Ripe for Change

Although they certainly couldn’t be called meal staples, cookies and crackers are among the most frequently purchased packaged food items in the United States. According to “Consumer Staples,” a May 2014 report from Toronto-headquartered RBC Capital Partners LLC, cookies and crackers enjoy a household penetration of approximately 94 percent and 92 percent, respectively However, those percentages reflect a slow decline in penetration during the past decade.

That decline could be a result of Americans’ health and wellness concerns. In its June 2014 “Category Insight: Biscuits, Cookies and Crackers” publication, global market research firm Mintel notes that the North American cookie and cracker categories lack health-related innovations in certain areas — such as lower sugar, fat, sodium and calories — despite strong consumer interest.

“Some 66 percent of U.S. cookie buyers and 71 percent of cracker buyers consider health attributes in their purchase decision,” Mintel notes. “There is growth opportunity for two standout healthy ingredients: monk fruit and Greek yogurt.”

Keep store brands in growth mode

Despite the decline in overall household penetration, cookies and crackers have been a recent bright spot on the private brand side. Mintel says U.S. retail sales of private label cookies and crackers increased by 14 percent and 38 percent, respectively, between 2008 and 2013.

“Marketing quality and health and developing flavor and format innovations can help maintain private label momentum,” Mintel adds.

Cleaner labels also could help retailers respond to consumers’ health and wellness concerns.

“Without risking calling a product ‘natural,’ you can at least claim that a given product is free from any artificial color, flavor, preservative, etc.,” says Laurent-Xavier Gilbert, vice president, innovation and marketing for Leclerc Group, Saint-Augustin de-Desmaures, Quebec.

Healthful ingredients, too, could go a long way in conveying the better-for-them message.

“Health focus is the No. 1 trend nowadays in snacks categories, with more concentration on healthy ingredients such as oats, dates, raisins, baked/not fried, gluten-free,” says Mazen Nabulsi, general manager, Signature Snacks LLC, Dubai. “In addition, bite-sized [is] also a trend with cookies and crackers since people find them convenient to snack [on] in the office or on the go, or send small portions with kids to school every day.”

Outside the health and wellness realm, consumers are gravitating toward “higher-quality, better-tasting cookies,” notes Jean Novak, vice president, sales and marketing for Biscomerica Corp., Rialto, Calif.

And on the cracker side, “bigger, bolder” flavors could help retailers meet the trend toward those flavors in the overall salty snacks category, Gilbert says.

Sweet-and-salty combos, too, present an opportunity, according to John Dwyer, senior account manager for World Wide Gourmet Foods Inc., Woodinville, Wash.

“Consumers still want great flavors, but they are shifting away from overly sweet snacks in favor of products with pronounceable ingredients,” he says. “A prime example of this is savory shortbread. We have seen a great deal of interest in savory shortbreads as an alternative to traditional crackers because of that sweet and salty combination.”

Dwyer says retailers also could capitalize on the sweet and salty trend by performing small reformulations on existing products. For example, they could dip store brand macaroons in chocolate or top chocolate-covered graham crackers with sea salt.

Retailers also might want to pay attention to an emerging trend toward savory flavors in cookies.

“Flavors like heat, smoke and spices will make their way into cookies this year as they have already made their way into other categories,” Dwyer says.

Wafers also represent a store brand growth opportunity within certain U.S. regions, Nabulsi says, as do halal-certified cookies and crackers.

New formats, too, could attract consumer interest. Gilbert points to cookie chips, soft-baked breakfast cookies and seasonal programs for wirecut cookies as prime store brand opportunities.

Room for boxes and bags

Great packaging also works to attract shoppers to store brand cookies and crackers. Here, different formats work with different products.

For cookies, “boxes still sell,” Dwyer says. “We see on the higher end of the cookie category a return to bakeshop-style bags, but for the most part, a well-designed box with a highresolution beauty shot of the product is the most consistently preferred by the consumer.”

Matte-finish bags, however, can work to communicate that a cookie product is natural or more healthful, Novak says, and peggable bags can help stimulate sales outside the cookie aisle.

For both cookies and crackers, Nabulsi points to the need for smaller packaging positioned for portion control.

“In addition, multi-pack solutions are growing as decision-makers — moms — are preferring smaller-size portions in multi-packs, which can satisfy the family for the entire week,” he says.

Gilbert agrees with the trend toward portion-control packages, adding that portability is a key part of the strong snacking trend being seen today.

And retailers should not be afraid to get a little creative with own-brand cookie and cracker packaging.

“Cookie and cracker offerings tend to be somewhat one-dimensional,” Gilbert says. “Like any product, original packaging reinforces brand differentiation. I think this is even more important for store brands.”

Encourage impulse buys

Like other items typically centered on snacking occasions, cookies and crackers don’t always get added to consumers’ weekly shopping lists. So anything retailers could do to encourage impulse purchases here will help to grow store brand and category sales.

For cookies, Novak points to “treasure hunt” merchandising, checkout line queue/bin placement, and displays in the produce section, housewares and other non-traditional areas of the store as ways to attract shoppers’ attention and interest.

At the shelf, own-brand cookies and crackers both could benefit from at-shelf signage, too.

“We recommend creating simple shelf-talkers that highlight the flavor profile or the ingredients,” Dwyer says, giving the examples of “Sweet and Salty” and “Simple Ingredients.”

Retail-ready packaging and pre-packed floor displays, too, can help retailers merchandise the products in the aisle, Gilbert says, while in-store sampling could demonstrate the high quality of store brand cookies and crackers.

Retailers also need to position the products more prominently on the shelf.

“Lack of competitive shelf positioning is the No. 1 challenge we see at several retailers,” Gilbert says. “Indeed, merchandising 101 applies even more so to store brands. Position your offering from waist to eye level, and make sure you leverage the national brands’ share of voice by being close to the big guys.”

Do address health and wellness concerns by developing cookies and crackers with cleaner labels.

Don’t miss the chance to encourage impulse buys by merchandising cookies and crackers in multiple areas of the store.

Do consider consumers’ desire for portable portion-controlled snacks when packaging cookies and crackers.

Don’t ignore the trend toward crackers with bigger, bolder flavors.