Consumer preferences and tastes change

Consumer preferences and tastes change, which requires companies to continuously monitor trends and innovate accordingly. For example, concerns of consumers regarding health and wellness and obesity affect perceptions about product attributes and ingredients. In addition, changing consumer demographics could result in reduced demand for LNCE products, such as aging of the general population; changes in social trends; changes in travel, vacation, or leisure activity patterns; weather; or negative publicity resulting from regulatory action or litigation against companies in the snack food industry. Good and bad news as well as opinions about LNCE or their rival firms products and services travels instantly on social media outlets.

Consumers are trying to eat fresher, healthier snacks, beverages, and food. The volume of packaged food consumed is declining while the volume of fresh food is increasing. Firms like PepsiCo are actively developing a variety of healthier foods and beverages that focus on such areas as nutrition, weight management, improved digestion, disease prevention, and allergy remedies. These new products generally contain fewer calories, less fat, low carbohydrates, and/or less sugar and sodium. Many new products are gluten-free and/or whole-fiber.

Future

Since Snyder’s-Lance is very small compared to its major rivals, yet is performing quite well, should the company expand its manufacturing and distribution operations further penetrating Canada, and even venturing out into Mexico and Latin America and beyond? Economies of scale are critical in this business due to increasing price competition. The snack foods business is global, so to remain solely a domestic player in such an industry could be ineffective long term. In this light, the dilemma for LNCE is how, where, when, and to what extent to engage in geographic expansion. Since its largest customers, such as Walmart, are global, would it not be advantageous for the firm to negotiate deals with those firms to offer their products in other countries. Surely customers worldwide would enjoy eating the firm’s snacks just as much as Americans.