Better-for-you snacking continues to see infusions of innovation
Americans are obsessed with snacking. Salty snacks, savory snacks, jerky, nuts, bars, cookies — the list goes on and on. And, as study after study has found, consumers increasingly are not only in love with snacks, oftentimes they are choosing them instead of having a sit-down meal.
In fact, research from Mintel shows some 90% of U.S. consumers eat at least one snack a day, with millennials consuming far more. As snacking occasions have risen, so too have the number of options available to consumers. While a wide variety of traditional choices still can be found, retailers increasingly are stocking shelves with better-for-you options. Many of these so-called, alternative snacks feature limited ingredient profiles and are plant- or vegetable-based.
According to Expo East officials, the number of companies producing better-for-you snacks is on the rise, and many of them will be exhibiting at this month’s show at the Baltimore Convention Center. One of the fastest-growing subsegments in the category is nutritional snacking, organizers said. Carrie Kocik, a spokesperson for New Hope Network, said the snack category is benefitting from the larger consumer trend related to healthy eating and better nutrition. Better-for-you snacks are attractive because they offer consumers a portable and convenient way to eat healthier, she said.
With sweet snacks, consumers are scrutinizing the amount of sugar they are consuming and becoming more aware of how much is embedded in the products they eat. Kocik predicted that as this continues to grow in importance, more companies would look to minimize the added sugar they include and start considering such natural sweeteners as maple syrup, honey and dates.
So, what is driving this interest in healthier snacking? Market researchers found that interest in grain-free and paleo dieting are two key contributors. According to the just-released “State of the Natural Industry” report from SPINS, which looked at data collected during the last three years — from the 52 weeks ended May 21, 2017, to the 52 weeks ended May 19, 2019 — paleo-positioned products grew by 45.3% to $537 million and grain-free products increased 76% to $272 million.
While double-digit gains were seen across all channels, growth was faster in conventional outlets, which the report authors said was an indicator of the trend’s power and continued opportunity in the mainstream. Paleo’s profound impact is highly visible in the chips, pretzels and snacks category, where paleo-positioned products are up 164% to $41 million and grain-free snacks are up 258% to $30 million.
In looking at these changes in shopper behavior, Joseph Serventi, CEO of Plainview, N.Y.-based Hippeas, said consumers are shying away from products offering empty calories and are pushing to have more snacks with substance introduced, particularly ones that are vegan and plant-based. “People are looking for organic, gluten-free and plant-based snacks with superior and clean nutritional profiles,” he said. Given the rise in the number of people with food allergies, Serventi sees an opportunity for snack companies to introduce more allergen-friendly options.
Less is More
While it is true that consumers increasingly look to snacks for their nutritional benefits, others are looking for clean and simple ingredient profiles. Ken Cross, chief marketing officer at Voortman Bakery in Burlington, Ontario, Canada, said consumers are seeking snack products with real ingredients, including fruits, vegetables and all-natural flavors. Interest in better-for-you products has been so extreme, Cross said the company has had to install an entire new line in its bakery to keep up with the demand.
The interest in all things simple also extends to nutritional bars. Brooklyn, N.Y.-based Freedom Bar was founded with just this concept in mind. According to CEO Saul Nadoff, when he created his company, the goal was to offer an all-natural bar that could be eaten by most consumers, with or without dietary restrictions.
Through an arduous research and development process, he has created a limited-
ingredient bar that is non-GMO, vegan and kosher, and is free of gluten, dairy, soy and added sugar. Featuring just 4 to 6 ingredients, the bars are ideal for anyone with strict dietary needs, but also appeal to those looking for a healthy snack.
Nadoff said in looking at other bar options on the market, he found many so-called health bars with highly processed ingredients and unnecessary sugar. “People are tired of trusting brands only to find they have been lied to,” he said. To be as transparent as possible, the company lists the products’ features clearly on the front of the package, with images of each ingredient in the bar.
“It is such a good feeling to know you created something that helps people who follow restrictive diets, and, at the same time, people who are looking for healthy alternative snacks are attracted to our bars too,” he said.
Given that salty snacks are one of the largest dollar contributors to the category, it is not surprising that companies in the segment are offering better-for-you options. For the past several years, Hanover, Pa.-based Utz Quality Foods has quietly been expanding its better-for-you snack portfolio to include such brands as Good Health, Snikiddy and Boulder Canyon.
Following the simple ingredient premise, its Boulder Canyon kettle-cooked chips are made with potatoes, oil and salt. The company cooks the chips in different specialty oils, including avocado, coconut, olive, sunflower, safflower and, most recently, rice bran oil. According to Utz marketing officials, each of the oil varieties selected imparts hints of different flavor nuances, while creating a crisp crunch.
Another snack company making a name for itself is Peeled Snacks. According to its website, the mission of the Cumberland, R.I.-based company is to create clean-label snacks that are as close to nature as possible. Their line of flavored organic baked pea snacks — puffs and crisps — provides half a cup of veggies per serving and are high in protein and fiber.
