At the intersection of What’s for Dinner
and Food Sales is the United States Department of Agriculture SNAP
Program. So just what is SNAP: SNAP provides
nutrition benefits to supplement the food budget of needy families so they can
purchase healthy food and move towards self-sufficiency. Focus o
Steven Johnson Grocerant Guru®
at Tacoma, WA based Foodservice
Solutions®, stated, “all food retailers need to understand how the SNAP
program can or could help them drive top-line sales and bottom-line profits. That
includes Restaurants, Convenience Stores, Grocery Stores, Dollar Stores, and
First did you know that overall, SNAP consumers
account for nearly one-quarter (24%) of total CPG spend, and are more likely to
have children, live in urban areas and be in the bottom 30th percentile in
purchasing power compared to non-SNAP consumers.
In case you did not know, Numerator,
a data and tech company serving the market research space, has released its
latest report—Helping SNAP Consumers
During Economic Headwinds—which examines the full impact
of the Supplemental Nutrition Assistance Program (SNAP) on modern consumers
through the analysis of verified purchases by SNAP recipients. Overall, SNAP
consumers account for nearly one-quarter (24%) of total CPG spend, and are more
likely to have children, live in urban areas and be in the bottom 30th
percentile in purchasing power compared to non-SNAP consumers. Here are
Consumer Behavior & Sentiment Findings:
SNAP recipients represent a diverse group of
consumers. 61% of SNAP recipients are in the bottom 30th percentile
in terms of purchasing power, 45% have children (compared to 28% of non-SNAP
households), 29% have 5+ members in their household, and 37% are Gen Z or
Millennial. Compared to non-SNAP households, SNAP households are twice as
likely to be Black/African-American or Hispanic/Latino.
Economic uncertainty affects SNAP households more
severely. 79% say their financial situation is the same or better
compared to the prior year, but 1 in 5 SNAP households say they are overwhelmed
with financial burdens and 56% are concerned about job stability (compared to
31% of non-SNAP recipients).
Even with government assistance, SNAP recipients feel
food insecurity. Over 1 in 4 SNAP consumers (26%) say they are unable to
buy enough food to feed their family.
Health issues and healthcare costs are significant
concerns. SNAP consumers are 3.8x more likely to be disabled, and
they are 56% more likely to be not actively managing their health, compared to
Utilization of SNAP during a shopping trip results in
larger purchases. When SNAP consumers utilize their benefits during a shopping
trip, basket size is $15 more, spend per trip on groceries is almost $18 more,
and units per trip double (from 5.2 to 10.4).
SNAP recipients are disproportionately spending more
per unit. In the latest quarter ending 12/31/2022 compared to YA,
SNAP consumers are paying 13% more per unit, compared to 11% more for non-SNAP
consumers – driven by increased inflation on baby and health & beauty
products that SNAP consumers over-index on, as well as in the Dollar channel.
To save money, SNAP recipients are pulling back on
snacks. Units purchased per household are down significantly in
snack categories such as popcorn (-23.6% vs YA), meat snacks (-18%), and snack
seeds, nuts & trail mixes (-15.9%).
Trading down to private label helps to reduce the
sting of inflation. Although unit
sales are down, Walmart, Aldi and Kirkland private labels are outperforming branded
CPG. For example, Great Value unit sales are down 4% vs YA, compared to branded
unit sales dropping 20%.
Affordable luxuries like personal care items have not
seen a pullback on spending. Categories such as
toothbrushes (+6.3% units per household vs YA), beer (+4.6%) and face makeup
(-0.5%) are holding their own or growing with SNAP consumers.
SNAP consumers vary their shopping locations. SNAP
consumers are 56% more likely to spend their CPG dollars at Dollar stores, 24%
more likely at Convenience stores, and 12% more likely at Mass retailers
(compared to non-SNAP consumers).
Regional and ethnic grocery stores are winning SNAP
household trips because of their lower price increases. Among the
retailers growing trips with SNAP households are H-Mart (42% of projected
trips), Market Basket (42%), Whole Foods Market (36%), 99 Ranch Market (35%),
and Wegmans (31%).
SNAP consumers are 37% more likely to eat out four or
more times per week, but they are moving food trips back to stores. As SNAP
recipients pull back on dining out, Starbucks, KFC, Burger King and Little
Caesars are seeing the most lost trips.
More inclusive grocery delivery services would benefit
consumers and retailers. 20% of SNAP recipients say they wish that
grocery delivery services made it easier to utilize their program benefits.
Currently, 12.9% of SNAP consumers use Walmart+, followed by DoorDash DashPass
(5%), and Albertsons Freshpass (4.3%).
Numerator is a data
and tech company bringing speed and scale to market research. Numerator
blends first-party data from over 1 million US households with advanced
technology to provide 360-degree consumer understanding for the market research
industry that has been slow to change. Headquartered in Chicago, IL, Numerator
has 2,000 employees worldwide; 80 of the top 100 CPG brands’ manufacturers are
Who are you selling to today?
Where can you be selling food tomorrow and to whom?
Don’t over reach. Are
you ready for some fresh ideations? Do your food marketing ideations look more
like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your
retail food brand while creating a platform for consumer convenient
meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the
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