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Getting in Sync with Snack Trends
From salty to sweet to savory, today’s snackers have definite preferences when eating on the run.
By Lisa White
With Americans on the go more today than ever before, snacks have become a staple to the diet as much as breakfast, lunch and dinner – maybe even more so.
And with an ever-growing roster of portable food on the shelves, c-stores are well positioned to capitalize on this growing segment. "On the c-store side, one-handed eating is still a force," says Kenneth Fries, president of Arlington, TX-based TNT Marketing. "Most times, purchases in c-stores are consumed within 90 minutes. Customers want convenience, choices and portability. They don’t have time to sit down to eat three meals a day."
According to the U.S. Agricultural Trade and Marketing Information Center, Washington, D.C., snack foods include candy, cookies, crackers, chips, cheese twists, dried fruit snacks, frozen novelties (such as yogurt, fruit cups, pudding and gelatin), grain-based snacks, granola snacks, hot snacks, meat snacks, nuts, parched corn, pizza, popcorn, pork rinds, pretzels, snack cakes and pies, spreads, and salsa.
These days, as more Americans become aware of weight-related health issues, low carb and high protein diets are all the rage. Currently, more than 61 percent of U.S. adults are overweight and 21 percent are obese. Consequently, media attention to obesity continues to escalate. In the first quarter of 2004, 8,218 articles appeared in U.S. newspapers and newswires (based on a Lexis-Nexis search) compared to 4,465 for the first quarter of 2003, according to Anne Wilkes, communications director at the Snack Food Association (SFA), based in Alexandria, VA.
In fact, according to a 2004 SFA Membership Survey that included the question, "What is the most significant trend or issue that will affect the snack industry and your company during the next five years?" respondents mentioned obesity more than any other trend.
Wilkes reports that the snack food industry is responding to consumers’ renewed interest in low fat products. After reaching a peak in the late 1990s, sales of low-fat products decreased for several years. At the height of the low fat market in 1997, low and no fat potato chips accounted for 10 percent of total category sales. In FMI’s 2004 Trends Study, half of all shoppers said they are most concerned about fat content, compared to 20 percent who are watching carbohydrates. The study also found that overall concern with nutrition declined from 53 percent the previous year to 45 percent in the 2004 study.
Fries predicts that no sugar and low sugar sweets will be more prevalent than low carb items in the coming months. "When you look at the health issues affecting people nowadays, including diabetes, high cholesterol, poor eating habits and increasing heart disease, these trends are centered around Americans’ eating habits," he says. "Snack manufacturers will continue to address these trends, still realizing that only a handful of people will want these [healthful] products. There’s a reason people snack – to treat themselves."
The Sweet Stuff
Despite the fact that three-quarters of the population have never tried a low carb diet, many experts agree that the impact of high protein/high carb diets has been widespread over the last year. For example, in just over the first three months of 2004, more than 600 new low carb food and beverage products were introduced, according to Mintel’s Global New Products Database. That number is up from 289 new low carb product introductions in all of 2003.
One example of a major low carb line extension in 2004 was Hershey Foods’ Carb Alternatives candy in Reese’s miniatures peanut butter cup, chocolate candy with almond bar, Kit Kat wafer bar and Hershey’s Kisses brand chocolate varieties. Hershey’s also launched its 1 g Sugar Carb line, which includes chocolate candy, chocolate candy with soy crisps and chocolate candy with almonds, in March of 2004, adding Reese’s and dark chocolate candy varieties to this lineup four months later.
In addition to low carb snacks, the focus on natural and organic snacks continues, as well, says Fries. "This is because consumers have the perception that these foods are healthier," he says.
One recent introduction in this segment is Canadian firm Nature’s Path new Signature Series Cookies, made with organic whole grain flour. Flavors include Deep Chocolate, Ginger Spice and Lemon Poppy. Additionally, the company has targeted the lucrative kid’s market with its Organic EnviroKidz™ Animal Cookies in Honey Graham, Chocolate and gluten-free Vanilla varieties. Featuring four embossed images of a baby cheetah, gorilla, panda and koala, the cookies contain no hydrogenated or trans-fats (see sidebar).
