FRUITFUL SNACKS

WILLIAM SMYTH

Children always like to have a sweet treat in their lunch box, and many parents today are obliging them with fruit snacks.

Though fruit snacks are perceived as a sweet, healthier alternative to candy bars, they still are the "new kids on the block," competing with granola bars, cookies, chips and other snack items for consumers' attention. Nonetheless, more people are buying fruit snacks than ever before.

Manufacturers are making these items more attractive to kids by tying them to major cartoon creations through licensing agreements. Moreover, by fortifying fruit snacks with vitamins and other nutrients, fruit-snack makers are getting the attention of parents. Thus, both children and adults are finding that the fruit product fits their needs -- for both sweetness and goodness.

"We have definitely experienced a growth in sales of fruit snacks," said Manny Shoemaker, a grocery merchandising coordinator for Acme Markets of Virginia, North Tazewell, Va.

"We recently had a pallet promotion from General Mills in which a prebuilt display was set up, and it carried their fruit-snack lines with other treat items. It went very well," he added.

According to Information Resources Inc., Chicago, fruit rolls, snacks and bars racked up $429 million in sales in the food, mass and drug channels during the 52-week period ended Jan. 3, 1999, up 7.6% over last year. Unit sales were at 257 million and were also up, 7.4%, from the previous period.

Betty Crocker had five of its fruit-snack lines among the Top 11 brands, with three Betty Crocker items leading the list. Fruit rollups, Fruit by the Foot rolls and Gusher's fruit rolls headed the list, which also included other brands like Farley's, Brach's and Sunkist. Private-label fruit snacks also did well last year, garnering $25 million in sales.

Growth in the fruit-snack category prompted Acme to increase the amount of space devoted to the section. According to Shoemaker, the 14-unit chain has gone from an 8-foot section to a 12-foot section. The fruit-snack set is across from the cereal aisle.

Pop Tarts are stocked on the top shelf, and fruit snacks are mixed in with granola products and snack treats like Golden Graham and Rice Krispies treats, Shoemaker told SN. Fruit-snack items sold at Acme include General Mills' Betty Crocker items and Brach's brand. Acme does not carry any private-label brands.

Some stores have chosen the candy aisle or snack aisle as the place to merchandise the fruit-snack category, while other retailers put these items in the produce section. For example, Ralphs Grocery Co., Compton, Calif., merchandises Sunkist fruit snacks in the produce aisle.

Acme also carries a single-serve Sunkist line that is stocked in the produce section. "I believe that the Sunkist items are there because parents look at them and perceive that they are a natural fruit-type item," said Shoemaker.

Janet Milan, a category manager with Giant Eagle, Pittsburgh, credits the growth of sales in the fruit-snack category to the influx of new products.

"I would say there's a growth in sales because of the new items that have been presented," said Milan.

Although General Mills is the leading producer of fruit snacks, other companies, such as Ferrara Pan Co., American Gourmet and even Slice, a subsidiary of Coca-Cola, also have items in the category.

Giant Eagle dedicates 4, 6 or 8 running feet to fruit snacks, depending on the size of the store and how the category is presented in the snack aisle. Most promotions are done by General Mills, but the promotional items are rarely given separate display space.

Milan noted that Giant Eagle's private-label Food Club fruit-snack line sells well.

Highland Park Markets, Glastonbury, Conn., also promotes its Sunkist fruit rolls in the produce section. "We moved it over to the end of the aisle near the produce," said Joe Panaro, grocery manager. He said Sunkist rolls are in the produce section because the name is associated with fresh fruit.

A four-unit retailer owned by Supervalu, Minneapolis, Highland Park Markets has seen flat sales over the past year and has only a 4-foot section of fruit snacks that are mixed in with granola bars. Panaro said that adults do not buy fruit snacks for themselves, but for their children.

"The majority of fruit-snack buyers are still buying them for their kids. [Manufacturers] are packaging the products with cartoon characters, which is geared toward the kids," Panaro noted.

Cartoon characters and novelty items are being used by fruit-snack manufacturers to draw attention to the category. For example, Rugrats Rolls and Bugs Bunny and Friends fruit snacks are popular with kids, as well as items shaped like sharks, dinosaurs and aliens.

"Companies that produce fruit snacks are doing a lot of licensing," said John Carlson, a marketing consultant for Cannondale Associates, Wilton, Conn.

According to Carlson, companies want current cartoon characters to represent their products because they will then appeal to the majority of children. "Companies are now trying to find a product that has enough appeal that kids will want it, and Mom will feel good about it," Carlson said.

"I liken it to how cereal was years ago, when companies would promote a cartoon character like Looney Tunes or get something that's hot at the moment," said Dave Menke, director of marketing for the Omaha, Neb.-based No Frills Supermarket.

A source at A&P, Montvale, N.J., who did not wish to be identified, also told SN that licensed products are doing well in stores. Fruit snacks are stocked in the snack area and take up roughly 4 to 8 feet at A&P, depending on the size of the unit.

Promotions are rarely done, the source said. When they are, fruit snacks will be featured in the store circular or newspaper advertisements. "Among all six major players in the market, six promotions have been done," the source said.

He also pointed out that at A&P, private-label fruit snacks have done well when competing with the likes of General Mills, Brach's and other major brands. "America's Choice fruit snacks stack up well against the majors," the source said.

No Frills carries General Mills, Brach's Farley's and Grist Mill. According to Menke, all the companies have done promotions at one time or another. Like most retailers, No Frills merchandises the Sunkist fruit roll in the produce section, along with the Fruit Leathers brand.

"Fruit snacks are one of our No. 1 snack items for kids," noted Menke. "We currently have 30 different stockkeeping units."

While the fruit-snack category has traditionally appealed to children, some manufacturers are hoping that adults will begin to purchase these healthful treats for themselves.

"The baby-boom generation is a huge market. The baby boomers are looking for a healthier snack that has no chemicals and no preservatives," said Richard Ehrman, president of American Gourmet Foods Co., Malibu, Calif. "Fruit snacks are appealing to a lot of people, because it's a portable fruit that you can take anywhere."

Nonetheless, for now fruit snacks remain a kids' category.