LENEXA, KAN. — Hostess Brands, Inc. has prioritized 5 of the fastest-growing client snacking events, a part of a plan designed to offer significant and sustainable upside potential for future progress.
The 5 segments — morning candy begin, lunchbox, afternoon reward, fast consumption and afternoon sharing — account for greater than $50 billion in gross sales and are rising at a compound annual progress fee of 5.6% over the previous three years, mentioned Andrew P. Callahan, president and chief government officer of Hostess, in a March 1 Investor Day presentation.
The 5 segments have been recognized as a part of Hostess’ analysis that discovered 18 distinctive client events.
The first section, morning candy begin, was described by Daniel J. O’Leary, chief progress officer, as “a modern way to look at breakfast, taking into account that consumers snack their way through the morning.”
“As the day has gotten longer, we see consumers increasingly adding a mid-morning snack, or if they’re like me, two snacks to give them the energy to start their day,” Mr. O’Leary mentioned.
Hostess mentioned the morning candy begin section has annual gross sales of $5.8 billion, of which $1.1 billion is good baked items, and three-year CAGR of 5.5%. Top snacks in this section embody refrigerated pastries, breakfast cookies, donuts, Danish, muffins and scones.
“Meeting our consumers’ needs in this occasion will unlock a larger source of volume for our morning snacking growth,” Mr. O’Leary mentioned.
The lunchbox section, in the meantime, has annual gross sales of $6.2 billion and three-year CAGR of 5.5%, Hostess mentioned.
“Lunchbox includes both adult and kid lunch and captures the midday snacks at both a company lunch on the go and sometimes replace it completely,” Mr. O’Leary mentioned.
The third section, afternoon reward, is an event when shoppers are on the lookout for “something sweet and tasty to either keep them focused through the afternoon or give themselves a rewarding break,” Mr. O’Leary mentioned.
The afternoon reward section has annual gross sales of $13.6 billion and three-year CAGR of 5.9%, Hostess mentioned.
Immediate consumption takes place all day when shoppers are on the go, Mr. O’Leary mentioned, including that snacks for this section are bought at comfort shops, merchandising machines and different shops when shoppers are in a rush. The fast consumption section has annual gross sales of $8.4 billion and three-year CAGR of 4.7%, Hostess mentioned.
The fifth and largest focused snacking event recognized by Hostess is afternoon sharing. The afternoon sharing section generates $19.3 billion in gross sales and three-year CAGR of 5.9%, Hostess mentioned.
“Afternoon sharing is unique because it’s an occasion that involves other snackers, whether they’re family, friends or coworkers,” Mr. O’Leary mentioned. “This occasion is one of the largest we identified and is an incremental opportunity for Hostess Brands.”
Mr. O’Leary mentioned Hostess Crispy Minis have been designed particularly to satisfy the afternoon sharing event’s wants.
“We found that it was as much as 40% incremental to the Hostess business and up to 20% incremental to the category as a result, meaning not only has this innovation brought incremental growth to Hostess through a consumer insight, it also brought growth to our category and retailers,” he mentioned.
“Taken together, we believe these five occasions provide huge upside potential for our future growth,” Mr. O’Leary mentioned.