Kellogg Sees Double-Digit Growth in Snacking Amid Consumers’ Inflation Concerns

Kellogg’s snacking sales are growing as consumers turn to comfort foods amid financial difficulties.

The Kellogg Company, parent of its eponymous brand as well as a range of other popular food brands, including Pringles, Cheez-It, Pop-Tarts and more, is seeing snacks sales rise, increasing from 8% to 26% depending on the region, according to the company’s fourth-quarter earnings results reported Thursday (Feb. 9). This growth is being driven primarily by the more indulgent products and less so by Kellogg’s healthier snacks, such as nutrition bars and crackers.

“Leading the way [in North America] were world-class brands like Pringles and Cheez-It, both of which generated double-digit consumption growth in 2022, and Pop-Tarts and Rice Krispies Treats, both of which sustained their multiyear momentum as well,” Kellogg CEO Steve Cahillane told analysts on a call.

This increase mirrors what other food brands have seen, a rise in consumption of foods typically associated with comfort eating at a time when, given the economic environment, anxiety is high.

For instance, on its fourth-quarter earnings call last week, snack and confectionery giant Hershey observed that in the current economic climate, consumers have not been cutting out their chocolate purchases but rather leaning on them for stress relief.

“Chocolate and Salty Snacks, rank as two of the top three resilient treats that consumers are not willing to forgo,” Hershey Company CEO Michele Buck said at the time. “Chocolate moments are such a heavily integrated part of consumers’ weekly routines, from rewarding moments to stress relief to self-care, and everything in between, that they indicate they would rather cut back on other expenses to make room for chocolate because they love it so much and it’s affordable.”

Indeed, consumers are facing economic anxieties. According to data from PYMNTS’ December study, “Consumer Inflation Sentiment: In It for the Long Haul,” which is based on a survey of more than 2,300 U.S. adults, 88% of consumers said their paychecks have not kept pace with inflation, and of those, 72% are very or extremely worried about the U.S. economic situation.

Plus, few see an end in sight. Research from PYMNTS’ January study, “Consumer Inflation Sentiment: Perception Is Reality,” found that consumers anticipate inflation will continue above normal levels through July 2024.

“Overall, the consumer in the U.S. is in a good place,” Cahillane said. “And when you look at the categories that we play in, it remains very strong. So, they are cutting out discretionary items — we all know high-ticket items are under a lot of pressure — [but] our categories are doing very well. And if you look at the emerging markets, the same can be said.”

Consumers have been cutting back on their grocery purchases, but it seems that indulgent categories such as snacking are not where they are making these changes. The “Perception Is Reality” study noted that 69% of consumers have made changes to their grocery shopping lists in the last year in response to rising prices.

Fifty-nine percent have reduced the quantities of items they are purchasing, and 35% have reduced the quality. Yet, even in the face of these changes, it seems, comfort eating remains elevated.