The news: Despite some stiff economic headwinds, several snack food and sweets manufacturers are increasingly bullish about their outlook for the remainder of the year.
An affordable treat: Inflation has driven a large share of consumers to take steps to save money at the grocery store. For example, 43% have traded down to a private label brand, per our Insider Intelligence Grocery Survey conducted with Bizrate Insights.
Paths to growth: While many consumer packaged goods brands such as Kraft Heinz and Conagra Brands used price hikes and shrinkflation to deliver solid financial results despite a slowdown in sales volume, both Mondelēz and Hostess saw volumes grow thanks in part to products that parents can pack in their children’s lunches.
The big takeaway: Consumers are not fully rational. If they were, phenomena such as the lipstick effect—the term used to describe consumers’ willingness to indulge in less costly luxury goods such as lipstick in the midst of an economic downturn—would not exist.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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