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Battered by the nation’s troubled economy, consumers are tightening their spending habits when it comes to many food purchases, and while shoppers are seeking the best value and are more disciplined in their buying decisions, snack food products continue to do well.
Those are some of the key conclusions from the “Snack Food State of the Industry” report presented by Sally Lyons Wyatt, SVP at Chicago-based Information Resources, Inc., at the Snack Food Association’s annual convention, SNAXPO 2010, in Fort Worth, Texas.
Lyons said IRI’s consumer surveys indicate that 86 percent of buying decisions are made at home as shoppers prepare their lists, and she advised snack manufacturers to find ways to reach consumers there before they ever leave for the store. Consumers, she said, are spending more time than ever preparing for their grocery shopping trips, often specifying brands when they make their lists.
“So you want to be on those lists,” she advised snack manufacturers in the audience. “You need to find ways to reach consumers in their homes, and then, of course, again in the store.
“Eighty percent of consumers are looking for the best value when they buy snacks,” Wyatt said, emphasizing that “value” involves more than price — although that is a dominant concern. It also includes such factors as trust in the brand, taste and convenience.
While salty snack volume sales were flat during 2009, dollar sales grew by 7 percent as a result of price increases that were implemented by many companies, the IRI data showed. Meat snack dollar sales also grew 7 percent. The grocery channel increased its volume of snack sales by 0.6 percent, with revenue up by 3 percent. Grocery gained in 74 percent of the snack category, Wyatt reported, compared with a similar decline at Walmart.
When consumers shop for snacks, 66 percent look for their favorite brands, while 43 percent go after their favorite brands on sale. Private label has made gains, she said, as quality and marketing have improved in recent years to take advantage of consumers’ need to save, and that behavior is likely to remain in instances where shoppers have discovered private label products they like and that meet their needs.
Snacks are an important part of healthy eating plans for many consumers, as 32 percent consume snacks as mini-meals throughout the day, according to her report. Still, 60 percent eat snacks purely for enjoyment.
Healthier snack products continue to gain, Wyatt noted, increasing by 3 percent in 2009 over the previous year, and up by 8 percent since 2005. In fact, 83 percent of consumers eat snacks for their nutritional benefit, and 40 percent seek benefits beyond basic nutrition. Eighty percent said they’re trying to save on medical bills by staying healthy.
While many consumers seek products that have less sodium and are perceived as more healthy, taste is still king, Wyatt stressed. “If it doesn’t taste good, it is not going to win,” she said.
Darren Seifer, a food and beverage analyst with The NPD Group in Port Washington, N.Y., told SNAXPO attendees that many consumers, faced with the need to tighten spending, have turned to private label products, including snacks, to help save money.
Seifer told an educational session audience on the SNAXPO show floor that 70 percent of consumers surveyed said private label products are either excellent or very good, and that 80 percent select them because they cost less.
Private label snacks are consumed 81 percent of the time at home, he said, adding that 55 percent are purchased at the grocery store, while 21 percent are purchased at mass merchandiser outlets, including Walmart.
He pointed out that Americans older than 55 years of age are consuming more snack products, including private label, than those in younger age groups, but at the same time are increasingly concerned about health — particularly as it relates to sodium content.
Increasingly snacking takes place more frequently in the morning and afternoon, compared to the evening hours, Seifer said. “It behooves you to innovate around your category,” he noted
Seifer also advised brand manufacturers not to engage in price-cutting with private label competitors. “Avoid a price war,” he said. “This will only serve to erode long-term margins. Let them have their way.”
The SNAXPO show featured a tasting area where manufacturers offered dozens of new products designed to capture consumers’ interest and capitalizing on the latest trends. Prominent among those products were full-flavored (read: “spicy”) snacks, many of them geared toward Hispanic consumers, as well as those with healthier profiles: baked, lower-fat and lower in sodium.
Among the spicy and full-flavored products were Cheddar Horseradish Kettle Cooked Potato Chips from Herr’s, Wise “Hot Chips ” and Wise Jalepeno Cheddar Corn Snacks, Snack Friez Hot-Hot-Hot corn and potato snacks, and Blazin’ Chipotle Baked Curls from Mike-Sells Potato Chip Co.
Some of the new healthier products promoted in the new product-tasting area included Plantain Pacific Seat Salt Chips from E.C. Snacks; Shearers Foods, Inc. Whole Grain Chips with 189 grams of whole grain in every serving; and a line of baked “crisps” from Herr’s that included Original, Sour Cream & Onion, Cheddar & Sour Cream, and Barbecue varieties.