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There’s no doubt about it — snacking continues to grow in America. While some consumers seek out healthy snacks, others still rely on old standards like potato
Eye on the National Brands: Salty Snack Flavor Trends
Although traditional potato chips, pretzels, and the like drive the bulk of the salty snack business, that hasn’t stopped branded product manufacturers from experimenting with potentially enticing flavors, which run the gamut from culinary inspirations to Latin riffs, even hints at health-and-wellness.
chips, looking for new flavors to spice things up.
No matter what the snack of choice, some 64 percent of consumers often snack between meals, according to Mintel’s March 2013 “Cereal Bars and Snack Bars — U.S.” report. What’s more, in 2012, 52 percent of all eating occasions among American consumers were snacking occasions, up from 49 percent in 2010.
“The once-dominant concept of snacking as a special occasion has gone by the wayside as consumers look to small bites to bridge gaps between meals,” said the report.
According to a new study of 6,600 consumers conducted by Market Force Information, of the categories studied, snacks were the second-most-frequently purchased type of private label groceries. More than half of respondents said that they buy private label snacks some of the time, 22 percent choose them most of the time, and 7 percent always opt for private label snacks.
Mintel estimates that sales of the salty snacks measured in its January 2013 “Salty Snacks—U.S.” report, reached an estimated $17.1 billion in 2012, a 30 percent growth in sales since 2007. The category is forecast to grow another 17 percent from 2012–17 (8 percent when adjusted for inflation). The report noted consumers ages 25–44 have above-average tendencies toward purchasing most kinds of salty snacks, a smart target market for these products.
In salty snacks, potato chips still reign, but David Hyland, director of global business development, snacks for Daymon Worldwide, said he’s been seeing new potato chip flavors emerge, including Hot Dog, Ketchup, Steak, and Maple Bacon.
Potato chips represent the largest share of category sales, according to Mintel, comprising 43.2 percent of the market in 2012. Private label potato chips have a 3 percent share (more than any other private label salty snack), and while sales have dropped over 6 percent, private label potato chips still brought in over $402 million for the latest 52 weeks ending August 11, 2013, according to SymphonyIRI Group data.
Another snack category, often appealing to health-conscious shoppers, is private label snack nuts—a more than $1 billion category, up 8 percent according to the IRI data.
“Consumers are knowledgeable about the overall health benefits that nuts and mixes can offer, and there is a general acceptance that these types of products are good-for-you,” said Vonnie Veldman, director of business development for Wythe Will Tzetzo Companies. “Mainstream purchasers are not driven by a particular attribute, but more so the overall eating experience and benefit.”
“Consumers are knowledgeable about the overall health benefits that nuts and mixes can offer, and there is a general acceptance that these types of products are good-for-you."
Despite the attractiveness of tried-and-true approaches to nuts, some retailers are experimenting. Trader Joe’s offers Sesame Honey Cashews, with the nuts coated with sweet Thai honey and sesame seeds.
IRI reports that ready-to-eat popcorn is up nearly 30 percent in unit sales compared to a year ago. Flavor is also driving some store brands here, as seen in the 365 Everyday Value Applewood Smoked White Cheddar Popcorn from Whole Foods Market.
Yogurt-covered snacks have been breaking onto the scene this year. IRI reports private label carob/yogurt coated snacks up 47 percent to more than $18 million
with about a 3 percent share of this growing category, most likely attributed to the recent overall popularity of yogurt items.
“The explosion of growth for yogurt items in the dairy case has had a halo effect for all yogurt-coated dried fruit, nut, and pretzel products,” said Mark Devencenzi, national sales director for Falcon Trading Company and SunRidge Farms. “Better-for-you snacks continue to surge in popularity, and this is reflected in private label programs. The very successful Kroger Simple Truth private label launch includes three yogurt-coated items: Almonds, Raisins, and Pretzels.”
“The introduction of Greek-yogurt-coated items has capitalized on the tremendous popularity of the Greek yogurt dairy market segment,” said Devencenzi. “SunRidge Farms is currently introducing the first USDA-certified-organic Greek yogurt coating available in the U.S., and this will most likely spur further growth for the category.”
IRI data reports sales increases across many of the candy and chocolate categories. Perhaps this is in part to the perennial mass appeal the sweet stuff has to Americans.
“Candy purchasers are not limited in age, locale, or economic condition, because candy is a fun reward with a price point to suit any purchaser,” said Veldman .
