Wednesday, February 22, 2012

Smaller Portions Tap Growing Consumer Need

Food companies, in their effort to promote healthier eating habits, are tapping a growing consumer need for portion control – which might just get us to snack more often.    

SnickersMars, Inc., the maker of Snickers, Twix. M&M’s and many other tasty delights announced it will no longer sell candy bars that contain more than 250 calories by the end of 2013.  This means that some of its best sellers will slim down.  Snickers regular size will shrink from 280 calories to 250 calories, and the 540 calorie King Size version will be replaced with multi packs of smaller units.  Mars also announced it will trim its sodium levels in its products.

This move ties in nicely with Michelle Obama’s Partnership for a Healthier America initiative.  Sixteen of the biggest food manufacturers have signed on to reduce 1.5 trillion calories by the end of 2015 by reducing calories or portions, or both.  With 2/3 of Americans either obese or overweight, and childhood obesity on the rise, this move is needed.  

Offsetting Higher Ingredient Costs

Data reported by the National Confectioners Association, shows that the chocolate candy business grew 5% in 2011. This growth has been largely due to price increases taken to offset higher material costs.  Candy unit sales have been flat for the last several years.  Manufacturers must find ways to reduce costs as price increases are hurting unit sales. Smaller bars may boost profits.

The Magic of Turning Light Users into Regular Users

Heavy users of any food category (people who enjoy eating a product regularly – say once per week) usually make up a small percentage of the population but account for most of the category sales.  Light users (infrequent) or lapsed users (who no longer purchase) are a much larger group.   Moving a small percentage of the light and lapsed users to regular users can lead to tremendous growth. 

Tapping a Growing Consumer Desire for Portion Control

Light and lapsed users of snack or indulgent food categories admit they don’t purchase regularly because they feel guilty indulging or letting their kids indulge.  Their guilt really stems from a feeling of loss of control – knowing that if they give in, they often consume too much.   They still love these products but blame the food company for exploiting their weakness and even causing the inevitable arguments with kids over eating right. 

The need to be in  control of consumption is a strong insight across in-home and out of home food consumption.  Mars’s move to standardized calories at lower  levels helps remove consumer guilt and deliver a feeling of some control.  Expect to see more calorie portion control products and more (not less) calorie call-outs across all food categories. 

So candy companies, who understand this insight, can make changes designed to reduce America’s waistline while gaining more regular users, and slightly more profit in every bite.


Jim said...

Oh please, I will admit, great positioning, but all part of the food CPG "Honey Who Shrunk The Kids" shell game. Higher costs, shrink the product, sell at the same price or slightly lower, make margin. I will not forget the last time Pepperidge Farm cookies on sale to learn they went from 3 sleeves to their new 2 sleeve format.

Bob Clark said...

Good point Jim. I agree Mars is going for profit her but portion control is going to be a big deal in food

Bob Clark said...

Good point Jim. I agree that Mars is going after profit but portion control is a good trend to watch.