Cater to Cravings

Despite consumer concerns about the lack of health attributes associated with many snacks, sales of salty snacks are strong and could be a positive for retailers’ store brand programs.

Overall, salty snack sales growth was steady during the 52 weeks ending May 17, 2015, according to Information Resources Inc. (IRI) a Chicago-based market research firm. Dollar sales for all brands increased 3.9 percent, while those for store brands jumped 3.0 percent. Unit sales rose 3.1 percent and 1.9 percent, respectively, during the same timeframe.

Mintel, a global market research firm suggests this growth trend won’t be changing anytime soon. According to its January report titled “Salty Snacks — US,” sales in the category increased 15 percent between 2009 and 2014. Mintel projects an additional 21 percent in growth through 2019 “due to increased snacking occasions, continuous product innovation, and affordability and convenience of salty snacks.” Mintel’s report also states that 90 percent of U.S. households purchase salty snacks, and 82 percent of adults purchase salty snacks for their own use.

In its April report titled “Snacking Motivations and Attitudes — US,” Mintel reports that 94 percent of U.S. adults snack at least once daily, and half of adults snack two to three times each day. Sixty-two percent of people snack to satisfy a craving. About a quarter of consumers use snacks to alleviate boredom, Mintel adds, while 16 percent of consumers report snacking to relieve stress.

Make it convenient

While salty snacks are doing well overall, some subcategories, especially those that represent more healthful and more convenient options, have shown especially strong sales growth. Ready-to-eat popcorn and caramel corn, for example, enjoyed a 20.7 percent dollar sales increase overall during the 52 weeks ending May 17, while store brands increased 23.2 percent according to IRI data.

According to Mintel’s “Salty Snacks” report, the popcorn segment has shown the most growth, with dollar sales increasing 21 percent between 2009 and 2014. Mintel expects that growth trend to continue forecasting another 34 percent growth between 2014 and 2019.

“Popcorn thrives off perceptions as a healthy, natural snack as well as its variety of flavors, especially among RTE [ready-to-eat] offerings,” Mintel states.

One-third of respondents in Mintel’s snacking attitudes study, meanwhile, said there are not enough conveniently packaged snacks available. That number jumps to 42 percent in households with children.

Retailers might do well, therefore, by offering healthful snacks in ready-to-eat packaging.

“This highlights a need for manufacturers to make these product formats available to consumers,” the Mintel report says. “However, manufacturers must strike a balance between convenience and affordability, knowing the importance many consumers, especially younger consumers, place on affordable snacks.”

Scott Carpenter, president and CEO of Savor Street Foods in Reading, Pa., says store brands could expand in those areas.

“Multi-packs and convenience ‘on the go’ is still an area where many store brand programs are behind the national brands,” he says.

Mintel adds that brands that market health claims are seeing significant growth, including SkinnyPop, which saw sales rise by 207 percent from 2013 to 2014.

“People are just looking for more healthy ways of eating,” says Anna Moses, director of sales for Ziggy Snack Food in Clifton, N.J.

The perception that certain types of chips are healthier than others also makes a difference in consumers’ buying habits.

For example, Mintel’s January report titled “Chips, Salsas and Dips — US” says potato chips saw nearly $8 billion in sales in 2014, up 5.8 percent over 2012 sales. But sales of tortilla chips, while lower in total, increased by 10.1 percent in that timeframe (to $4.4 billion).

“While some remain concerned about the nutrition and ingredients of these items, consumers also acknowledge there are healthier options on the market,” Mintel says. “Despite these concerns, taste and treating oneself are large purchase drivers, highlighting consumers’ preference for balancing both health and indulgence.”

Moses says she’s also seeing requests for ingredients perceived to be more healthful, particularly Himalayan pink sea salt, which is considered by some to be rich in minerals and have certain health attributes.

“A lot of companies are opting for that salt in lieu of table salt,” Moses says.

Retailers also have the opportunity to promote certain health benefits in relation to store brand items. They could promote popcorn as gluten-free, for example, or could opt to use corn that is not genetically modified.

“If you have a product that can fit in those aisles, that would be good,” Moses says.

Health drivers

A lot of brands still promote no/low-fat options, as well as reduced salt or calories. But Mintel suggests that consumers could be more interested in the overall ingredient list.

“While chips and dips are perceived as indulgent snacks, migration away from processed foods means consumers are likely to buy products with natural ingredients more than those with ‘free-from’ claims,” Mintel states in its “Chips, Salsas and Dips” report.

In a recent Mintel survey, 33 percent of respondents said that “made with natural ingredients” is the most important attribute, while 27 percent said they wanted a product that was “baked, not fried.” Low calories (25 percent), low/no fat (24 percent), low/no salt (23 percent) and low/no cholesterol (19 percent) followed.

“The closer chip, salsa [and] dip brands can come to offering ‘fresher/more natural’ products while continuing to focus on flavor, the more likely they are to grow sales,” the Mintel report states.

However, while consumers say they are interested in healthier options, their purchase behavior doesn’t always reflect that reality. Sales of baked chips under the two leading brands — Baked Lay’s and Baked Ruffles — were down between October 2013 and October 2014, Mintel notes.

“The texture of baked chips on the palate may not compare to fried for many consumers,” Mintel adds. “Brands may want to explore unprocessed or other preparation methods to appeal to consumers’ demanding taste buds.”

Dare to be different

Consumers who crunch on salty snacks might want to do so in moderation, so it’s no surprise that many of them would like packaging that keeps their snacks fresher longer. According to Mintel’s “Chips, Salsa and Dips” report, 73 percent of survey respondents said they wanted packaging that keeps snacks fresh.

Moses also suggests designing packaging that sticks out on a shelf to distinguish store brand items in a category where many packages look the same.

“People love eye-catching packaging,” she says. “Just make sure your label stands out.”

Do consider adding or expanding multipack options.

Don’t ignore consumers’ desire for natural ingredients.

Do leverage ready-to-eat popcorn’s popularity.

Don’t be afraid to differentiate via packaging.