Nut-thing Better Than Private Label

June 15, 2009
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One might think trail mix is enjoyed only on camping trips or in elementary school cafeterias. But fruit and nut snacks also are gaining popularity with consumers who want something sweet and/or salty, but are concerned about their sodium and fat intake.
These consumers have an “increased awareness in pesticides, chemicals and other unhealthy ingredients in conventional snacks,” which has helped boost the category, says Nima Fotovat, general manager at Ontario-based Shandiz Natural Foods.
According to “Market Re-forecasts: Food - US - April 2009” from Mintel International Group Ltd., Chicago, although the struggling economy has weakened the fruit and nut snack category, the category still is growing. After adjusting for inflation, the company forecasts 7 percent growth for the category from 2009 to 2013.
But natural products tend to cost more, and consumers are looking for a better deal - especially in this economy. That’s why private label’s looking so good.
Jeff Vogel, vice president of sales and marketing at Minneapolis-based Amport Foods, points out that before the economy took a nosedive, some retailers carried multiple national brands. Now one only needs to look at store shelves for proof of private label’s increase.
“Many have increased store brand offerings and reduced brand offerings,” Vogel says.

Clearly, private label’s ready for a good, long stay. Data from Information Resources Inc. (IRI), a Chicago-based market research firm, show that overall unit sales for snack nuts/seeds/corn nuts dropped 3.2 percent in the 52 weeks ending March 22, 2009, while unit sales for private label snack nuts/seeds/corn nuts increased 7.1 percent. And unit sales of private label fruit rolls/bars/snacks rose 6.4 percent, and 8.5 percent for private label dried fruit.

Fruits of 'Our Label'

According to Ron Williamson, vice president of sales and marketing with Elgin, Ill.-based John B. Sanfilippo & Son Inc., private label has the opportunity to lead the way in the fruit and nut snack category.
“Fruit and nut trail mixes are some of the fastest-growing items consumed as a snack between lunch and dinner for kids age 6 to 12,” Williamson says. “Store brands should be looking for the flavors and trends that will open the door for new consumers.”
Much like in other categories, these trends revolve around convenience, healthfulness and uniqueness - traits that appeal to all demographics.
Fruit and nut snacks already are associated with convenience. It’s easy to drop a granola bar in a child’s lunchbox, and many gas stations and convenience stores prominently display their fruit and nut snacks for on-the-go enjoyment. And according to Vogel, the prominent one-stop display of fruit and nut snacks is moving beyond the small, roadside gas stations and mini-marts to bring convenience to the full-size retailers.
“We are seeing some leading retailers creating a ‘one-stop shop’ within the store so customers can go to one location for all of their dried fruit, nut, trail mix, natural snack and organic selection,” he observes.
Others suggest merchandising the snacks to attract customers at several locations in the store. Jane Asmar, director of Branded Retail Sales with Fowler, Calif.-based National Raisin Co., says dried fruit, in particular, can be set up in the produce section, where it has the highest sales velocity. It also can be set up near the cash register, where it has “sales synergy when merchandised next to fruit rolls and bars.”
This setup displays the snacks as a healthful alternative to what the customer originally was intending to buy.
Another major plus in terms of convenience is availability. Dried fruits are shelf-stable, and because they’re available year-round, consumers can find them anywhere, anytime and “do not have to worry about the seasonality of the … item,” Williamson says.
“If a food item can be purchased quickly and consumed with minimal effort, that is great,” he adds. “If it is also healthy, that is even better.”
He points out that while 65 percent of Americans say they are trying to eat healthier foods, 33 percent say they don’t have time to prepare or eat healthy meals. But fruits and nuts have a “healthy halo” surrounding them.
“The category has benefitted from the consumer’s desire to eat healthy foods, pay attention to the important or finer things in life, and to become overall a better, healthier person,” Williamson adds.

Dried fruit already is looked at as a healthful snack And according to Mintel’s “Salty Snacks - US - August 2008” report, sales of snack nuts - many of which are seen as healthful and some of which carry a “natural” label - have done better than “good for you” products in other salty snack segments. Snack nuts also are lower in carbohydrates than other salty snacks, a fact that appeals to snackers on a low-carb diet.

