PALATE PLEASERS

BARBARA MURRAY

Despite the constantly changing mindscape of what constitutes "healthy," cookies and crackers still hold the first- and second-place spots among America's Top 10 snacks, with cracker sales growing at a more rapid pace.

This is according to Robert H. Klatte, vice president of client service for Information Resources Inc., who is based in Fort Washington, Pa., and who spoke at the recent Snaxpo 2000 trade show held in Philadelphia. Klatte said cookie sales grew 8% from 1994 to 1999 to a total of $4.65 billion, while cracker sales went up by 24% in the same period to $3.69 billion, measured in all three main shopping channels.

Despite a decline in demand for salty snacks and nuts, some other major snack-category items are up. Cookies added 7% in stockkeeping units from 1993 to 1999, he said, while crackers' SKUs stayed flat. In the food-store channel, IRI reported that for the year ended Jan. 30, 2000, cracker dollar sales increased by 4.5% and units were up by 1.2%.

"The focus is on kids' items and more single-serve packages," said Peter Dudis, category manager for cookies and crackers at Big Y Foods, Springfield, Mass. The chain allocates 80 feet for both, which is neither increasing nor decreasing, he said. Nabisco has new resealable bags called doy bags, Dudis said, which have captured consumers' interest.

Joe Cunnane, category manager of grocery for Genuardi's Family Markets, Norristown, Pa., said while the doy bags have not been out very long, "they are the newest wrinkle, and fall into that convenience segment, which is becoming more popular in the cookie and cracker section.

"The growing convenience sector presents an opportunity to change our strategy, to realign the aisle, from a planogram standpoint, where space permits," Cunnane told SN. "Keebler and Nabisco would both prefer to have a convenience sector within their own category, but we think they should be joined, in a section as a 'go-to' spot," he added.

From 1998 to 1999, cracker sales increased by 7%, Klatte said, while cookie sales jumped 5%. Cookies and crackers were purchased by nearly all households in 1999, as each had a 96% penetration rate. IRI pinpoints the buying rate, or the amount spent per buyer, for cookies at $45.08, and for crackers at $34.33.

Some retailers notice a spurt of buying tied to a season. For example, soup weather spurs saltine sales, said Jace George, manager of grocery purchasing for Spartan Stores, Grand Rapids, Mich. Although George handles only private label, and says there are no "hot" new products in the lines, the "hot" season for saltines is in the fall and winter. Snack crackers are usually very steady, but they peak around graduation time and again in the fall when school starts, George added.

Holiday times, such as November and December, are good months for cracker sales, Big Y's Dudis said. In low-fat, he said, "the need and demand for them is steady, but significantly lower than for the regular kinds." Cookies are normally stable, but they also see a small peak around back-to-school time, he said.

Private label is no longer "a recession brand," noted Klatte of IRI, charting rises in supermarket sales connected to periods of recession in 1975, but peaking in the 1980s, which were generally prosperous, and again charting a steady rise from 1995 to the present. Consumer interest in store brands is still growing, Klatte told the group at SNAXPO. In segment analysis IRI provided to SN, private label was frequently in high positions. For example, in breadsticks, private label was third and in graham crackers and in saltines, second.

The fat-free craze of several years back has slowed, Dudis said, "but there's some new interest in sugar-free."

Upscale adult cookies and crackers are doing well, according to Joe Shannon, vice president of sales and marketing for Kehe Food Distributors, Romeoville, Ill., which supplies major supermarkets in the Great Lakes region. "I have Lu, Balsam, Carr's and Walker's Shortbread," he said. "They're a real treat for an adult. All those cookies are up, and the reason is, it's a small, affordable treat." Most supermarkets have 4 feet of seven shelves for these kinds of cookies, he said.

Meanwhile, manufacturers are always adding new products and cross-promotional tie-ins to the mix. At Natural Products Expo West, recently held in Anaheim, Calif., some new cookies were introduced in the shapes of characters from Richard Scarry books, part of a children's line launched by The New Organics Co., Boston, which claims 24 kid-tested favorites, certified organic. The license was granted by Viacom Consumer Products, the company said.

