Snacks That Stack Up
Retailers that ramp up marketing efforts for store brand cookies and crackers could capitalize on impulse purchasing.
Whether the occasion is game time, party time or just snack time, a tasty cracker or a decadent cookie often is the go-to munching choice. Among the largest of today's consumer packaged goods categories, the cracker and cookie segments also are mature categories, making continuing strong growth challenging. In addition, attempts to increase store brand market share have proved an uphill battle for retailers in the face of heavy marketing and promotion by the name brands.
Cracker crunch
According to "Crackers — US," a 2011 report from global market research firm Mintel International, "whole grain" and "all-natural" product claims have become more common among U.S. cracker launches. Roughly half of respondents surveyed by Mintel who buy crackers indicated that overall healthfulness is an important consideration during purchase. Low/no positioning claims such as no trans fat and low fat, low/no cholesterol are among the most popular.
More niche claims such as "organic" and "gluten free," however, were deemed important by far fewer respondents, Mintel says. In general, healthful claims are more likely to be considered by women, who might feel responsible for the health of their household.
Placing an emphasis on health and the quality of ingredients is one trend that is expected to continue — and one that retailers could pursue as a means to differentiate their products.
All-natural crackers and flatbreads are the cornerstone of Hingham, Mass.-based Venus Wafers' offerings. James R. Anderko, national sales manager for the company, says Venus recently introduced vegan and non-GMO cracker options. The rigorous testing required goes beyond that required for organic certification, he adds.
Higher ingredient quality and more stringent production practices can help make store brand cracker options stand out. But retailers could look into adding more variety to their repertoire as well.
"Niche subcategories like flatbreads are growing and becoming more popular," Anderko explains.
Flatbreads and similar cracker options are getting attention for their versatility — they can be eaten alone or served with toppings — as well as their elegant flavors such as rosemary and sesame.
As for cracker packaging, the larger category remains unchanged — with national brand formats such as bag-in-box, tray-in-box and tray overfilm remaining the standards, Anderko says. Still, quality packaging that also adequately protects delicate crackers from crumbling is critical for store brand items if retailers want to boost the probability of purchase — and repeat purchase.
Speaking of boosting the probability of purchase retailers could take a page from the national brands when it comes to promotional activity.
"A lack of promotion and merchandising support are among some of the biggest mistakes made in terms of store brand strategy within the segment," Anderko says. "You're not selling by price alone, so be visible and promote your store brands."
For example, retailers could increase the number of tie-ins with other private label options centered on similar themes such as snacking or a party or other celebration. And in-store sampling is another way to build opportunity for impulse purchases as well.
Do emphasize store brand cracker products' health positives and quality of ingredients to differentiate them from the competition.
Don't miss out on opportunities to cross-merchandise store brand crackers with cheese and other snacking and entertaining complements.
Do consider marketing some popular store brand cookie varieties in individually wrapped packages to attract impulse purchases.
Cookie time
On the cookie side, the down economy has spurred a slowdown in growth. But the cookie category is nothing if not resilient.
"As the economy goes, so does the cookie category," offers David H. Tuthill, director of sales and marketing for Traditional Baking Inc., Bloomington, Calif. "The value segment will continue growing — the premium segment, as a percent, will increase the new offerings, and the mainline items will be flat."
When it comes to cookie purchases, taste often trumps health. According to Mintel's most recent "Cookies and Cookie Bars — US" report, U.S. consumers generally prefer cookies that are indulgent versus ones that are labeled as "healthy." Despite this fact, a market for more healthful varieties does exist and is growing. And retailers should jump right in with their own brands.
"There have been many requests for premium store brand products and offerings with a more fruity/nutty profile, which presents a perceived healthier product," Tuthill says.
Packaging for the category also is changing shape. Gable-top boxes or stand-up gusseted bags that are used to distinguish between the premium products and the "me too" products or value products are being reevaluated, Tuthill says. Some companies are opting instead for a basic, non-busy design and a more "retro" look.
Just like with crackers, some of the best store brand opportunities within the cookies segment center on impulse buying. For that reason, retailers would be wise to market some store brand cookie options, including the ever-popular chocolate chip cookie, in individually wrapped packages, says Richard A. Alimenti, CEO of Original Gourmet Food Co., Salem, N.H. Tuthill agrees.
Look what's new
World Table Garlic Entertainer Crackers from Bentonville, Ark.-based Walmart are oven-baked and said to have the subtle flavor of garlic. They are touted as partnering perfectly with appetizers and cheeses. A product of Canada, the cracker offering retails in a 7.0-oz. box.
New from Costco Wholesale, Issaquah, Wash., are Kirkland Signature European Cookies with Belgian Chocolate. Billed as "ultra-luxurious," the assortment of 15 different types of cookies is said to be made with high-quality ingredients and include a minimum of 49 percent chocolate. It retails in a 49.4-oz. tin.
Savoritz Garlic & Chive Pita Crackers from Batavia, Ill.-based ALDI Inc. > are said to be new and improved. The baked pita crackers are "seasoned delicately" with garlic and chives and contain no cholesterol or artificial colors or flavors. They retail in a 5-oz. recyclable box.
Source: Mintel's Global New Products Database
"Two-pack or single-pack soft cookies are taking off for convenience stores," he explains, "and grocers could capture extra sales on these higher-margin impulse items."
On the promotion side, retailers might want to tweak their approach to maximize impact.
"Multi-segment promotions have been the latest branded strategy over the past year, with some retailers continuing to do quarterly store brand events," says Tuthill. "The shotgun approach has lost its appeal. I believe retailers would get better bang for their buck by using a more targeted approach."
Don't forget that although product development opportunities can be found in fruity and nutty-type offerings, indulgence trumps health on the cookie side.