Winning With Lower-Income Consumers

With over half (52%) of U.S. households now earning less than $75,000 a year and food and menu prices continuing to soar, it’s time to offer more innovative food and beverage solutions to help lower-income shoppers better manage the food needs of their families.

And a big opportunity it will be. The 41 million participants in the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP) are projected to spend $115 billion on CPG food and beverages this year, according to IRI’s recent “SNAP: What a Difference a Year Makes” webcast.

The NPD Group reports that members of U.S. households with incomes under $75,000 eat 89% of their meals and snacks at home. Here’s a look at some of the purchasing priorities and preferences of these budget-minded consumers and recommendations for addressing them.

• Make everyday eats easier. Thirty-eight percent of households with annual incomes under $75,000 cook four to six times a week, and 30% cook one to three times weekly, according to Mintel’s 2022 Cooking in America report. Only one-third of lower-income consumers regularly cook from scratch, per IRI. Convenient meal starters like Betty Crocker Sheet Pan Dinner Starter kits or Progresso dried soup mixes in eight-serving “family size” packs are right on target.

Lower-income consumers are significantly less likely than their higher-income counterparts to be flexitarian or to prepare plant-based meat alternatives/blended entrées, per FMI’s The Power of Meat 2022 report. However, they are frequent frozen seafood eaters and are the consumers most likely to use appetizers as a meal, according to Mintel. Castle Bites, a bite-sized version of White Castle sliders, are well positioned as a meal option.

IRI data shows that SNAP consumers are driving dollar and unit sales for prepared entrées, sides, and deli soups. Savvy marketers are adding excitement to basic household staples. Riviana Foods’ Mahatma line now includes Chipotle Jasmine Rice, for example. And Bertolli has introduced white pasta sauces, including a Cacio e Pepe Alfredo sauce.

For the year ended Sept. 4, 2022, lower-income/SNAP shoppers continued to increase dollar sales of baking and breakfast items, including pancake mixes, frozen breakfast handhelds, and more, while buying fewer snacks and treats, packaged drinks, and alcoholic beverages as well as less meat and poultry, per IRI.

Convenience counts even for budget-conscious consumers. New Smucker’s Uncrustables Meat & Cheese Bites and BerryFields almond butter and fruit handheld sandwiches from Willamette Valley Pie Co. both can go straight from the freezer to the lunch box, making them easy lunchtime options.

• Add a touch of at-home indulgence. Households with incomes under $75,000 continued to cut back on restaurant visits and takeout in the third quarter of 2022, per NPD’s CREST, which helps put demand for restaurant-quality food prepared at home at an all-time high. Consumers can get a bit of the dining-out experience by adding new Panera Roasted Garlic Demi Baguettes to the dinner table. For a quick dessert, Conagra Brands’ Snack Pack pudding is available in a Cinnabon variety inspired by the iconic cinnamon roll flavor.

NPD reports that one in four families with household incomes under $45,000 is completely eliminating restaurant visits and takeout, which means that the need for convenient and affordable multi-serve meals and kid-specific fare continues to grow. Campbell’s Veggie Safari condensed soup is sure to be a hit with kids.

One-third of SNAP recipients live in one-person households, IRI reports, creating opportunities for single-serve frozen meals and desserts. Single-serve Sweet Logic Mug Cakes are simple to prepare in a microwave. Entenmann’s Cake Truffles offer an affordable taste of indulgence in bite-size form.

Although some research has shown that lower-income households are no more likely than those with higher incomes to purchase private label brands, IRI data indicates that SNAP shoppers account for more than 50% of dollar sales of store-branded deli pizza, buns/rolls/croissants/breads, natural cheeses, frozen fruit, frozen seafood, and deli trays/party platters.

• Don’t ignore health goals. Consumers with household incomes under $50,000 are much more likely than others to be influenced by specific health claims. They’re significantly more likely to be concerned about stress (54%), lack of energy/tiredness (52%), hypertension (49%), anxiety (48%), heart health (47%), being overweight (46%), high blood pressure (44%), and high blood glucose (44%), according to a 2021 USA Trend Study from HealthFocus.

Lower-income consumers also are less accepting of GMOs and are more concerned than some others about the environmental impact of growing, processing, and delivering food, according to HealthFocus.