Snacks Report: Small bites, big profits
Snacks, no longer a frowned-upon treat between meals, are so popular now that consumers are snacking instead of eating full meals. As schedules fill up and days become more hectic, people are turning to snack mixes, nuts, jerky and other quick bites. Market research firm Packaged Facts forecasts the U.S. salty snacks market will exceed $29 billion in 2022. For private brands, the category carries big potential. Not only are people snacking more, but they are not looking solely for branded items.
“It’s a great time for retailers to leverage snack trends to boost private label sales,” said Lisa Smith, senior marketing communications manager for Charlotte, N.C.-based Truly Good Foods. Smith added that among the current snack trends are big flavors, spicy sweet hybrids, and ingredients with added benefits, such as the mood-boosting ingredients in the company’s ReCharge snack mixes.
Smith recommended retailers add one to two new flavors to existing private label lines. “It’s a great way to keep your customer base excited and engaged, while remaining loyal to your private label brand.”
Others agreed that flavor blends are on-trend right now. “Brands are being more innovative with product, so there is a trend in cross-pollinating new popular flavors to make interesting and unexpected combinations,” said Braden Bennie, senior marketing manager of TH Foods, based in Loves Park, Ill.
Grain-free is still a big trend, and Bennie predicted that the next big flour will be cassava flour, which contains several nutrients. Cassava is a key ingredient in TH Foods’ new line of Crunchmaster Grain-Free crackers. The company is developing grain-free platforms for retailers who want to keep these health-minded consumers in the stores. “The more positive experiences consumers have with a private label brand, the higher probability they will repeat more frequently and across categories,” Bennie said.
Other manufacturers agreed that store brands are important for attracting repeat customers. “In private label if you disenfranchise a customer you’re not going to get them back,” said Christie Frazier-Coleman, vice president of sales and marketing with Lehi Valley Trading Co., based in Mesa, Ariz. “There are too many other brand options or other private label options in other retailers.”
One way to keep these customers is to offer tiers of store brand snacks, including less expensive bulk items, healthier items, and more upscale indulgent items. “We’re seeing private label dig deeper into segments in different categories and different decision points,” Frazier-Coleman said.
Premium is one of the growing segments. According to a Nielsen report, “The Rise of Premium Private Label and its Impact on Discount Retailers,” 44% of surveyed Americans say they would pay the same or more for the right store branded product, while only 26% of those surveyed felt that name brands are worth the extra price.
Retailers work with manufacturers that create their own brands and also help develop store brands. “They do want a partner in innovation,” said John Larsen, president and own- er of Marathon Ventures, headquartered in Bellevue, Neb. Retailers can try the manufacturer brand first, and if an item takes off, convert it to a store brand. That takes some of the risk out of introducing new snacks.
Nuts continue to be favorite snacks, including peanuts. “They are a great carrier for flavor, and they are budget friendly,” said Krista Daly, director of marketing for Marathon Ventures. The company is working on peanut snacks that have unique flavor profiles and can command a higher price point than the usual salted or unsalted iterations.
GROWING WITH PROTEIN
Nuts provide plant-based protein, itself a hot trend. “You’re seeing a lot with nut butters, things that have that healthier halo,” said Dawn Sykora, vice president of marketing for Mount Franklin Foods in Oakbrook Terrace, Ill. The company launched Nubu nut butter bites in cashews, peanuts and pecans. Also new is Brewhouse Legends pub inspired snack nut mixes in Hoppin’ Chili, Hops Pepper and Michelada. The flavors respond to demand for bold and global flavors.
Meat snacks are having a protein-driven resurgence. “Pork rinds are protein rich and low carb, or zero carb, and even grain free,” said Kevin Allen, director of marketing for Snak King in Los Angeles. “Consumers are also excited to see bold and spicy flavors.” Allen added that non-GMO and organic are also important attributes.
The plant-based trend is also gaining traction. Improved Nature, based near Raleigh, N.C., partnered with Perky Jerky to produce and distribute a vegan, plant-based jerky product under the Perky Jerky name in Whole Foods and online. Rody Hawkins, president and CEO of Improved Nature, said the snack offers the characteristics of beef jerky but is plant-based, clean-label, and non-GMO
“It’s a seamless replacement,” he said. “Plant proteins are not always complete because they don’t always have nonessential amino acids, but our particular soy protein is a complete protein.” One advantage for retailers, Hawkins said, is that soy prices do not fluctuate as much as beef prices, so plant-based jerky can be more profitable.
Manufacturers said the private label snack business will continue to grow, partly driven by snacking itself being a huge trend. “The traditional three-meal concept is becoming more outdated as consumers turn to snacking to get their nutritional boosts throughout the day,” said TH Foods’ Bennie. “Snacking occasions are now becoming the norm as consumers are eating smaller-portioned meals upwards of five times per day.”