Dive Brief:
- Dollar stores could be the opportunity food companies need to push processed foods to more consumers.
- At these retailers, food companies tend to sell smaller, cheaper versions of their center store products. These are more affordable for consumers who are still in low-income households, which remains common following the recession recovery.
- Dollar stores are an $80 billion industry with a 6.5% CAGR from the end of the decade as compared to 4% for conventional grocery stores.
Dive Insight:
General Mills is one such company that sees dollar stores as a viable market for products like its cereals, Betty Crocker, and Hamburger Helper. The company saw 8% growth in the dollar and drug store channel in 2014, as compared to 1% growth in net sales overall that year.
Processed foods companies are looking to new ways to attract consumers to processed foods. While making processed foods with more natural ingredients is one common tactic for food companies these days, packaging the products differently to yield a more affordable price is another option.