Snack category innovations help carry sales

Drug Store News, Sept 8, 2008 by Barbara White-sax

Higher costs will no doubt affect snack sales this year, but industry experts said there's still market potential for innovative new products and healthy offerings.

"There have been a lot of successful new introductions," said Sheila McCusker, editor of Information Resources Inc.'s Times & Trends research reports. While newness can help products make a splash in the market, McCusker said consumers will still be watching prices carefully when shopping all grocery categories. "Innovation is critical, but affordable price points will be absolutely critical as well," she said.

Innovation frequently means better-for-you snacks. "Consumers still care about good health when it comes to snacking," McCusker said. "Healthy, better-for-you products have been starting to show a return," said Jim McCarthy, president of the Snack Food Association.

"Baked potato chips have been very well received of late," he added. "These products have been on the market for years, but we are just starting to see the promise." Since potato chips represent $2.6 billion of snack category sales, products with lower saturated fat profiles can continue to buoy the segment.

"Frito-Lay has been on the forefront of removing trans-fats from their products and replacing them with healthier oils, such as sunflower oil," McCarthy said. Snyder's of Hanover recently introduced sunflower chips made with sunflower seeds and cooked in sunflower oil.

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"Low or no salt products are gaining popularity," McCarthy said. Frito-Lay recently introduced Pinch of Salt, a lower sodium line of products within the Lay's Tostitos, Fritos and Ruffles brands.

"Utz Snack Co. has done well with its no-salt products, and Frito-Lay has gained share in that segment, as well," he said.

Whole grain products--and popcorn--are other areas of growth as consumers look for products with better nutritional profiles. "Everyone has turned the heat on the whole grain side of the business. It's a segment that has really taken off," McCarthy said. "Per serving, these whole grain products deliver more nutrients." He cited Herr's as one manufacturer doing a lot with whole-grain pretzels in such flavors as pumpernickel rye and honey wheat.

As a segment, nuts also continues to grow. "We should expect to see more snack mixes with positive benefits," McCarthy said. Kraft has had success with its Planters NUTrition brand of snack nuts specifically blended to meet nutrition and wellness needs. "It's been a revelation that no two fats are alike, and there can be benefits to certain fats," McCarthy said.