BETTER TO GO

Liz Parks

Until recently, time-pressed consumers were the perfect snack buyer. The "Grab and Go" lifestyle left little room for scrutiny.

As these shoppers grow more aware of the relationship between food and health, however, they're slowing down long enough to read labels and scan packaging information. It's no longer an easy sell, retailers told SN.

In Belgrade, Mont., Nabisco cookies and crackers in single-serving packs, Oscar Meyer Lunchables and Pringle's in one-serving canisters are outpacing the category's growth, as are snacks with a healthy image, such as granola bars, said Dan Gustafson, owner of Lee & Dad's IGA Plus, a single, 30,000-square-foot store.

Gustafson is giving convenient and better-for-you snacks more space on endcap or floor displays, cutting back facings of traditional snacks, and deleting refrigerated 12- and 24-can soda packs to make room for them.

"We are also seeing convenience items picking up -- not just in dry groceries, but in deli as well," he said. "But convenience isn't the only issue. It has to be value, too."

Rick Kelly, category manager of salty snacks for Abingdon, Va.-based K-VA-T Food Stores, which operates under the name Food City, said salty snacks positioned as better-for-you, such as Frito-Lay Baked Lay's Potato Crisps and Baked Doritos, are growing steadily in a category whose sales have been up in the high single-digits for the chain.

Value seekers also are lifting sales of large-size salty snack packages. With that in mind, K-VA-T has developed a successful pricing strategy that uses value promotions and multiples pricing to encourage consumers to trade up, Kelly said.

"We strategically plan all our ads and display promotional opportunities to feature the larger-size salty snack packages," he said. "Then, building on that, we add in features for single-serve or smaller items that feature multiple prices. So instead of selling one or two $1.49 convenience-size packages, we sell four smaller-size packages for maybe $4 or $5. That's helped generated multiple sales, as well as the higher dollar ring."

Carl Day, co-owner of Day's Market, a two-store chain based in Heber City, Utah, said major snack food makers are spending vigorously to support their brands, sparking an "increased focus in our advertising on snack foods. People will come in to get a better price on snack food, especially on protein/energy bars."

Day's Market also uses buy-one, get-one-free and multiple-priced offers to encourage shoppers to buy in greater quantity. "We have a value-driven economy in Utah. Low prices always drive sales, but people also look for value."

The decline of the sit-down family meal and erosion of the distinction between meals and snacks are fueling the appetite for on-the-go snacks, said Don Montuori, editor of Packaged Facts, a market research report based in Rockville, Md.

"Correspondingly, marketers are sparing no effort in product formulation and packaging to make it as convenient as possible to consume snack products anytime, anywhere, and in any amount," Montuori said.

In addition, snack makers are coming out with new and reformulated packaged snacks that are positioned as good for you, or at least not all bad for you.

"American consumers are ambivalent and often hypocritical in their nutritional attitudes, and the cast of nutritional villains -- calories, fat, sugar, carbs, portion sizes -- keeps shifting," Montuori said. "Future sales growth then should fall disproportionately to marketers that can give consumers their snack cake and let them eat it in good conscience, too."

At Key Food Stores Co-op in Staten Island, N.Y., sales of foods perceived as healthful -- granola bars, cereal bars, raisins, nuts, pretzels, baked chips and sugar-free snacks -- are up in the high single digits, said Bob Vorlicek, category manager of warehoused snack foods.

"We still see very good growth on sugar-free items as more and more people come to grips with growing older and the high incidence of diabetes that we have in this country," Vorlicek said. "People are always looking both to reward themselves and to alleviate some of the guilt associated with snacking by choosing healthy, or what they perceive as healthy, snacks."

With more people eating on the go, sales of single-serve snack foods as alternatives to sit-down meals are thriving, he said.

Emerald of California's new cylindrical packages of nuts, designed to fit in car cupholders for on-the-go snacking, have sold particularly well, he said.

Snacks designed for grownup tastes like Blue Diamond's almonds in Wasabi & Soy Sauce, Maui Onion & Garlic, Jalapeno Smokehouse and Lime 'n Chili flavors, are selling well, too.

Consumer analyst Harry Balzer of The NPD Group, Port Washington, N.Y., said retailers should push products that address the most stable trend: snacks that can be used as meal replacements. That may be as simple as merchandising yogurt in the produce aisles, or energy and cereal bars close to breakfast foods like cereal, eggs or juice.

Balzer said the definition of snacks is shifting. Many foods that used to be between-meal pick-me-ups are frequently used as side dishes. Think of crackers with soup, potato chips with sandwiches, and meal replacements like yogurt with fruit or cereal bars.

"If I have yogurt and fruit for breakfast or lunch," said Balzer, "is that a snack or a meal? People are not just snacking. They are using certain snacks as meal replacements. That's the long-term trend. People are trying to make meals easier. Yogurt is the perfect example. It can be a snack, a side item or a full meal."

Balzer pointed out that while fruit is the No. 1 snack in America, yogurt, chips, nuts and snack bars are the fastest-growing snack items. A lot of that growth has more to do with new products being put into the marketplace than consumer demand, though, he stated.

"Americans are triers," he said. "If something new comes to market, we want to try it. Then, often, we're on to the next new thing."

Still, retailers are confident that convenience and wellness will continue to drive snack sales for the foreseeable future.

"People want to save time," Carl Day of Day's Market said. "Snack foods are perfect because people can get through what they're doing without taking the time to stop and prepare a meal."

From Bars to Nuts

The four fastest-growing snack categories, based on consumer consumption

Percent of in-home snack meals that included these items

2004; 2003; 2002; 2001; 2000

Yogurt: 2.0; 2.1; 1.6; 1.5; 1.5

Chips: 5.7; 5.5; 6.3; 5.5; 5.4

Bars: 1.7; 1.3; 1.1; 1.0; 1.0

Nuts: 3.5; 3.0; 3.1; 2.2; 2.7

Source: The NPD Group's National Eating Trends Survey