The snack industry is struggling. As grocery prices continue to rise, consumers are looking for ways to save. Higher-priced, unnecessary items, like snack cakes and granola bars, are often among the first things shoppers leave on the shelves in an effort to trim their grocery budgets
"It's a difficult time because people are seeing their budgets get tighter, and as much as they enjoy snacking and snacking brands give them pleasure, it can be something to cut off their shopping lists," Jenny Zegler, director of consumer analysis firm Mintel Food & Drink, told CNN.
General Mills (NYSE:GIS) CEO Jeff Harmening has said that net sales were down double digits in the U.S. snacking categories in the company's fiscal Q4.
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Meanwhile, Campbell's (NASDAQ:CBP) CEO Mick Beekhuizen shared similar news about his company's fiscal Q3. "We now expect adjusted earnings to be at the low end of the guidance range due to the slower-than-anticipated recovery in the snacks business,” he said.
Many snack companies, desperate to keep earnings from slipping even farther, are reverting to an old-school sales tactic: the celebrity partnership.
Mondelez (NASDAQ:MDLZ), the maker of snacks like Chips Ahoy!, Belvita, and Wheat Thins, saw modest and durable growth during Q3, according to CEO Dirk Van de Put. However, it did have two brands that were performing better than expected–Oreo and Ritz.
What do those two brands have in common? Celebrity spokespeople.
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Ritz has partnered with Puerto Rican rapper Bad Bunny. Mondolez Category President, Savory Snacking Steven Saenen told CNN the goal of the partnership was to attract more Latino consumers.
"[Bad Bunny] is a true cultural icon for multicultural and Hispanic audiences. He's also a self-professed lover of the Ritz brand himself, so we think it's a perfect collaboration," he said.
Mondelez ‘s Oreo brand has also partnered with a Latin superstar, actress and singer Selena Gomez. Her limited-edition cookies are inspired by horchata, a creamy rice-based beverage popular in parts of Latin America, and the company hopes they'll attract more Gen Z consumers who may otherwise be uninspired by the classic cookie.
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Oreo Vice President of Marketing and General Manager Michelle Deignan told CNN that partnerships like these have "become even more important as consumers' purse strings tighten and they don't have a lot of disposable income to spend."
Zegler said that celebrity collaborations often work because consumers use them to justify pricer purchases they may otherwise avoid for the sake of staying on-budget.
"Consumers rethinking how much they're going to buy of some of these brands is going to remain a constant, so that's where these limited edition releases or marketing campaigns might help keep a brand in the shopping cart," she told CNN. "These crossovers help with that relevancy."
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