PeaTos targets lovers of “junk food” snacks
US consumers who have turned to comfort foods during Covid-19 will again seek better-for-you snacks once the pandemic is over, up-and-coming manufacturers in the sector have told an investor conference.
Executives from US savoury-snacks firm PeaTos, low-sugar sweets supplier Lily’s Sweets and jerky maker Country Archer Provisions agreed shoppers had sought to indulge to alleviate the heightened stress of living through Covid-19 but would seek out healthier alternatives when the virus is tackled.
“People are eating worse during Covid because there’s been a lot of other stresses people are focused on,” PeaTos founder and CEO Nick Desai told a virtual conference held by investment bank Houlihan Lokey. “That said, I think that’s going to change as we head out of this and get back to our normal routine. I think suddenly we’re going to see it flip quite a bit because people are going to be focused on health and wellness more than ever.”
Los Angeles-based PeaTos positions itself as a business that “swaps out the traditional corn base and artificial ingredients from some of America’s biggest snack brands” and replaces them with peas and natural ingredients.
Desai, who set up PeaTos in 2017, told the conference the brand had seen its sales rise in recent months. “For us, in particular, it’s been a huge boom for us because we are creating an analogue of America’s favourite comfort food, so the fact comfort food is back in vogue is actually helping us.”
Eugene Kang, the chief executive of California-based Country Archer Provisions, agreed US consumers’ turn towards less healthy snacks would not continue.
“With Covid, we’ve seen a deceleration around better-for-you and towards unhealthy eating habits. I think it has a lot to do with the stress levels we’re facing at this time. We’re in a global pandemic. Arguably, you could say we’re in a recession. It’s an election year. Work-from-home, the stress levels are incredibly high,” Kang said.
Country Archer launched its zero-sugar beef jerky in the US this summer in a bid to target consumers following the keto diet.
“We do believe that, as we even look at anecdotes around our zero-sugar jerky and how fast that is growing from a velocity perspective to our core line, we do have conviction that, as we come out of this pandemic, consumers are going to get back to their regular dietary trends around keto, Whole 30, high-protein, low-sugar intake and really get back to being more active and having more outdoor activity. We don’t think that this trend is going to continue to stay.”
Jane Strode Miller, the CEO of Lily’s Sweets, a Boulder-based business that offers stevia-sweetened confectionery and baking products, suggested US consumers had also returned to brands with which they were familiar during the crisis.
Asked what had been the company’s biggest challenge during the pandemic, Miller pointed to fewer opportunities to get consumers to try out their products.
“The toughest thing for us during Covid was from the standpoint we haven’t had people be able to try our product. People don’t believe something that’s sweetened with stevia can taste good. We need that physical sampling … to get people to convert to the product. The biggest positive surprise is that people are still trying to cut back on sugar. I’m happy to report there were still a lot of people that were, like, even if the world’s going to hell I’m still going to eat a lot of products without any sugar,” she said.
She added: “I think it’s well-documented people buy snacks for taste first. When Nick and Eugene talked about comfort food I agree with that 100% but I’d also add to that people went back to brands that they knew, so newer brands have a little bit less of a chance of somebody going there because you’re going to buy something you’ve been buying for a long time.
“I think like for our three brands, who can actually crack the code on taste and we can then get people to actually try the product, because if you can have a great-tasting product that’s also good for you why would you buy the alternative? There’s a reinvention of snacking that we’re doing that is just giving that exposure that you’re not giving anything up, plus you’re getting the benefit of wellness.”