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.
- Hostess introduced new formats, such as Bouncers, which are “poppable” versions of treats such as Twinkies and Ding Dongs.
- Mondelēz noted that it has seen strong growth in products popular for school lunches, such as snack packs featuring Oreo or Nutter Butter cookies, as well as Ritz crackers. In Europe, it continues to see growth in items such as chocolate bars.
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.
- While times may be tough for some people, there’s a significant opportunity for retailers across categories to sell small indulgences.
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.