According to Veldman, a diverse set that offers a breadth of favorites will have the most retail success versus a “flavor of the month” trend-based approach. “Traditional favorites remain the core sellers in packaged candy sets, and the assortment should include a cross section of all candy categories,” she said. “Private label programs with the consumer purchaser in mind will contain both branded and unbranded candies in the set.”
Veldman said seasonal extensions work well in private label, because the customer already knows and trusts the store brand.
“Retailers such as convenience stores have a great opportunity for added sales that seasonal will bring,” said Veldman. “A large amount of seasonally themed products are purchased for instant consumption, so placing them in retail settings that may not be a destination point for seasonal purchases is plus sales for the retailer.”
The trends in candy are nothing shocking. IRI reported private label non-chocolate chewy candy to be up more than 10 percent to $212 million, with just about a 5 percent share, showing room for growth (52 weeks ending August 11, 2013).
“Gummies continue to remain at the top of the list in movement, primarily due to traditional sellers such as bears and worms,” said Veldman. “Novelty shapes and flavors in gummies are growing in sales and establishing permanent placements in everyday sets.”
Other trends Veldman sees are actually throwbacks. “Many traditional favorites are seeing new growth as the primary consumer set ages and introduces younger consumers to familiar products,” she said. “It doesn’t have to be ‘new’ to be introduced to new consumers.”
Premium chocolate is making a mark on the U.S. retail landscape, according to Leslie Sabino, manager, global business development, beverages/candy/cereal for Daymon Worldwide.
“Dark, milk, and even white chocolate are engaging the consumer, with interesting flavor combinations from nuts and fruits to seeds and fillings,” said Sabino. “The consumer’s palate has grown more sophisticated, and retail is taking advantage of new opportunities. Caramels—of all kinds, but especially chocolate caramels—are dominating consumer attention today. This flavor is found not just in candy, but across categories such as desserts, ice cream, cereal, cereal bars, coffee, nuts, snacks, etc.”
Beyond new flavor trends, repackaging in snacks has been abundant.
Topco’s Old Fashioned Kettle Chips under its Full Circle brand have recently been repackaged in 100 percent compostable bags made from plants. The tan bags run nutrition information on front of pack (FOP), along with a callout for their eco-friendly efforts. The kettle chips come in such flavors as Original, Salt and Vinegar, Salt and Pepper, and BBQ.
“Packaging design and materials should flow from the consumer target and the brand the retailer is trying to build,” said Hyland. “If you have a premium or natural brand, then you should pursue higher-end functionality and appearance for the product with things such as reclosability, thicker packaging stock, or recyclability. For a mainstream brand, you would want to match something closer to what the largest mainstream national brand in the category is using.”
Cultivating character on packaging can do much to build brand identity. The previous packaging for Roundy’s salty snacks had a uniform look that depended on changes in fonts to identify individual groupings (chips, pretzels, tortillas, or popcorn). As seen on Daymon Design’s website, the company restyled the entire snack line with livelier, edgier, brighter graphics, and added personality to each subgroup. For example, the potato chip bags now have individual illustrated characters for each ﬂavor, while the popcorn makes sound use of a transparent section on the packaging so consumers can see the product. The Roundy’s logo is used consistently on all products to unify the line.
“Retailers should have the same branding and design elements across similar segments of salty snacks,” said Hyland. “For example, mainstream-type salty snacks should all have one unified brand and one unified design look and feel, while perhaps a salty snacks line of natural and organic items would have a different brand/design. At the same time, different varieties within a segment need to clearly designate the different flavors (e.g., regular, sour cream & onion, and barbecue variety potato chips) clearly, so that the consumer can easily find the variety they are seeking.”
Safeway launched its new The Snack Artist line of salty snacks in late 2010. The playful packaging features resealable bags and clever names such as “Mariácheese” for nacho cheese tortilla chips. This year, Safeway redesigned the packaging, replacing the tan background with bright-yellow, increasing “The Snack Artist” brand text in size, and reducing the quirky product illustrations in size (which now look as if they were doodled on a white napkin).
Resealable packages are important in multiple snack and candy categories.
“They are easy to ‘take along’ and keep the product shelf stable and fresh,” said Veldman. “A new package type that we are seeing take off is something we call ‘on the go cups,’ which are designed to fit in a car cup holder. It is easy to open and close, and keeps snacks ‘at the ready’ while travelling or commuting.”