Along with low carb line extensions and organics, an increasing number of sweet snack makers are focusing on the breakfast segment. Recently, McKee Foods Corporation, makers of Little Debbie snack cakes, introduced apple Danish, cheese Danish and cinnamon roll products to address this growing trend.
Another breakfast unveiling offers an alternative to the traditional soft pretzel. Kim and Scott’s offers an entire lineup of gourmet Breakfast Pretzels, including its newest Stuffed Cinnamon Roll, Original Twisted Omelet and Stuffed Herb Cream Cheese.
New twists on old snack favorites have been a continuously winning formula in this segment. For instance, Nestle now offers its Original chocolate Turtle chocolates using peanuts in place of pecans.
And ConAgra Foods’ Orville Redenbacher line has upped the ante in the popcorn segment with its new Drizzlers gourmet popcorn. Flavors include Milk Chocolate or White Fudge drizzled over popcorn, peanuts and butter toffee.
The crossover of traditionally savory snacks acquiring a sweet tooth is not limited to popcorn. Los Angeles, CA-based Adams & Brooks recently extended its sunflower kernel line with crunchy butter toffee coated P-Nuttles Sunflower Kernels.
Savoring the Salty
The salty/savory snack category also has benefited from consumers’ obsession with low carb diets. U.S. retail savory snack sales for 2003 were $23.5 billion, or a 4.5 increase over the previous year, according to the joint Snack Food Association (SFA) and Snack Food & Wholesale Bakery magazine 2004 State of the Industry Report. With the pork rind category experiencing a 36.8 percent increase over the previous year to reach 107.8 million pounds, it is speculated that this growth was due to the popularity of high protein/low carb diets.
Also capitalizing on consumer interest in low carb diets, Mister Snacks, Amherst, NY, introduced its soybean snack, called Soy Energy, in the fall of 2004. Stephan Stern, vice president of sales, says its four varieties, including plain, ranch, hot and spicy and barbecue, have been a hit with consumers. "More people are looking for healthier snacks, and we think the low carb trend will continue," he says.
Along with low carb savory snacks, innovative flavors continue to dominate this aisle. One product that marries two snacking favorites is Canada’s Spritz Sales’ dill pickle-flavored sunflower seeds. "The market for flavored seeds is expanding," says Chris Tamillo, national sales manager.
The company also has taken its product to the next level, offering novelty packaging to attract consumers’ attention. "We just came out with a spittoon cup in an 8-ounce size," says Tamillo, adding that the bag of seeds comes packed in the spittoon, which is a disposable paper cup that can be used to dispose of the shells.
Now available for c-stores, Proctor & Gamble’s Pringles potato chips’ newer Grab and Go packaging line provides an 80 g size for counter racks or endcap displays. Its Original, Cheezums and Sour Cream & Onion flavors can be marketed in combination with beverages to help increase sales.
Another snack manufacturer offering innovative packaging is Beer Nuts Brand Snacks. Tom Foster, director of new business development, says the Bloomington, IL-based company recently introduced its nuts in a beer can packaging. "This packaging was specifically targeted for c-stores’ on-the-go consumers. We understood the need to be both portable and pourable, so, in partnership with the Miller Brewing Company, we developed a tie-in campaign to encourage cross merchandising," he explains.
Foster adds that growth is the biggest trend in the salty snack category. "Retailers are looking for both new products and new programs," he says.
Snack Alternatives
Probably a snack category that has seen the most growth and innovation is alternatives. Comprised of meat snacks, granola/fruit snacks, energy bars and the like, a number of manufacturers are seeing increasing potential in these products.
This is a category that also has benefited from the low carb trend. U.S. sales of snack/granola bars rose 15.9 percent in 2003 due, in part, to a host of low-carb bars entering the market, according to the SFA. Total U.S. sales in supermarkets, drug stores and mass merchandisers (excluding Wal-Mart) were $1.9 billion, according to Information Resources. (IRI). The food bar market in all outlets is $3 billion and expected to double by 2007, according to The U.S. Market for Food Bars, a report published by Packaged Facts.