"I think Nabisco is in the forefront now in the category, in terms of licensing," said Cunnane of Genuardi's. "Sportz will be an addition to their very successful cracker line -- and that's only been out for a short time also -- but I have noticed it is selling rather well. We are providing some incremental displays on some of these newer items, since we like our customers to see them at Genuardi's first. Through our DSD channels we have had a lot of success," Cunnane added.

Nabisco, the leading manufacturer and marketer of crackers and cookies, recently introduced Major League Ritz crackers, with a baseball shape, along with others in its Sportz line. The six sport shapes, which include basketballs and in-line skates, come in two flavors -- cheddar cheese and pizza.

The company's first new adult cookie in eight years, called Cafe Cremes, is described by Nabisco spokeswoman Ann Smith as a rich, indulgent, vanilla-based sandwich cookie, oval in shape and very "pretty" with a swirl. Flavors include Cappuccino, Vanilla Fudge and Vanilla. "The positioning is 'Everybody deserves a break now and then,"' she said. In 1992 Nabisco released its SnackWell's line, also targeted at adults.

"The wellness category is evolving, and the brand has a strong following," Smith said. Within the so-called wellness category, two SnackWell's cookies, Mint Creme and Caramel Delight, have been doing very well, Smith said.

Oreo sales still grow at double-digit rates annually, she said, spurred on by "fun" promotions that play off the equity of the cookie. For example, the Oreo Stacking Contest started in 1997, and is conducted in 18,000 supermarkets from the end of May to the end of July. Two $20,000 U.S. Savings Bonds are offered as prizes, one for each age group, along with a year's supply of Oreos, and finalists also win a trip to a World Series game.

Children have 30 seconds to create a single stack, and this year, Smith said, regional finals will be held at four major league baseball stadiums. Some of the winners have stacked 29 cookies, she said. "A special Baseball Oreo will launch during the summer, as the official cookie of major league baseball," Smith added.

Playing off the collegiate basketball finals, a Munch Madness Oreo is out now, with a basketball graphic on the front of the package. One side of the cookie is embossed to look like a basketball, and the creme filling is orange. "It's our NCAA tie-in," Smith said.

"Last year when the Cleveland Browns came back to Cleveland, we created a special Cleveland Browns Oreo, and we have done special promotions, such as the one this year with the [University of North Carolina] Tar Heels," Smith went on. "The filling is sky blue. They took on our Spring Oreo, with light-blue filling, and that was their good luck charm." Nabisco is also doing a lot with its licensing partners, such as Nickelodeon, she added.

"Consumer promotions are getting bigger and better, with more arms and legs to them because of the Internet," Smith said.

Major League Ritz will be taking lucky fans to Major League games in 2000 and 2001. The person who finds the Ritz cracker with the words "Grand Slam" baked into the cracker will win a trip for four to one of the 2000 World Series games. In addition, one lucky winner who finds the cracker reading "Home Run" will be sitting with three friends at Safeco Field in Seattle for the 2001 All-Star Game. There are also 100 crackers that say "Base Hit," which translates into a Major League Baseball Replica Jersey in the team of the winner's choice.

Nabisco is also on the verge of rolling out a new program designed to help retailers grow sales of their cookie and cracker stock. Called "Nabisco Delivers," the program is based largely on consumer insights and is driven by direct store delivery practices. Levels of the program, many of which are already enforced by Nabisco, include insight, or trying to deliver proprietary information on the category to customers in a timely fashion; offering snacking solutions; helping customers streamline the category; maximizing the impulsivity of the category through promotions; and efficient DSD execution.

"We've spent the past 18 months repairing our DSD sales force," Brian Driscoll, senior vice president of sales and logistics for Nabisco, told SN. "Being the category leader, we haven't done a good job of telling our customers how we can improve the category.

"Our obligation to our customers is to bring them ideas on how to grow efficiencies in the system. It's not an event; not a one-time thing. It's an ongoing process," he said.

Nabisco's salesforce is currently being trained on the new program and customers will become involved within the next two months, Driscoll added.