Nutritious Nibbles

Kathie Canning, Store Brands

1/1/2012

As healthful, value-minded snack options, store brand fruit and nut snacks are ideally situated for continued growth.

When it comes to healthful snack options, it's hard to beat fruit and nut snacks. Dried fruits often contain many essential vitamins and minerals, while nuts can be a good source of protein and heart-healthy fats.

With health and wellness being today's "mega trend," the fruit and nut snack segment is ideally situated for continued growth. And food choices centered on health and wellness are going to grow even more important as more baby boomers reach retirement age, notes Brendan Honan, director of marketing, private brands for John B. Sanfilippo & Son Inc. of Elgin, 111.

Miranda Ackerman, marketing director for Vacaville, Calif.-based Mariani Packing Co., agrees that the segment aligns well with the health and wellness trend, and says many marketers are focusing on the functionality and health benefits of fruit and nut products through packaging and promotions.

But health and wellness is only one of many consumer trends that could wield a positive influence on the segment. Honan says ethnic diversity is resulting in consumer "flavor exploration" — opening up new flavor opportunities for fruit and nut snacks — while hectic lifestyles are creating the need for more grab-and-go snack solutions. Yet another trend, driven by the unsavory economy, is that toward value offerings.

Although the trend toward value offerings bodes well for the store brand side, retailers will find own-brand opportunities among all four trends, Honan maintains.

For her part, Ackerman notes a greater interest in regional-specific and variety-specific products.

And all-natural and ethnic offerings within the space boast strong appeal, adds Vince Garibaldi, vice president of sales for New Century Snacks. Organic offerings, however, are of lesser interest right now, he contends.

See store brands grow

On the fruit snacks side, raisins and cranberries have enjoyed the most growth overall of late, says Jane Asmar, vice president, retail sales and marketing for National Raisin Co., Fowler, Calif.

"But we also see increases with other varieties like mangos, pineapple, apples and peaches, as consumers are embracing the category's variety and its health and wellness image," she notes.

Looking ahead, Asmar sees private label opportunity in national-brand-equivalent (NBE) "core" dried fruit items, as well as in unique sizes and blends.

"The most successful retailers are those that market branded and private label raisins, cranberries and prunes, and private label-only for all other dried fruit offerings like apricots, mixed fruit, berries, etc.," she adds. "No national brand [exists] for these other segments, so the smart retailers are capitalizing on the demand with high-quality, attractively packaged and priced private label offerings."

NBE dried fruit items work well for stores with a more-developed dried fruit category offering, Ackerman acknowledges.

"The success is found in developing complementary branded items, not necessarily removing the branded option for loyal consumers," she says.

But the NBE approach will not work as well for retailers with a less-developed dried fruit offering. These retailers, however, have a big opportunity within the value tier, Ackerman says.

When it comes to store brand opportunities on the nut side, Honan says retailers have the opportunity to adopt successful national brand innovations. But adoption is not as easy as it sounds, he admits.

"Some products' initial success is driven more by

Do

evaluate the repeat purchase rate before adopting a national brand fruit or nut innovation.

Don't

completely cover up the product with its packaging; let the quality shine through.

marketing spend that drives trial, but the product doesn't get strong repeat purchase," he explains. "So repeat [purchase] is a better measure of product success long-term — that's going to be a great candidate for store brands to adopt."

Retailers also need to work with their vendor partners to proactively assess opportunities at the shelf and drive incremental sales, Honan stresses.

Create some excitement

A bit of marketing magic via packaging, merchandising and promotion also goes a long way.

"Target does a great job with their Archer Farms brand," Ackerman offers as an example. "They offer unique blends at affordable prices, and they promote these items as a brand via the traditional media outlets, secondary store placement and social media

Fruit and nut segment performance

marketing, like offering coupons for dried fruits and nut snacks on platforms like shopkick."

In terms of packaging, Honan says retailers should continually assess the need for modernizing it within the space. But Garibaldi cautions against too great an emphasis on the package itself.

"Some retailers focus too much on the package design and not enough on value and quality of the product," he says. "Many times, the design covers up what's in the bag. If you have good quality, let it show and the consumer will respond."

Within the store, both dried fruit and nuts cross-merchandise well with items within the produce department — and specific varieties also make great cross-merchandising partners for baking ingredients. And seasonal holidays and events open up numerous promotional opportunities.

"Promote the [dried fruit] category strategically throughout the year," Asmar advises. "Dried fruit is mostly impulse-oriented, so display activity will generate incremental sales. For prunes, which tend to be more of a planned purchase, price points should drive higher incremental bumps than displays."

But retailers should think beyond tried-and-true merchandising and promotion strategies to grow sales of store brand offerings. For example, a bit of consumer education could help boost sales of both store brands and the entire category.

"Educating consumers on product usage is one of the best ways to help grow dried fruit and nut sales," Ackerman emphasizes. "By providing consumers with ideas and solutions, you can increase consumption as products become a part of everyday snacking or in-home meal preparation."

Retailers also could educate consumers when it comes to the health benefits of nuts. According to "Fruit, Nut & Snack Mixes," a November 2011 category insight publication from global market research firm Mintel International, almost half (44 percent) of consumers believe nuts are unhealthful, even though four-fifths (79 percent) agree they are a good source of protein.

To better appeal to consumers concerned about nuts' fat content, Mintel says marketers should clearly highlight the health advantages of such products,