Growth Strategy Case for Handheld Snacks

The popularity of handheld snacks and mini meals has been growing in the United States for several years, driven by new eating patterns. This growth strategy case addresses how consumers are enjoying more mini meals and grazing, partially due to contemporary, mobile lifestyles.  

While many Americans are eating more meals at home during COVID, and some are taking time to sit down with their partner, family or roommate, many are not. 

There are approximately 28% of Americans who live in single, one-person households who can’t sit down to family dinners.  Even in larger, family households, not all meals are taken together, as family members have different schedules. Those who are at home are also pressed for time with the demands of virtual schooling and virtual work.  Finally, there are many who dislike cooking.

Growth Strategy Case: Meet Consumer Needs with “Doughy” Handheld Products

The handheld, highly-convenient Hot Pockets brand has seen sales increase during COVID lock down.  Handheld foods with a wrapper meet consumers’ need for taste, ease of preparation, ease of eating and require very limited cleanup.  These include:

  • sushi’s nori
  • Hot Pocket’s pastry
  • Totino’s pizza rolls’ dough
  • McNuggets’ tempura batter
  • burrito’s tortilla
  • breakfast sandwiches’ bagel

To meet this demand, we worked with a food manufacturer to develop a comprehensive growth strategy for handheld foods with a dough “wrapper.”  The foods were required to be handheld, convenient, great tasting, satisfying and affordable. 

The handheld food growth strategy case addressed both retail products sold in supermarkets for in-home consumption along with foodservice products sold by convenience stores, quick service restaurants (QSRs), and coffee, bagel and donut shops.  

Bottom-Up Market Analysis

The first step was to create a definition for this category that could be used, as the data is not typically looked at by a category such as dough.  Working with our client, we went through the items currently sold that could fit this definition in each channel from the bottom up. We also studied substitute products that could be delivered dough based.  The data analyzed was consumption growth of these items for several years, along with the sales trends. 

Strategic Growth Opportunity Areas (SGOAS) Assessed

We started with approximately 13 initial strategic growth opportunity areas (SGOAs) that reflected a combination of the consumption occasions, the target consumers and the channels. 

From this, we identified five focus SGOAs for the handheld growth strategy. For each, we understood their:

  • size
  • growth
  • margins
  • competitive set
  • innovation required
  • manufacturing and packaging needs
  • supply chain needs
  • product needs
  • sales requirements to service
  • marketing  

A deep dive competitor analysis was part of the assessment, including understanding the players in the market and outside the market.

Growth Strategy Case: Handheld Prioritization within Corporate Strategy

With the comprehensive assessment understood, cross-functional management aligned on the priority areas for the handheld growth strategy. Two of the areas were within supermarket retail and the other three areas were within foodservice. The total estimated opportunity was $500 million. 

The challenge for the food manufacturer was to maintain a long-term focus on the handheld growth opportunities, as their legacy business is in a different area, and can be a resource hog.  The corporate strategy was silent on growth in handheld foods.  The manufacturer was aware that large customers were asking them to develop handheld growth products, but the legacy business and corporate prioritization prevented research, development and innovation resources from being assigned.

Ultimately, the company made an acquisition that was aligned with the corporate strategy and strengthened their position in handheld products.

This growth strategy case was completed by the Insight to Action Experts. Contact us to start a conversation about your growth goals.

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