Portability is one reason nutrition bars have had continued success since their introduction. According to Fries, manufacturers such as Hershey’s continue to cross over into this "tweener" category. "This is the category between healthy and sweet snacks," he says.
Hershey’s recent alternative snack entry is its Smartzone nutrition bar. Developed according to the science-based principles of the Zone Diet, the bars are available in chocolate, lemon, peanut butter and strawberry flavors.
Nestle USA, maker of PowerBars, recently took portability in this category a step further with the introduction of PowerBar Energy Bites. With about 200 calories and 8 g of protein per bag, this product contains 17 vitamins and minerals.
Line extensions also are prevalent among other manufacturers selling alternative snacks. Reston, VA-based Highland Beef Farms, maker of meat snacks, now offers two flavors of shelf stable cheese dip. "Our major categories are still meat sticks in the c-store category, but we decided to move in a different direction," says Jay Hersch, president. However, he acknowledges that the new items are less of an impulse item, since the dip needs to be taken home and heated in the microwave before consumption.
He predicts kippered beef product will make a comeback due to its affordability compared to meat sticks.
Increasing costs also have reduced packaging sizes, says Jeff Fisher, executive vice president at Knauss Snack Food Company in Martinsville, VA. "We recently redesigned and relaunched our pouch beef jerky under the Bull’s brand," he says. Despite hearing about indications that the low carb wave is declining, Fisher says his company still sees strong growth year to year in the meat snack category. "But if the consumer has a choice between nutrition and taste, taste always wins. The key is to incorporate both and provide a solid taste platform."
Jon Starke, director of c-stores at Carl Buddig & Company, Homewood, IL, says c-stores are looking for snack items that are a good value. "People want more for their money, so big sizes continue to attract attention," he says. "There is a better display of good out there and, contrary to what many may think, bulk on wrap product has done very well."
He says the industry tends to "chase themes and programs, where, in reality, we are usually fooling ourselves about long-term trends. Trends are out for a year and then fade away," says Starke.
But Starke does note that today’s packaging offers many advantages for on-the-go c-store consumers. "The expansion of the on-the-go cup with a portable grab and go concept is big. It’s all about dashboard dining," he explains.
Taking this concept to a new level is Farmington Hills, MI-based Pioneer Snacks’ new Road Ready snack size smoked sausage canisters, which won Best New Product at the NACS Show recently. "On the run type themes and packages are continuing to remain popular with designers and consumers alike," confirms Craig Thomas, marketing manager. "It’s one reason our Road Ready canisters are doing well; they fit perfectly in auto cup holders."
With snack food lines expanding and new product introductions continuing, experts agree that the profit potential for this growing category remains strong for c-stores in 2005.
Lisa White is a freelance writer based in Cary, IL.
The Trans Fat Issue
The U.S. Food and Drug Administration’s (FDA) final rule on trans fat is the first significant change to the Nutrition Facts panel since the Nutritional, Labeling, and Education Act regulations were finalized in 1993. Some significant highlights are:
This final rule requires manufacturers of conventional foods and some dietary supplements to list trans fat on a separate line, immediately under saturated fat on the nutrition label.
Food manufacturers have until January 1, 2006 to list trans fat on the nutrition label. This phase-in period minimizes the need for multiple labeling changes, allows small businesses to use current label inventories, and provides economic savings.
FDA's regulatory chemical definition for trans fatty acids is all unsaturated fatty acids that contain one or more isolated (i.e., nonconjugated) double bonds in a trans configuration. Under the Agency's definition, conjugated linoleic acid would be excluded from the definition of trans fat.
Dietary supplement manufacturers must also list trans fat on the Supplement Facts panel when their products contain reportable amounts (0.5 gram) of trans fat. Examples of dietary supplements with trans fat are energy and nutrition bars.
— LW
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