Feeling Flavorful

In terms of uniqueness, private label has an opportunity to innovate by creating new flavors not offered by the national brands. Even when one “original” ingredient is added to a typical mix, it can create a unique flavor profile consumers will crave.
According to Mintel’s Global New Products Database, exotic and ethnic flavors - such as soy sauce, curry and taco - can give the snacks a more premium feel, and can help draw in a wider range of consumers, especially younger ones. Mintel also says formulations with a gourmet slant - such as Mediterranean herbs and orange and honey - help increase appeal to older consumers.
Williamson believes store brands should be looking for the flavors and trends that will “open the door” to new consumers. To him, new flavor possibilities are unlimited. He says retailers should avoid making the same old products just because “that’s the way it’s always been done.”
And private label’s leadership opportunity isn’t limited to unique flavors - unique packaging also is important. From single-serve options to multi-serve tubs, products need shelf appeal, as well as their own image, to differentiate themselves from the national brands.
One must for fruit and nut snacks is product visibility. Consumers must notice the product to try it - especially if it’s a new flavor.
“Most of the new … flavors and unique mixes will be impulse purchases,” Williamson says. “Therefore, it is important that the product gain high visibility.”
He adds that many successful packages have a window or a high-resolution photograph of the product.
Asmar says healthful benefits also are important to incorporate into packaging.
“Packaging that includes health call-outs such as ‘no fat’ are easy to implement and are key [to] long-term success,” she points out.
National Raisin works with its customers to make packaging more consumer-centric and engaging by adding health and convenience benefits, Asmar adds. It also adds colorful and fun graphics on items targeted to children and families.
For example, the company introduced the industry’s first single-serve raisin box enhancement: a front-panel flap geared to child-size hands. It also is developing “collect-them-all” collector boxes to further appeal to children and their parents. Developments such as these are important in moving ahead of the national brands to keep customers even after the economy improves, Asmar says.

“Now that more consumers … are searching out the private brand offerings, it is more important than ever to make sure the consumer is satisfied with their purchase from both quality and price [standpoints],” Vogel says. “When the economy turns for the better, there will not be a reason for the consumer to trade back to the brand.” PLB

Sidebar: The Spice Is Right

One look at most retailers’ trail mix and dried fruit selection or nut assortments will reveal a bevy of different flavors from which to choose. But even the plainest peanut/almond/raisin mix can be jazzed up with a tongue-tingling ingredient to boost its appeal. Mintel International Group Ltd., Chicago, agrees - heat can make for an added treat.
According to the company’s Global New Products Database (GNPD), “Consumers are increasingly exposed to global cuisines; tastes have become more adventurous; and hot and spicy flavors are extremely popular in this, as in other snack and confectionary markets.”
The GNPD reports that flavors recently popular in the chips and crisps market - such as Thai sweet chili - now are crossing into the nuts subcategory. Wasabi and curry are two other exotic and ethnic spicy flavors that are appealing to consumers. Wasabi, in particular, is popular, as it has healthy connections with sushi and other Japanese dishes.
Several retailers have spotted the trend and released private label snack mixes incorporating these flavors. Here are some spicy examples:
• Wasabi Wow! from Monrovia, Calif.-based Trader Joe’s. The mix contains almonds, peanuts, dried cranberries and wasabi peas. Also, the retailer’s Lime & Chile Mixed Nuts includes almonds, cashews and peanuts with spicy Tom Yum Seasoning, roasted kaffir lime leaf and roasted whole chili.
• South of the Border Trail Mix from Jacksonville, Fla.-based Winn-Dixie Stores Inc. According to the GNPD, the product is a snack mix containing hot and spicy peanuts, pepitas, corn hot sticks, lemon chili toasted corn nuggets and Cajun sesame hot sticks.

• Chipotle Whole Cashews from Deerfield, Ill.-based Walgreen Corp. The GNPD says the cashews are Chipotle-flavored and trans fat-free.

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