SNACK AWAY

KELLY GATES

With the back-to-school season under way and year-end holidays just around the corner, supermarkets are focusing much of their attention on the snack foods category.

Everything from potato chips and tortilla chips to meat snacks and even granola bars is being promoted by retailers who work closely with manufacturers to present creative displays and competitive prices to shoppers.

In many stores, the typical buy-one, get-one-free promotion has been replaced by mass quantity deals that prompt shoppers to pick up an extra two or even three bags of chips, boxes of snack crackers or other snack items.

Meijer, Grand Rapids, Mich., rotates such promotions from one snack item to another virtually all year round. A recent store visit by SN uncovered a sale on snack crackers that offered three to four items for $5. Instead of one or two choices, Meijer had included nearly every brand and flavor of cracker in the category, including all Wheat Thins products, various Ritz varieties, Cheese Nips, Goldfish and a multitude of other flavored crackers. The entire section was awash in bright yellow shelf-talkers, creating an in-store traffic jam of shoppers from one end of the aisle to the other.

While snack crackers are popular, potato chips are an even hotter item in the category, said Ann Wilkes, spokeswoman for the Snack Foods Association, Alexandria, Va.

"Potato chips have long been the No. 1 seller in the snack foods category and in 2001, 1.85 billion pounds of potato chips were sold, a 3% increase from the previous year," said Wilkes. "A lot of this growth is due to the new and exciting flavors now available. Instead of plain barbecue, there's applewood barbecue or sweet sassy barbecue and other unique flavors like grilled steak and onions, Hawaiian, California dill, blue cheese and Southwestern spice."

These new flavor introductions are a result of consumers' changing taste in food overall, she said. More shoppers are interested in trying new blends of ethnic and authentic food flavors, often with ties to specific regions of the country and even locations around the world. "Instead of simply Asian-flavored foods, people want Pacific-style Szechwan and tastes like Texan barbecue or Texan spice instead of the same general Southwestern flavors that have been around for years," Wilkes added.

Another area that is faring well is organic or natural foods like granola bars.

Consumers have gone back to eating in moderation vs. eating lots of low-fat foods and things like organic tortilla chips and granola bars are often chosen because of their health benefits, said Wilkes. However, chocolate-covered granola snacks are currently gaining in popularity, "blurring the lines between snack foods and candy," she said.

Meat snacks have also done well in recent years with items such as Slim Jims and beef jerky increasing in sales 26.2% from 1999 to 2000, reported Wilkes, who attributed much of this growth to popular protein diets like the Atkins diet, which pushes consumers to eat meat instead of carbohydrates.

"Convenience and protein are the keys with meat snacks and people are choosing meat snacks because they can get the protein they need and eat it on the go," she said.

Sales of pork rinds had risen more than 20% from 1999 to 2000 due to this diet trend, but only rose 0.7% from 2000 to 2001.

According to Information Resources Inc., the Chicago-based market research company, the total snack category, including bakery, salty, confectionery and specialty snacks, is currently around $40 billion, a growth of 3.7% over last year.

This figure is consistent with a four-year annual growth of 3.8%, with salty snacks leading the category at a 5% growth.

Although retailers and other industry participants pinpoint new flavors as being a significant driving force behind consumer interest and increased sales, IRI representatives told SN they are concerned that CPG manufacturers are relying too heavily on line extension vs. innovation, resulting in short-term growth at best.

The firm also pointed out the surprising lack of effort on the part of grocers to promote snack foods more vigorously despite the tremendous opportunity to capitalize on how well the category fits the consumer demand for convenient meal replacement. Eric Anderson, senior vice president of marketing for Fresh Encounter, the 29-store supermarket chain in Findlay, Ohio, responded by saying it's difficult to get too creative in this area because large-scale promotions often require the cooperation of several manufacturers, which can be difficult to arrange.

"Mass merchants have an easier time than grocers with big promotional concepts like cross promotions because they have more clout with manufacturers and it's very difficult to get several different vendors to agree to one promotion," said Anderson.

"Plus, while we frequently promote snack foods during times like the back-to-school season, we like to spread our promotions out throughout the entire school year vs. just doing large promotions in the fall." Instead of creative cross promotions and major marketing programs, Fresh Encounter relies heavily on manufacturers to supply the ideas that will sell their products. According to Anderson, vendors like Keebler and Kellogg provide eye-catching, stand-alone displays that resemble school buses or are labeled "Chipper" displays. "We try to focus a lot on snacks for lunches, but also after-school snacks like cookies, Little Debbie [snack cakes] and even some frozen pizza products that kids can cook themselves," he said.

Penn Traffic Co., which owns 216 supermarkets in Ohio, West Virginia, Pennsylvania, upstate New York, Vermont and New Hampshire, has seen a surge of growth in the snack foods category due to new products like Frito-Lay's Go Snacks and other single-serving, on-the-go varieties.

"What's hot in the snack foods category? Two words -- Go Snacks," said Marc Jampole, spokesman for the Syracuse, N.Y.-based company. "Anything in the 1 1/2- to 2-ounce serving for one packaging that enables kids or even adults to quickly take one with them is hot right now. People don't open a bag of chips and divvy up servings for their kids' lunches in plastic bags anymore. It's all about convenience."

Along with Frito-Lay's Go Snacks, IRI lists Nabisco Ritz Bits and mini Oreos in convenience packs, Procter & Gamble single-serve Snack Stacks canister products, Pepperidge Farm single-serve and Giant Cheese Cracker Goldfish, Ragu Express shelf-stable complete meals and General Mills Wahoo's portfolio of snacks as "On the Go" snacks that are driving the category this year.

Concurring with the Snack Food Associations' findings that unique flavors are also driving the category, Jampole adds that salsa-flavored tortilla and potato chips are big sellers in Penn Traffic's stores. And, in the natural foods category, granola bars and natural tortilla chips are doing well, he added. As a result, the stores under Penn Traffic's umbrella stock both items in the snack food aisles as well as in the natural food section.

Jampole also told SN snack/meal replacement bars, such as Nutrigrain breakfast bars and cereal bars, are good sellers for snacks. "Wherever we can, we're expanding our aisles for breakfast snacks since people are now eating granola bars and other health bars for breakfast instead of just a snack," he said.

Shoppers at Wild Oats, the natural food grocery chain in Boulder, Colo., seek out more natural and healthy snacks for themselves and their kids, opposed to the traditional snacks like preservative-filled potato chips and other items.

Consequently, the chain's organic or natural bulk snack foods are very popular.

"The bulk category is a point of difference for Wild Oats with choices like whole grains, nuts, natural candy, granola, sesame sticks and dried fruits," said Sonja Tuitele, spokeswoman for Wild Oats. "Our customers like the fact that they can take as much or as little as they like and the lack of packaging cuts down on the environmental impact." Wild Oats featured back-to-school ideas for healthy snacking and healthy eating for kids as its store theme last month. The retailer is also planning to hold a back-to-school event that will include a tasting fair featuring tips on how to snack healthfully and naturally. "This event will host health and nutrition experts who will give parents and kids helpful hints on how to incorporate healthy eating and exercise into kids' daily lives," said Tuitele. "This will include produce snacks, such as fruit and vegetables, as well as snacks from our bulk departments like nuts, granola, Asian snack mix and other, more healthful alternatives to traditional snacks."

Back-to-school signage will also be continuously featured in Wild Oats' stores and the concept is promoted weekly in advertising fliers.