SNACKS ARE HOT

BARBARA MURRAY

The frozen-snack category is growing rapidly, as time pressure on people increases and eating on the run becomes a way of life. Over the past five years, frozen-snack sales have probably doubled, says one category manager -- Brian Nichols at Marsh Supermarkets in Indianapolis.

The key to merchandising snacks is display, Nichols says. "Snacks are an impulse item. You have to get them out in front of people; call attention to them. You do that in a freezer section with display bunkers. We use special signage to call attention to the quick and easy preparation," he noted.

When SN spoke with Nichols, he was getting ready for the back-to-school season, and was planning to emphasize Hot Pockets and Bagel Bites. "You run a good price point, but the key is good signage and good display," Nichols said.

Dollar volume for frozen hors d'oeuvres and snacks increased 21% from 1995 to 1996, and has continued upward. In 1997, there was a 13% increase; in 1998, a 6% jump; and this year, for the 52 weeks ended July 11, frozen snacks are up 6.7%, according to ACNielsen, Schaumburg, Ill. Total dollars in the category now stand at $426 million, according to ACNielsen. Four years ago, the figure was $277 million.

The popularity of such items at home "comes from [consumers'] exposure to these foods at restaurants," said Elaine Thompson, vice president of the frozens division at Golden State Sales & Marketing, Anaheim, Calif., a food broker. For example, she said, TGI Friday's developed potato skins in 1965 in New York City. Now many supermarkets carry them and other new TGI Friday's products.

In the Buffalo-Rochester, N.Y., market, the hot-snack category grew 6.9% for the 52 weeks ended June 5, according to John Arena, business development manger for Pezrow, Buffalo, N.Y. (The broker cited figures from ACNielsen.) "To put it in perspective, Anchor Food Products [one of his clients, based in Appleton, Wis.] grew 57% in the same time period, excluding the new TGI Friday's items."

Another item "growing like crazy," he said, is vendor-style soft Super Pretzels, up 19.8% in that upstate New York market. Bagel Bites (by Ore-Ida/Heinz) are up 21%, too, Arena said.

"Frozen Jamaican beef patties are now mainstream for us," said Carrie Compian, international-food buyer for Fiesta Mart stores in Houston. She described the item as a handheld turnover filled with meat. "All the spicy things from the Caribbean seem to be the best sellers," Compian said.

Balducci's, a specialty retailer in New York City with a large catalog order business, carries "very special" frozen hors d'oeuvres, said Alan Butzbach, vice president of operations, such as high-quality handmade spanikopitas -- spinach pies in little cups of phyllo dough. The store also carries a line of tacos and burritos that are "perfect for teens after school."

Snacks have been called the fourth meal occasion, especially the after-school snack. Many are frozen, microwaveable items, which appeal to parents who don't want their kids fooling around with an oven.

Teens and other consumers seem to prefer brands in this category. The leader is Totino's, by Pillsbury, according to Information Resources Inc., Chicago, followed by Bagel Bites, and Poppers. Hot Pockets are in fourth place. Private label varieties are 12th on the list but, in most other segments, private label is found much closer to the top.

"Just about anything that is handheld is growing strong," he said. "People are eating on the run. Teens after school are running, too, on their way to soccer or football practice or games." Although Marsh's 90 stores vary, a typical section for frozen snacks is three to four doors.

Snacks generate a higher gross margin than some other items, so it's not much of a problem to find room for new or popular additions, he said. "We are always looking for additional space to accommodate the category," Nichols said.

Santiago Moneo, vice president of sales for Caribbean Food Delights, Tappan, N.Y., said snack foods are doing well partly because teenagers of working parents are doing a lot of the grocery shopping -- and they buy snack foods. Teenagers also like spicy foods, he said, like the ones his company makes.

"We do a lot of in-store demos and promotions," he said.

Back-to-school promotions are ongoing in a number of inner-city independents such as C-Town, Key Foods, Pioneer, Met Food and Bravo, and also in the Pathmark chain. The independents are serviced through White Rose, Elizabeth, N.J., or Porky Distributors, Jersey City, N.J.

Marvin Spira, executive director of the Eastern Perishable Products Association, Hasbrouck Heights, N.J., said most retailers have done their homework on demographics, and they know teenagers are a prime marketing target.

"Teen development has to do with independence -- many work, and spend their own money on food. The tremendous amount of advertising on TV is influencing the whole snack field," he said.

"Of the 9,000 new food products introduced this year, a good 3,000 will be snack foods," he continued. "One of the reasons is the microwave [oven] has become a standard piece of equipment in every kitchen. The microwave is very easy to use -- young people are not going to burn themselves, and it's extremely convenient. Therefore, many new products are specifically made for the microwave," Spira said. "Those retailers who aren't concentrating on the 12- to 18-year olds are missing a very strong segment of the market."

Supermarkets can use fliers, shelf-talkers and a lot of demonstrations, Spira said, to promote snack foods. The category is easy to demo, since snacks are small and tasty, and many fit on a toothpick.

Thompson, of Golden State Sales & Marketing, said a product called Taquitos, shredded beef rolled in a corn tortilla and deep fried, is probably the top-selling Mexican product found in the International frozens door in the Vons, Ralphs and other California chains she calls on.

Thompson hasn't seen any retailer promoting products directly to teens. She said that in her market, kids don't do much of the shopping. "As far as I know, the parents buy food for the teens, especially the handheld items, such as a burrito," she said. "It keeps them busy between 3 o'clock and 6 o'clock."

Thompson pegged the demographic for frozen snacks and appetizers as between 18 and 34.

She recently demoed new items for Ralphs Grocery Co., Compton, Calif., and buyers there agreed that many people would be at home on New Year's, no doubt serving some frozen snacks.

Celantano, Verona, N.J., which was the first to come out with a square pizza decades ago, has started to produce NicKnax mini pizza bagels. NicKnax was developed because of retailer requests, said Nora Bertucci, public relations director for the company, and will begin shipping this month. NicKnax come in three varieties and can be heated in a conventional oven, toaster oven or microwave. Larger sizes, in packs of 24 and 48, have come out as a result of focus-group research, she said. The package is resealable, and kid-oriented.

"Celantano has always put the ingredients on the package front. Now it has stick figures dancing around the ingredients, to appeal to kids," Bertucci said. Still, she added, "It is not necessarily marketed just to teens, even though they are probably the No. 1 consumers of this product."