In a press release, Noha Waibsnaider, founder of Peeled Snacks, said that when she started the company 10 years ago, she set out to make a line of healthy snack products that would energize people and satisfy cravings without a “crash and burn” effect. Peeled Snacks, she said, are made with real food, have no refined sugars or preservatives, have no cholesterol, are Non-GMO Project-verified, certified gluten-free, and USDA organic certified.
Playing with Pricing and Placement
Products may be wide and varied, but the consensus from snack companies is the same — better-for-you snacks sell best when placed in the traditional snack aisle and are boldly called out with signage.
And, as some have discovered, compared with other grocery segments, cookies are not as price-sensitive as once thought. For example, Voortman officials said given that the lift from executing a price promotion at a modest discount is almost the same as at a deep discount, the best strategy is to increase the frequency of its ads and decrease the depth of its features. The other key observation company officials made was that the lift from products on display is virtually the same at regular retail price as it is at a modest discount.
“We have found that innovation is a much better driver of velocity off a display than price discounting,” Cross said. “By executing against these findings, we have been able to generate meaningful, profitable growth for us and for retailers.”
Mergers on the Rise
As interest in healthy snacks increases year over year, the industry is seeing a number of mergers take place. Most recently, Simply Good Foods, parent company of Atkins and Simply Protein, acquired Quest Nutrition. Together, the two will have combined sales of more than $800 million. Quest Nutrition’s key products include bars, cookies, chips and pizza. Its brand has a loyal following and strong appeal with consumers between the ages of 18 to 44 years old.
Joseph Scalzo, president and CEO of Simply Good Foods, said the merger would give his company access to Quest Nutrition’s experience within e-commerce, social platforms, specialty and other non-tracked distribution channels, while Quest Nutrition will benefit from Simply Good Foods’ expertise in building distribution in FDM channels and growing brand awareness.
“The acquisition of Quest strengthens Simply Good Foods’ position within the nutritional snacking category by expanding our portfolio of brands and product offerings, while also providing us with greater consumer and channel diversification,” Scalzo said in a press release. “This combination delivers on our strategy to become a broader nutritional snacking company that offers consumers a wide range of brands and products that satisfy their nutritional needs.”
In June, Mondelez announced it was purchasing a majority interest in Perfect Snacks, a San Diego-based company best known for its Perfect Bars, a line of refrigerated nutrition bars and bites for adults, and Perfect Kids, a line of bars aimed at younger consumers. Company officials said the move was made in part to help them gain entrance into the fast-growing well-being and refrigerated snacking segments.
— Carol Radice
The topic of placement is a little less black and white for nutritional bars. Seen as largely an impulse item, bars are versatile enough to be displayed throughout many locations within the store. For many companies, the first choice is for their better-for-you bars to be placed alongside conventional breakfast, energy and snack bars because, as Nadoff pointed out, “people who are shopping for a bar will see what we have to offer, how it compares to others and appreciate our message.” He also advised those who have the space to consider secondary placement options, including the front end.
Innovation in Focus
Just as pricing and placement are important components to boosting sales, so too is making sure shelves are stocked with the on-trend products consumers are looking for. With better-for-you snacks, often that not only include products that are healthier, but also encompass products featuring natural fruit, unique taste combinations and culturally inspired flavors.
In fact, according to Cross, some of the most successful innovations at Voortman have centered around the introduction of new flavors.
“Consumers are looking for fresh and natural flavors, and we have responded with flavor options that are not typically available in baked goods,” he said. “This includes products like mango, orange cream, maple and key lime.”
With so many salty snack options on the market, companies are differentiating themselves both through ingredients and globally-influenced flavors. For instance, Lundberg Family Farms, based in Richvale, Calif., recently introduced Bold Bites. The snack chips, made from organic rice, corn and black chia, come in such varieties as Sea Salt, Cheese Pizza, Street Taco, Korean BBQ, Mango Chile and Samosa.
Another company that has not shied away from offering unique flavors is Hippeas. Its line of organic chickpea puffs come in such distinctive flavors as Vegan White Cheddar, Sriracha Sunshine, Bohemian Barbeque, Pepper Power, Nacho Vibes and Himalayan Happiness. The company also has gone bold with its deliberately designed bright yellow bags to stand out on the shelf. “At Hippeas, we have made a commitment to keep all our snack innovations organic, vegan, gluten-free and non-GMO,” Serventi said. “It’s important to listen to consumers not just for trends, but for product innovations that will make their lives better.”
Some companies are choosing to put a new twist on traditional flavors. As an example, Boulder Canyon’s latest flavor, Canyon Cut Sharp White Cheddar Kettle Chip, combines the sharp and tangy notes of aged white cheddar with a crunchy, ridge-cut chip. The new variety features Non-GMO Project-verified cheese and gluten-free ingredients.
Boulder Canyon has taken a similar approach with its line of clean-label beef jerky. Available in four varieties — original, sweet, hot and teriyaki — the jerky is made with real ingredients, is gluten-free and offers 13 g of protein.
Beyond taste, companies also are innovating with portability and convenience in mind. For instance, Freedom Bar recently launched Freedom Minis, 10 individually wrapped bite-sized bars for when people want a little something to snack on rather than an entire bar. Additionally, the company is currently working on launching a granola bar line for late 2019.