Nuts for innovation

Although a number of product categories experienced bleak sales during the economic crisis, sales of dried fruit and nut snacks saw sunnier times. “Category Insight: Nuts, Fruit Snacks and Snack Mixes,” a December 2013 report from Mintel, a global market research firm, states that dried fruit and nuts was one of the few food categories in the United States to thrive during the recession, with sales growing by 36.1 percent to $7.2 billion between 2007 and 2012.

“Mintel forecasts that this growth will continue to 2017,” the report continues, “rising by a further 27.7 percent during that period as the category benefits from its strong health perception and the rapid growth of multicultural groups.”

And private brands have played a large role in the category’s growth. According to the report, store brands accounted for 46 percent of market share in 2011.

“This is also reflected in innovation,” the report says, “with retailers responsible for more than three-quarters of all product launches in 2013, up from 57 percent in 2012.”

Give ‘em their mix fix

A major area of growth in recent years has been trail mixes, the Mintel report states. Although they account for just 7.9 percent of total U.S. nut and dried fruit sales, trail mixes have seen significant growth in both dollar sales and market share in recent years as a wider variety of products hit the market. In fact, trail mix innovation increased by 22 percent in 2013, with brands increasingly innovating around indulgent on-the-go formats.

Looking at the indulgent trend, Alicia LeHota, president of Grove City, Ohio-based Tropical Nut & Fruit Co., says the line between fruit and nut snacks and confections is blurring.

“Salty and sweet are mixing, [and the] chipotle flavor traditionally found in snacks is being blended with chocolate. Do not be afraid to try new combinations of flavors, spices and mixes to delight and engage customers,” she advises retailers.

But retailers might want to think twice before getting too involved on the indulgent end of fruit and nut snack mixes. The Mintel report says a focus on indulgent products could hurt growth in the trail mix subcategory, given consumers’ increasing desire to eat better. Therefore, retailers should seize opportunity by innovating in the better-for-you space.

John Taylor, president and CEO of Texas Star Nut and Food Co., Boerne, Texas, says his retailer customers continue to request healthful natural dried fruit and nut mixes — as well as exotic ones.

Exotic appeals

The Mintel report also points to exotic products as an area of opportunity, especially when it comes to younger consumers.

“Young adults are key consumers of trail mix in the U.S., with 18- to 34-year-olds over-indexing on almost all types of trail mix,” the report states. “These millennials are typically open to a wider variety of exotic flavors and ingredients, encouraging manufacturers to be more experimental in their innovation.”

According to the report, examples of exotic store brand trail mixes that recently hit shelves are 7-Eleven’s 7-Select Santa Fe Style Trail Mix, which comprises peanuts, roasted corn, chili crackers, sesame sticks, chili lemon sticks and pepitas; and CVS/pharmacy’s Gold Emblem Asian Blend Trail Mix, which contains rice crackers, wasabi peas, sesame sticks, peanuts, cashews and almonds.

But don’t assume exotic products appeal only to the millennial generation — they also are critical to winning over Asian and Hispanic consumers, who are an “important target for nuts, fruit snacks and snack mixes,” the report explains. On the store brand side, the report points to Cost Plus World Market’s Chipotle Lime Cashews for Hispanic shoppers and ALDI’s Fusia Asian Trail Mix (rice crackers, peanuts, sesame sticks, wasabi peas, chili crescents, almonds and cashews) for Asian shoppers as examples.

Functional, better-for-you beckon

And don’t forget about functional products. Vincent Grignon, president of Natural Sourcing International LLC, Santa Monica, Calif., notes that in mixes and on their own, superfruits are growing “very fast,” with dried cranberries and goji berries being especially popular.

LeHota notes that she’s seeing opportunities to incorporate chocolate-covered goji berries into mixes.

And Jane Asmar, vice president of sales and marketing with Fowler, Calif.-based National Raisin Co., agrees about the popularity of dried cranberries, noting that they offer retailers the greatest opportunity on the store brand side of the dried fruit category. Their penetration might be modest, but their sales are growing faster than those of their branded counterparts.

Consumer interest in freeze-dried fruit also is growing.

“The freeze-dried process also allows to better preserve the nutrients while keeping a good flavor — the fruits are still 100 percent raw,” Grignon says. “Another explanation to the success of freeze-dried fruits is the fact that the process makes the fruits crunchy, [making them] more unusual and fun to eat as a snack.”

Looking at nuts and mixes containing nuts, salt is a major concern for shoppers, with the Mintel report noting that Asian and Hispanic shoppers, in particular, have a problem with the sodium content of nuts and snack mixes — and are more likely than other consumers to limit the amount of nuts they consume because of high sodium content.

And although “reduced-salt products are available on the market, brands could do more to specifically target innovations at these consumers,” the report explains.

Package, promote to please

And retailers could do more to develop enticing packaging for their own-brand dried fruit and nut snacks. Asmar notes that offering sizes equivalent to those of national brand products helps shoppers compare pricing and understand value. Retailers also should consider packaging that isn’t a knockoff and truly stands out on shelves, LeHota suggests.

“Shoppers have become [savvier] about packaging, marketing and nutritional labeling,” she states. “It is best to build a platform based on quality, consistency and, lastly, price — not build a knockoff.”

Asmar notes that the most successful retailers are using visually pleasing, highly impactful graphics, often with callouts communicating health benefits.

LeHota also sees many retailers using health- and wellness-related callouts on packaging of dried fruit and nut snacks, including “antioxidant blend,” “all-natural” and “heart-healthy.”

Looking at types of packaging, resealable standup pouches do wonders to grab shoppers’ attention, Grignon states. So do windows, which allow shoppers to see the quality of the contents inside. However, he warns against packing freeze-dried fruit in a windowed pouch, as light can affect product quality. In this case, a three-layer bag without a window better preserves contents.

As for merchandising, end caps, shippers and additional placement throughout the store’s perimeter all are critical in introducing items to shoppers who might not browse the snacks aisle, LeHota notes.

“Sampling is good too,” she says. “Allow the shopper to taste the quality of the product and engage them in understanding of the ‘equal to or better than’ commitment of own brand.”

And according to Asmar, retailers that promote during back-to-school, Halloween and other seasons generally maximize category sales.

“Promoting private label prior to the actual event is a great way for consumers to pantry-load,” she offers.