The power – and profitability – of LTOs

CHICAGO — Limited-time offers (LTOs) offer manufacturers and foodservice operators long-term benefits. The innovations are not just the holiday-themed foods and beverages intended to get consumers in the spirit of the season. Rather, they raise curiosity and create an urgency to purchase because of their limited availability. They typically are flavor focused and may provide a multi-sensorial experience, meaning visual cues must be considered, as well as texture and mouthfeel.   

“While holiday flavors resonate well with consumers, brands can think beyond seasonal and offer LTOs tailored to any number of occasions, including sporting events, movie releases or in collaboration with a popular influencer,” said Rebecca Shurhay, marketing analyst, Flavorchem, Downers Grove, Ill.

Rachael Jarzembowski, marketing manager, Wixon, St. Francis, Wis., said “Limited-edition flavors allow consumers to experience new flavors in a familiar format with minimal risk.”  

When the approach is taken, LTOs attract cautious consumers who want something familiar, as well as adventurous consumers who are willing to step outside their comfort zone and try something uncommon, said Megan Church, global product marketing for flavors, Nourish IFF, South Brunswick, NJ.  

Sometimes, however, LTOs are about providing shock value and grabbing headlines. This is especially true with Gen Z and its “phygital” mindset, said Dylan Thompson, senior marketing and consumer insight manager-food and beverage, Symrise NA, Teterboro, NJ. Phygital is the combination of physical and digital for an enhanced experience. It’s what social media is all about and LTOs provide fodder for a post.

“We now see trends on TikTok start, take-off and make it to mainstream media within a few days or even hours,” Mr. Thompson said. “So, it’s important to keep it fresh when you’re looking to target the younger generations.”

Lisa Jackson, director of marketing, FlavorSum LLC, Kalamazoo, Mich., said, “Novel and seasonal flavors can attract new customers, provide a test market and encourage shopper engagement. They are an excellent tactic for brands to connect with people.”

Some categories tend to innovate more frequently with LTOs. Baked foods, snacks, alcoholic beverages, hot beverages and breakfast cereal make up 60% of limited-edition launches, according to Mintel, Chicago.

To better compete in the LTO space, Campbell Soup Co., Camden, NJ, eliminated 577 stock-keeping units, which was 16% of its portfolio, during the past two years, said Valerie Oswalt, president of Campbell Snacks, Norwalk, Conn.  

“This allowed us to free up line time to innovate and provide excitement,” Ms. Oswalt said. “LTOs are about providing an elevated experience. Think of them as the core product with a plus.”

She explained that while Goldfish crackers historically have been considered a children’s snack, the brand always knew parents were eating them. Company data showed 40% of Goldfish crackers are consumed by adults.

That insight motivated Campbell Soup’s innovation team to introduce limited-edition, adult-centric flavors this past year, including two co-branded concepts: Old Bay Seasoned and Dunkin’ Pumpkin Spice Grahams. The LTOs came on the heels of the success of Frank’s RedHot Goldfish Crackers in 2021.

“One of the best ways to grab consumers’ attention and stand out in a crowded market is to offer limited-edition flavors,” said Shannon Cushen, director of marketing, Fuchs North America, Hampstead, Md. “These kinds of products are known for generating buzz on social media and building excitement and anticipation.”

Jennifer Creevy, food and drink director, WGSN, London, said, “The cost of living in a crisis is incredibly difficult, but consumers are seeking a revival of that feeling of awe and wonder that has been lacking for the past couple of years. (It’s time to) disrupt and break the design laws for your brand.”

Symrise has been tracking the growth in LTO occasions. Some are just a single day, such as Pie Day, said Mr. Thompson.

“Summer festivals is an interesting one that we’ve see growing as consumers look to bridge the gap between experiences, music, food and art,” Mr. Thompson said. “LTO’s inspired by summer festivals are something we expect to grow.”