Julia Illera, Research Manager at Euromonitor International
Research manager at Euromonitor International, Julia Illera, a market research provider, shared insights about Australian consumers, noting a dichotomy between indulgence and moderation, with health and wellness trends shaping consumption innovation in the snacking landscape.
"Since the pandemic, Australians have become more health-conscious, and snacks have seen great innovation around healthier and better-for-you products and formulations," said Illera.
This includes those fortified with nutrients, containing less sugar or carbohydrates or shifting away from artificial colours, flavours, and preservatives. While health continues to be a concern for Australians as they are snacking more frequently, consumers are also strongly driven by a preference for indulgent flavours, looking for moments of permissible indulgence in their food choices.
Illera continued that Australians were looking to snacking as the ultimate comfort, with traditional and familiar local iconic brands driving consumption in Australia. Snacks that spark a feeling of nostalgia also provide an opportunity for comfort and indulgence, with many brands relaunching discontinued products.
One example would be Tasty Toobz, discontinued in 2015 and relaunched permanently by Smiths in December 2021.
In response to the conflicting needs of indulgence and moderation, the Australian snacks landscape in 2023 has witnessed the emergence of treat-sized products. These offerings, such as Choc Chip Better Cookies Minis by the No Nasties Project, provide consumers with a controlled portion size while delivering an indulgent experience, featuring an 80 percent reduction in sugar content. Additionally, new sharing formats like Ben & Jerry's Pieces or Magnum Bites are gaining popularity, catering to consumers seeking portion control without sacrificing indulgence.
Brand collaborations and activations remain significant, enabling companies to tap into nostalgia by collaborating with beloved brands. Examples include Kit Kat partnering with Milkybar and Allen's collaborating with Kirks. These collaborations bring familiar flavours to consumers and create impulse moments through novelty and indulgence. For instance, Darrell Lea collaborated with The Cheesecake Shop to transform signature cakes into decadent chocolate bars, offering consumers a unique and indulgent experience.
In savoury snacks, partnerships with food chains have become a strategy to enhance customer experience and introduce new flavours. Smiths Snackfoods, a major player, has collaborated with fast-food chains like Subway, Red Rooster, and Mad Mex to launch innovative flavours, including a limited-edition Mad Mex Hot Sauce variant for its Double Crunch range. Such partnerships often target specific occasions, like Cadbury's release of an Old Gold Peanut & Honeycomb variant in its Chocolate Coated Nuts range ahead of Father's Day in collaboration with Old Gold. In specific categories, such as chocolate confectionery, these collaborations drive premiumisation.
Changing eating patterns have led to new consumption occasions for snacks, sparking innovation in product development. Critical drivers for snack consumption include value, flavour, and nutrition. Australians are willing to invest in premium products for special occasions, and this trend is expected to continue in chocolate confectionery and ice cream.
Australia's consumers seek snacks with novel and fun flavours and sensory experiences. Indulgent and exciting textures, flavours, and formats are anticipated to drive value and catalyse impulse purchases. Health and sustainability are also becoming focal points for innovation in the Australian market. Consumers are increasingly conscious of the supply chain's environmental and social impacts and the health effects of snacking.
Sustainability is evolving into an expectation, with consumers desiring inherently sustainable products without a premium price tag. Health-conscious consumers are expected to seek snacks with portion-controlled packaging, lower sugar content, higher fibre and protein, and no artificial ingredients. The plant-based or vegan category will likely grow, aligning with health and sustainability trends, particularly confectionery and ice cream. Industry players must prioritise innovation to meet consumer demand for sustainably produced and healthy snack options.
Increasing cost-of-living pressures have made consumers increasingly price-sensitive, particularly in discretionary categories such as snacks. More consumers have shifted towards economy brands, and promotions and discounts drive consumption.
"Value-seeking behaviour is also set to drive sales and share growth for private labels in 2023, with grocery retailers like Aldi and Costco well-placed to provide greater value for money."
With input costs continuing to rise across the supply chain for packaged food, industry players are increasing unit prices in Australia, with many opting to reduce pack sizes (shrinkflation) rather than increase overall shelf prices. Brands such as Mars Australia are increasing their investment in the Australian market, expanding local manufacturing, releasing new flavours and formats, and rolling out sustainable paper-based packaging (Mars with its Mars, Snickers, and Milky Way countlines).
Read more insights from snacking below:
