Pandemic or not, consumers have an appetite for sweet snacks
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Hostess, maker of Twinkies and Ding Dongs, reports quarterly profits Monday. The pandemic has mostly been a good thing for the big players in the “indulgent snack industry.” People have been eating at home, finding a little extra comfort in cookies and cupcakes.
I have a box of Twinkies in front of me, and I’m going to do what I think most Twinkie eaters try to avoid at all costs: Flip the box over and read the ingredients.
Sugar, enriched flour, high fructose corn syrup, eggs. Beyond combining for 280 calories a serving, they’re all seeing inflation, according to Rebecca Scheuneman, an analyst with Morningstar.
So far this year, corn prices are up more than 30%, while wheat is also up double digits. Scheuneman said those aren’t the only ingredients in the inflation mix.
“We’re also seeing freight inflation and labor inflation. So consumers can expect to see some higher prices on the shelf or possibly some smaller package sizes,” she said.
Ben Garrison said he would be fine paying a little more for his beloved Donettes. Better than reducing the number of frosted mini donuts in a family pack.
“Yeah, if you doubled the price, I wouldn’t bat an eyelash,” he said.
Chocolate Donettes got Garrison through much of 2020. Cooped up in his San Antonio home, he was juggling his day job, his toddler, and hiding his donut habit from his wife.
“She was folding a basket of laundry and I went, ‘oh no,” because I had totally thrown a bag of donuts into that basket,” he said.
Now that the world is opening back up, people are starting to think about seeing their judgy coworkers again and they’re cutting back on their midnight sugar binges.
That’s not necessarily bad news for the indulgent snack industry. It gets a lot of sales from 7-11s and gas stations, which people could be visiting more often.
David Garfield with the consulting firm Alix Partners said there’s another source of demand to keep in mind.
“Kids going back to school and those that are packing lunch obviously, and I think after-school snacks aren’t going anywhere.”
And it’s been hard to have after-school snacks without school.
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