Poised For Growth

Whether they accompany a ham sandwich in a school lunchbox or fill a communal bowl on family movie night, salty snacks are a fixture in many North American households. But despite their widespread popularity, salty snacks have hit a slowdown in terms of growth.

However, in its March 2012 "Category Insights: Salty Snacks, Meat Snacks & Popcorn," global market research firm Mintel points to strong category growth between 2006 and 2010 and suggests the slowdown is only temporary.

Healthful Spin

Mintel notes that flavor, a trusted brand/quality and price remain the most important factors driving consumer decision-making within North America, but healthful attributes also play a substantial role.

Of particular interest are ancient grains and seeds such as quinoa, flax and chia seed, which are not only gluten-free, but also rich in key vitamins and minerals, Mintel says. And whole-grain chips are attracting the attention of consumers, especially women.

"We're making a lot of the healthier products, the rice and bean-type products," notes Chris Jayne, senior director of sales for private brand at Inventure Foods, Phoenix, adding that the sweet potato is another hot ingredient.

Also of growing interest to consumers are healthful spices such as cinnamon and rosemary, notes Randy Johnson, vice president of sales and marketing for Perham, Minn.-based KLN Family Brands.

But trends on the health side are not centered solely on the ingredients included in salty snacks. The ingredients excluded also count to today's consumers.

"Probably the biggest thing I'm getting asked for right now is seasoning with no MSG," Jayne says, adding that sodium reduction also is on trend.

And Scott Carpenter, president of The Bachman Co., Wyomissing, Pa., says consumers generally are looking for clean, easy-to-read labels.

"As consumers become more educated in nutrition, they are turning the bag over and reading the ingredient panel," he notes.

Do consider using healthful ingredients such as whole grains, ancient grains and seeds in new store brand offerings.

Don't be afraid to get creative when it comes to combining flavors and ingredients.

Focus on flavor trends

On the store brand side, retailers also will need to pay close attention to flavor trends — especially if they aim to differentiate themselves through innovative products.

Here, Johnson points to a trend toward unique and ethnic-inspired flavors such as sweet Thai chili and Picosita Ardiente.

Ralph Arruzza, director of national accounts/ new business development for Marion, Ohio-based Wyandot Snacks, agrees, explaining that the rising popularity of ethnic flavors here reflects the United States' population diversity and influences. But old-fashioned American favorites such as ketchup and barbecue flavors are a draw, too, within the segment.

And when it comes to pork rinds and cracklins, truly authentic Hispanic flavors boast appeal, says Mark Singleton, vice president, sales and marketing for Lima, Ohio-based Rudolph Foods. He notes that his company's chile limon flavor is a big draw.

"If you really are a student of Hispanic cuisine, you know blazing hot is not the ideal," he explains. "Complex and spicy, interesting, with different fruit notes along with different spice notes — that's Hispanic."

Unexpected combinations of flavors and/or ingredients also add interest to a product. Jayne says his company is looking at a number of different inclusions for salty snacks.

"People want new, interesting combinations of snacks, combos they haven't seen or even heard of before," adds Eric Thier, cofounder and president of Oogie's Snacks, Denver.

And when it comes to potato chip styles, kettle chips still are in growth mode, notes Jeff Binczyk, vice president of marketing and shopper insights for Shearer's Foods, Brewster, Ohio.

"Store brand kettle chips are under-developed and offer an excellent sales and profit opportunity for retailers," he says.

Upgrade the package

As many retailers work toward creating a true brand within the salty snack category, they have been giving packaging an upgrade.

"Current packaging trends include matte film, eye-catching high-resolution graphics, and extended shelf life," Carpenter offers. "With advances in packaging, retailers can extend their products' shelf life naturally. This decreases stales and increases profits."

Johnson also notes trends toward "greener" compostable/biodegradable packaging and resealable packaging.

But although resealable packaging could be a differentiator for retailers, it is fairly costly, Jayne maintains, noting that the national brands really haven't gone there yet.

Although convenience is a benefit of portion control packaging, it comes at a premium, notes Darryl Thomas, senior vice president, sales and marketing for Herr Foods, Nottingham, Pa.

"There's higher labor costs; it's less efficient in packaging and [brings] higher packaging costs," he says. "I think with the economy that we've been seeing in the last couple of years, there's been a softening in demand."

Portion control is a permanent trend and remains important, but is not the main contributor to the store brand segment, Carpenter says.

"What is most important in the private label category is for retailers to provide a high-quality, unique product that is priced right," he adds.

Still, retailers could leverage the portion-control trend by "offering smaller multipacks and clearly stating the calorie and fat content so consumers are well-informed," says Jeff Roberts, marketing manager for City of Industry, Calif.-based Snak King Corp.

Do give store brand salty snacks their fair share of shelf and display space.

Don't pass up the opportunity to cross-merchandise pork rinds with other Hispanic meal ingredients.

Show it off

Store brands still account for a miniscule share of the enormous salty snacks segment. To grow share here, retailers would be wise to step up merchandising, marketing and promotional efforts.

Binczyk contends that salty snack merchandising represents an uptapped opportunity for retailers. He says Shearer's has a "menu of options" to fit retailers' specific merchandising needs.

"Allowing more shelf space to the store brands is important," Roberts adds. "Typically, the national brands have excess space, resulting in multiple facings of the same product."

Because the salty snack category is driven largely by impulse purchases, displays and merchandising are critical, Carpenter says.

"The single most effective move retailers can make is to allocate prominent merchandising locations for their brand," he contends, adding that coupons and cross-promotions also work to boost sales.

Speaking of cross-promotions, because Hispanics use pork rinds as a meal ingredient, Singleton advises cross-merchandising them with other ingredients going into such meals.

And consider merchandising store brand salty snack items on end caps, at checkouts and with products in other departments to give store brand salty snacks additional exposure and meet the needs of "quick stop" and "in and out" customers, Arruzza advises.

Roberts also believes retailers should be doing more in the way of product sampling.

Thier agrees.

"There's no substitution for sampling and demoing, particularly if you have a quality product that will quickly make fans," he stresses.

Sample-size packs also work well to entice trial of new store brand salty snacks, Jayne notes.

"Typically, when you're doing a trial size, it should be under a buck," he says. "Either four for $1 or two for $1 — it's a simple strategy, but it works well."

Look what's new

Central Market Organics Red Quinoa & Flaxseed Tortilla Chips with Sea Salt from San Antonio-based H-E-B are said to be made from organically grown corn. They also contain flaxseed, which offers omega-3 fatty acids, and quinoa, which gives the chips a slightly sweet, nutty flavor. This kosher product retails in a 12-oz. bag featuring the Non GMO Project Verified logo.

Described as extra crunchy and exploding with gourmet flavor, Sensations by Compliments Balsamic Vinegar & Sweet Onion Flavoured Kettle Cooked Potato Chips from Stellarton, Nova Scotia-based Sobeys feature hand-selected potatoes that are sliced thickly for maximum crunch, then slow-cooked in pure sunflower oil. They are enhanced with balsamic vinegar, onion, brown sugar and real sea salt. The kosher certified chips retail in a 220g bag.

Source: Mintel's Global New Products Database