurants; its locations in high-traffic areas such as malls and airports include displays of pizza slices, stromboli and other Italian offerings that the chain can serve in smaller portions. “Pricing is certainly one variable in distinguishing a snack from a meal,” says Karam. “And the emphasis of our concept is pizza by the slice. When people see our display, it’s an impulse transaction like a snack.” He adds that consumers don’t want to wait as long for a snack as they would for a full meal. Sbarro displays items in a ready-to-eat format, which minimizes wait times.

Targeted Equipment

From an equipment standpoint, appropriate lighting and different display elevations have been key in Sbarro’s pizza slice merchandising tactics. “It’s about speed and display with equipment in the snack segment. We’re equal parts restaurant and retailer, so when thinking about snacking occasions, the goal is making sure food is presented in an appetizing way. By doing so, customers instantaneously conceptualize what looks appealing and what they can get quickly,” says Karam. “We’ve sourced over the years what we call a finishing oven that allows us to have both speed and consistency with producing pizza.”

Equipment and tabletop items provide greater opportunities for specialty presentations, including small snacking plates or grab-and-go foods. “Restaurants also can take advantage of point-of-sale displays for proprietary snacks,” says Spiegel.

Some business and industry concepts have also seen the potential of the snack segment and have added integral equipment. “I work with B&I accounts, and they’re finding they need to put more single-serve snacks out,” says Spiegel. “In the current environment, no one wants salad bars or self-serve options, so our clients are being creative and turning salad bar merchandisers and open refrigerated cases into grab-and-go snack stations with prepackaged, safety sealed snacks.”

This investment in the segment is negligible as equipment geared for snack prep is typically minimal and, therefore, affordable. “It’s mostly small equipment and smallwares,” says Bandy. “Baggies and vacuum sealing equipment are good for keeping air out of product like popcorn or pork rinds. Small warming cabinets with drawers come in handy with hot snacks.”

Snacks require quick prep time — no more than three to five minutes from ordering to serving — and presentation is key. “Tabletop wise, it’s presentation that counts,” says Bandy. “Operators should look at unique servingware, such as decorative cups, plates or other vessels, that can set it apart.”

One South Carolina concept uses a wooden tray with 3-ounce shallow white china for small portions of pickles, pimento cheese and nuts, says Bandy. “It was like a snack tray, but on a smaller scale,” Bandy says. “Operators can have fun with it and be creative.”

Changes Amidst a Pandemic

In the current COVID-19 environment, kitchens not only need to be reimagined for meals but also for snacks. “Things like tamper-proof containers are good snack vehicles,” says Spiegel. “This also is a good time for selling bagged goods.”

Overall, Bandy has noticed menus in general are shrinking by 30% to 50%. “Many are retooling their menus with a focus on packaged meals as opposed to breaking their offerings down,” he says. “As restaurants come back, we will get away from shareable plates, and individual snacks will play a bigger part on menus.”

These more budget-friendly single-serving portions could have great appeal to those hit hard in the pocketbook the last few months. “Value will be an important component on menus moving forward, and snacks will fill the need,” says Bandy. “This allows people to order down, similar to what happened during the last recession.”

Snacks will still fulfill the needs of consumers looking for variety and the opportunity to try different menu options. For Sbarro, whose sites cater to the entertainment, healthcare, education and B&I segments, along with malls and transportation centers (airports, travel plazas and train stations), snacking will remain a relevant segment.

“We have a detailed plan coming out of COVID-19,” says Karam. Sbarro has partnered with third-party delivery and catering companies and modified its menu options as well as added curbside pickup to its offering.

“Customers will want more convenient options when wading back in the waters after this pandemic,” says Karam. “However, right now, with the degree that pedestrian traffic is down, it will hurt the snack segment more than full meal occasions, which are more planned versus impulsive.”

Convenience is key as are the offerings and marketing. “While we don’t want to focus on suggestively selling snack items, we are experts in retailing and merchandising, so we will work on where to position specific menu items,” says Karam. “Whether it’s a cookie, other dessert or pure add-on, merchandising is a critical part of the snack occasion and will be more so in the future.”

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