How Packaged Food Brands Plan to Maintain Momentum

As 2021 comes to an end, Big Food remains on solid ground. “The biggest surprise this year is that consumption of packaged foods remained elevated despite mobility returning and food-service establishments regaining customers,” said Robert Moskow, a senior analyst at investment bank Credit Suisse. Part of this is due to the same trends that fueled growth for legacy packaged food brands in 2020: People are seeking comfort in an uncomfortable time; more shoppers are turning to ecommerce, where they’re encountering targeted ads; and consumers aren’t eating meals outside their homes as often as before the pandemic. Throughout November and the beginning of December, for instance, customer transactions at major restaurant chains were flat compared to the same time last year, but down 12% compared to the same period in 2019, according to market research firm NPD Group. Another factor behind the industry's sustained sales is remote work. More time in the house essentially means more breakfasts and lunches from the pantry. More than half of all U.S. adults say they're cooking more now compared to prior to the pandemic, according to market researcher Ipsos. While some companies have plans to bring employees back into the office, the omicron variant and reinstated indoor mask mandates around the country are making some reconsider. A Gartner survey of 238 executive leaders, conducted in late August, found two-thirds of organizations are delaying reopening their offices due to new Covid-19 variants. “I definitely think the work from home trend is going to be very sticky,” Moskow said. Packaged Foods Are Seeing a Spike in Demand That Could Continue for Years With the wind at their backs, here's how legacy packaged food brands aim to keep the momentum going into 2022: Surprise and delight Shoppers have a tendency to get bored easily. Especially when it comes to traditional advertising. Winning their attention back is part of why so many consumer-packaged goods (CPG) brands are making merchandise and apparel right now. But getting people to pause and look can happen through other means, such as children's art. Last month, a new campaign from Pebbles cereal asked kids to submit their paintings, drawings and doodles. The brand plans to showcase select submissions on murals located in Denver; Nashville, Tenn.; Los Angeles; and New York from Dec. 16 through Jan. 13. "We're going beyond broadcast," said Claudine Patel, CMO of Post Consumer Brands, the manufacturer behind Pebbles, Honeycomb and Honey Bunches of Oats breakfast cereals. In summer, Pebbles also got together with British-based cosmetics and skin care brand Revolution Beauty to create a colorful makeup collection. Licensing, Patel noted, is one route the company is using to remain in the moment. "We're trying to bring our brands to culture and bring culture to our brands," she said. Keeping things fresh and exciting also means coming out with new flavors. In April, Goldfish crackers, owned by Campbell Soup Company, partnered with McCormick & Company's Frank’s RedHot to release a hot sauce-flavored cracker. Goldfish followed the collaboration with another twist on the classic product line: ’90s-inspired jalapeño popper Goldfish. The brand has plans to launch more product innovations in the new year. In its 2022 trend report, snack company Kind predicts partnerships between celebrities and food brands—such as Lady Gaga and Oreo or Anthony Davis and Ruffles—will continue to increase as shoppers appear hungry for limited-edition products that provide some entertainment. Last year, Ritz teamed up with ice cream company Coolhaus to make a crackers and cream mashup. More recently, the brand worked with New York bakery Baked by Melissa on some cupcake collaborations. Looking ahead, brands are likely to continue "reaching consumers through cool things that people share on their own, versus just being served an ad," said Santiago Gómez Bernal, director of marketing at Mondelēz International, the Chicago-based snack company behind Ritz, Oreo and Sour Patch Kids. Ritz, together with The Martin Agency, has also been pushing the idea that the brand is part of the important things in life—love, family, belonging—through its "A Taste of Welcome" campaign. "Purpose will continue to be something that we are expecting more of and consumers are expecting more of," added Gómez Bernal. TikTok around the clock In September, video-sharing platform TikTok surpassed 1 billion monthly active users around the globe, strengthening its status as a good place for brands to be. In celebrating the best collaborations between brand marketers and creators on the site, TikTok put Goldfish on its first ever Culture Driver list for its #GoForTheHandful challenge, which featured dancer and choreographer Taylor Pierce and Dallas Mavericks’ center Boban Marjanović, who can fit 301 Goldfish crackers in the palm of his hand. The campaign, supported by ads on other channels, garnered more than 10 billion views in three days. "The lifeblood of snacking is innovation," said Janda Lukin, CMO of Campbell Soup Company’s snacks division, which includes Goldfish crackers, Cape Cod potato chips and Snyder’s of Hanover pretzels. Lukin noted this applies to tweaks in product lines, but also communication and "how you're tapping into what's happening in the broader cultural environment." https://www.tiktok.com/@goldfishsmiles/video/6945555303253462278 As long as TikTok remains a place where people gather, other brands are sure to invest. Earlier this month, for instance, Coca-Cola introduced its first U.S. TikTok challenge with help from Grammy-nominated artist Khalid. From Dec. 19-21, Honey Bunches of Oats is running a TikTok challenge under the hashtag #MakeABunchHappen, designed to encourage users to bring some joy into the world through volunteering, donating or surprising a friend. Mondelēz International has dedicated itself to building up its brands on the platform. This summer, both Oreo and Sour Patch Kids surpassed 1 million followers on TikTok, eclipsing those of other candy and snack brands. Going further, platforms like TikTok are bound to shape cooking habits in 2022. More than one-third of U.S. adults say social media has altered their approach to cooking at home, according to a Harris Poll survey published in Instacart's 2021 Year in Groceries report. "Based on the overwhelming growth of social media food trends this past year, we can expect to see even more viral food moments showing up and influencing the way we meal plan, shop for groceries and cook in the kitchen,” said Laurentia Romaniuk, Instacart’s Trends Expert, in the company's study. Balancing health and indulgence In the years leading up to the pandemic, however, things weren't going great for Big Food. Smaller startups boasting healthy ingredients were stealing market share. Private label brands, which have improved in quality and sophistication, were doing the same. "Big food brands have benefited the last couple of years from people seeking out comfort food, more indulgent snacks—things that give them an emotional benefit," Moskow said. "So you have contradictory impulses from consumers where they want to eat healthier, but they also want something that's going to ease the stress of living during a pandemic." Getting the mix just right can be difficult, but brands are trying. In January 2022, for example, Oreo plans to release Oreo Thins Extra Stuf, a new line of cookies with nearly double the amount of creme filling as regular Oreo Thins. "People [are] in different mindsets in different moments of the day," Gómez Bernal said. "So having a broad portfolio that is well-balanced in that regard is probably one of the best weapons we at Mondelēz have." Kristina Rogers, global consumer lead at professional services firm EY, noted more than half of shoppers say health has become a more important purchase criteria since the pandemic. At the same time, legacy food brands have already been pivoting into the space. “Most are reformulating products or launching new, healthier lines to appeal to increasingly health-conscious consumers,” Rogers said. For consumers who want it both ways, Rogers continued, there’s a growing prominence of healthier alternatives in pretty much every food category, such as vegan ice cream and plant-based burgers. As Lukin put it, consumers "want to indulge, but they are also looking for things that are better for you." CPG Manufacturers Are Spending Less on National TV Ads

Year in Review

How Legacy Packaged Food Brands Plan to Maintain Momentum in 2022

Innovation, TikTok and balancing health with indulgence

Paul Hiebert

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