Many new product introductions, including nuts, are being launched in stand-up resealable bags, according to Veldman.
“Great graphics are also mainstream in nuts and snacks today,” said Veldman. “Store brands are gaining more shelf presence with this pack type and graphic punch.”
The preferred packaging type preference for yogurt-covered snacks is zip-top, resealable pouches, according to Devencenzi.
In packaging for candy, Veldman sees a lot of growth opportunity in resealable bags, as consumers want to enjoy the fun of candy, but sometimes just not all at once.
“Typically retail price points drive the everyday set assortments, with multiple purchases for a better cost versus a single purchase as the predominant strategy,” Veldman further explained. “Higher single-unit price points with value-added attributes, such as a resealable container, are continuing to gain shelf space, as well.”
Gusseted bag or pouch packaging is a category driver, according to Sabino. “This packaging form was made popular as the national brands (Hershey, Nestlé, and Mars) came out with their legacy brands in shareable-size bags,” she said. “This expanded the category and drove consumption of candy, exploiting the social aspect of candy consumption. Private brand was a fast follower, and many retailers have driven successful innovation in their private brand candy program with this packaging segment. Take, for example, the popularity and explosive growth of Walgreens Nice! and Delish programs.”
Sabino added that tub packaging is also very successful, and has been a driver behind best-in-class retailers such as Trader Joe’s and Whole Foods Market.
“Tub packaging comes in several sizes, as well as pegable, and is stackable to display almost anywhere throughout the store,” said Sabino. “No longer just for the alternative grocer, tub programs are very present across grocery, convenience, drug, and other channels.”
No matter what the snack, Hyland advises that, ideally, retailers should display private brand snacks together as a “brand block” to help create a destination for their consumers.
“This is typically done when retailers have very developed private brand programs and a loyal consumer following,” he said.
“For retailers with a less-developed private brand program,” Hyland continued, “placing private brand items next to their comparable branded items makes the most sense to better introduce the retailers’ consumers to the private brand option. Traditional merchandising display vehicles such as end caps, shippers, racks, etc. are also very helpful to build awareness and trial of private brand snacks.”
And don’t forget social-media promotions.
“For major new brand launches, we have seen aggressive spending in blogger sampling and other social-media awareness-building initiatives, as well as aggressive in-store merchandising, including trial-size pack displays, end caps, BOGOs, etc.,” said Hyland.
Where retailers display their private label candy will make a difference as well.
“Finding the right balance of space devoted to store brands while continuing to sell branded products is key to the success of the set overall,” Veldman advised.
“Candy should be displayed throughout the store, not just in the candy aisle,” advised Sabino. “The national brands have known this, and have been pushing for execution outside the aisle for more than a decade simply because consumers avoid the candy aisle. The fact that candy is no longer just for special occasions or holidays helps get secondary, and even tertiary, display elsewhere. It is indisputable that the category is impulse-driven, and displaying candy throughout the store is the best way to generate impulse purchases and drive excitement/traffic. Most people think of checkout and floral as the two most-obvious locations, to leverage gift-giving opportunities, but placing candy programs in produce, deli, bakery, store lobby, end caps, cooler doors, electronics departments, movie rental, and checkout is also effective.”
For retailers who haven’t established a private label candy program yet, Veldman recommends partnering with a supplier who will develop the program with the customer’s best sales opportunities in mind.
“Some suppliers will only offer items they manufacture for inclusion in a private label line,” said Veldman. “A private label program should be designed to maximize the selling opportunity that each peg or shelf space offers, and be representative of the overall store brand image. A combination of general-line candies with certain branded ‘workhorse’ products is the best mix for the set. The top private label packagers will offer what sells best overall, without a self-serving agenda of pushing only what they manufacture.”
For those who have a private label program in place, redesign is often key to keeping a private brand candy program contemporary and exciting, advised Sabino. “Packaging design and format is the personality of the program,” she said. “Big and small, across channels, it will be difficult not to find a retailer that hasn’t engaged in redesign in the last two years.”
Retailer-led R&D—whether outright manufacturing or simply developing unique specifications for a manufacturing partner—is the true leading edge today. “Development is where the retailer can take their program to the next level,” said Sabino. “The retailer can enter a segment of candy (chocolate vs. non-chocolate) or a packaging form (gusseted bag, vs. tub or platter) that they haven’t been in yet. This can engage the consumer, generate excitement and traffic, and stir market share within their rest of market.”