CHICAGO -- The snack category holds robust promise, according to Information Resources, Inc., here, capitalizing on consumer demand for convenience and a trend toward healthy noshing. In addition, the segment has been fortified with a spate of innovative new products.
David Shanker, executive vice president of client service for IRI, presented an overview of snacking trends and new product performance at the annual Food Marketing Institute trade show, being held here this week at McCormick Place.
Kim Feil, division president of worldwide innovations at IRI, set forth a similar picture at SNAXPO 2001, held in Orlando earlier this year.
According to statistics from IRI, total snacking -- including salty, savory, bakery, better-for-you and sweet -- has grown 27% over the past five years, contributing roughly $6 billion to the overall food industry.
"Snacks and chocolates are recession foods," said Feil. "They are that indulgent treat that's still affordable when money gets a little bit tight.
"This is a huge opportunity for the snacking industry to meet consumer needs as they don't have the money for gourmet foods and some of the other luxuries they may have been spending their money on for the past few years."
The snack category also stands to gain from the consumer clamor for convenient, on-the-go home meal replacement options, particularly in the breakfast niche.
Breakfast bars and the like also work well with the move toward health. While nutritional concerns remain a strong motivation behind food purchases, the paradigm has shifted, and consumers are less concerned with fat content and calories, focusing attention on balanced eating and convenience instead, according to Feil.
Consequently, the low-fat market has experienced a $300 million erosion over the last five years, she said.
Convenient breakfast foods and healthy snacks, such as nuts, dried fruit and granola bars, have been driving much of the growth in the snack food segment. Low sugar products are also exhibiting impressive numbers, according to IRI's figures for the 12-month period that ended December 2000.
In the candy segment, the big movement in chocolate has been in seasonal chocolate, which has grown 60% over the past four years, according to Feil. For both the seasonal and non-seasonal varieties the trend has been toward bite-size items, such as Hershey's Bites, another manifestation of the new parameters of a healthy diet.
"These new bite-size products are justifiable indulgences that aren't too bad for you," said Feil. "People are saying, 'I have to work out more, and low-fat is good for me, but I can indulge myself with a few small bites."'
Non-seasonal, non-chocolate candy experienced a growth spurt in the beginning of 2000, but had largely flattened out by the end of the year. Much of the growth in that segment can be attributed to packaging innovations in the mint category, playing up the convenience factor, Feil said.
IRI's New Product Pacesetter Study for the year 2000, which encompasses the entire consumer packaged goods arena, will be presented in detail by Valerie Skala, vice president of analytic product management for IRI, at this week's show. According to Feil, the snack food industry has a particularly strong new product launch record.
A product achieves pacesetter status by selling over $7.5 million in its first year of distribution. Cookies, salty snacks and snack bars have consistently been among the most successful food categories for the past several years.
Indeed, according to Feil, 60% of snack food growth is coming from new products. The charge is being led by new technology in flavor and seasoning, with an eye toward creative and exotic recipes, similar to the current fashion in the beverage segment, Feil said.
While supermarkets still dominate packaged food sales, the mass merchandising channel has made significant gains, with snack cookies and crackers now representing some of the largest shifts, Feil noted.
According to IRI, sweet and salty snacks alone added nearly $3 billion to the mass segment over the past five years.