To increase sales, private label sweet and salty snack makers and retailers need to address consumer health concerns and keep their snacks economical, tasty, and innovative.
Hear that loud, happy crunching? It’s the sound of consumers enjoying their favorite pastime: Snacking.
Snacks – sweet, salty, or both – are part and parcel of the American diet, even as the nation’s obesity-fueled health crisis grows.
But to increase sales, private label sweet and salty snack makers and retailers can’t rely on consumer munching habits alone. When the chips are down, they need to address consumer health concerns and keep their snacks an economical, tasty, innovative, and high quality alternative to national brand offering.
Euromonitor International projects sales of sweet and salty snacks to grow at a steady 2 percent rate between 2011 and 2016.
“Snacking remains an integral part of U.S. diets and the recent boom in all-natural/multigrain/healthy products should only serve to reinforce this trend,” its November 2011 report noted.
SymphonyIRI Group’s total U.S. FDMx (supermarket, drugstores and mass merchandisers excluding Walmart), sales of sweet and salty snacks for the year that ended June 10, shows that some private label snack products far outsell the national brands. Sales of private label pretzels rose more than 11 percent to $106 million from the previous year, while overall pretzel sales rose less than 1 percent.
Likewise, sales of the private label version of the nation’s most consumed snack, potato chips, jumped 8.4 percent to $274 million, while overall potato chip sales rose less than 2 percent.
Some snacks are better positioned than others to appeal to consumers seeking affordable, better-for-you snacks. Euromonitor’s research shows consumers view dried fruit, nuts and bars made from these ingredients as healthy and “growing consumer interest in combating obesity and eating a balanced diet will serve as the primary impetus behind this growth.”
A snack attack often includes an impulse purchase, and fickle consumers constantly want to delight their taste buds. A snack product doesn’t have to have the obvious healthy ingredients to be viewed by consumers as better-for-you, as the popularity of 100-calorie packs of cookies and chocolate candy can attest.
But better-for-you benefits alone won’t sway snackers. Private label snack retailers and manufacturers need to remember that fast-food restaurants and other venues will continue to challenge them for consumer attention, dollars, and taste buds.
Join The Party
Private label snack manufacturers have clear advice: If you’re not already on it, you need to join the better-for-you party. You’ll also have to assure consumers that private label snacks are economical and meet the quality expectations in flavor that consumers expect from national brands.
Ann M. Benzel, president of Benzel’s Pretzel Bakery in Altoona, Pa., which has made pretzels for more than a century, agrees that the snack food industry is “reinventing itself to conform to the nationwide campaign to fight obesity. Years ago, snack foods by nature were not viewed as health foods. Today, to keep shoppers in the snack food isle, everyone is scrambling to improve their products.”
She notes that Benzel’s is “very fortunate to already provide a snack food [pretzels] that is low in fat or fat-free and tastes great. However, we are adapting these products by reducing sodium, adding grains, protein and fiber in some instances,” she says.
Today Benzel’s manufactures more than 30 different shapes, sizes and flavors of pretzels, but overall, “most of the products in the salted snack category have been around for some time,” she says. “There are not many brand-new items being introduced. We add flavors, change a shape, or dip them in chocolate, but pretzels are still pretzels and chips are still chips. Often, it is the smallest change that produces the greatest variation in a product and that is what garners consumers’ attention.”
Benzel is adamant that one focus must remain consistent: product quality.
“Today’s consumer knows what he or she wants and they are willing to challenge the manufacturer or the company providing that product,” she says.
All Wrapped Up
Focusing on private label quality also includes a focus on packaging.
“Packaging is important when selling impulse-oriented goods like dried fruit,” says Jane Asmar, vice president of marketing and sales for the Fowler, Calif.-based National Raisin Co.
Asmar notes that packaging that highlights health and other benefits is becoming more common, and retailers who support incremental promotional activity such as back-to-school or holiday snack promotions “can place significant inventory in a small footprint on the sales floor.”
Although raisins remain the top dried fruit product, more exotic dried fruit such as mangoes are gaining popularity, she says. Dried, sweetened cranberries are posting the highest overall sales growth, and its private label versions “are possibly the best opportunity that retailers have for private label growth,” she says.
Quality also extends to cross-merchandising and displays, says Randy Johnson, vice president of sales at Perham, Minn.-based Barrel O’ Fun Snack Foods Co.
“Retailers are creating more than just a private label with their store brand salty snack offerings; they’re creating a new destination brand in their stores,” he says, one that is “creating a larger shelf presence, creating more noise in the snack aisle.”
Johnson says to compete with national brands, retailers with successful private label snacks use at least 12 feet of product display to create a banner in the snack aisle and use permanent secondary displays, as well. He stresses that retailers need to think outside the box and offer consumers meal and serving solutions and sampling opportunities to help convince them to make the switch to private label.
Some of the creative private label marketing he’s seen includes cross-promotions between private label salty snacks and national brand beverages, cross-promotions that create quick meal solutions – such as private label tortilla chips and Mexican food ingredients – or a “buy one national brand, get a free private label salty snack” trial that makes it easy for consumers to conduct their own taste challenge.
“The private label programs that see the most success are run like national brand programs – the same attention, space and promotion and marketing enthusiasm are directed at the private brand program as the national brand program,” he says.
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