Snack attack

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Snack attack

01/02/2017

It’s a train that retailers need to jump on. And if they’re already on it, they need to ride it as far as it will go.

That’s the message from Scott Reindel, vice president of business development and retail strategy for the Trophy Nut Co. in Tipp City, Ohio, and Bob Kaufman, president of Woodstock Farms Manufacturing in Edison, N.J., to retailers on the potential that fruit and nut snack mixes offer as private brands.

“If you’re not in this game, get in it and get in it in a big way,” Reindel states. “This category is growing. If you’re a retailer and you have only devoted 8 feet to this category in the last 10 years, you are greatly missing the boat. There is so much opportunity.”

Kaufman simply adds, “Private label is booming in this category.”

According to Mintel’s June 2016 report “Nuts, Seeds and Trail Mix — US” the category grew 28 percent from 2011 to 2016, driven by the popularity of snacking and the health benefits and convenience of these snacks. In 2016, total retail sales were $8.6 billion, and Mintel predicts total category sales to grow an additional 23 percent to reach $10.6 billion in 2021.

While there’s room on the train, Reindel says seats are being taken up quickly.

“There is a renewed focus on the category,” he adds. “Retailers are dedicating more space and for private brands in particular.… They are now devoting beach-front property to these items. When I say beach front property, I mean checkout.”

Reindel points out that closure rates in the category — meaning the rate in which people who shop an aisle at the store buy a product from that aisle — are 66 percent, making it a “destination” category.

Joe Setton, vice president of domestic sales for Setton International Foods in Commack, N.Y., which grows and manufacturers pistachios and pistachio products for private label, says retailers are giving his company’s products more exposure on end caps and at the front of the store.

“They are being highlighted more. And the more you highlight them, the more growth you’re going to get out of them,” Setton says.

Category drivers

In a survey within its report, Mintel states that 40 percent of consumers say that “high protein” is a type of nut, seed or trail mix of which they want to see more. Thirty-five percent listed high fiber, and 33 percent listed no additives/preservatives.

The health factor is driving the category, especially with nuts.

“Nuts are a good source of protein, which is easy to call out on packaging,” Reindel says. “Retailers are looking for romance copy, and there are a lot of good claims to make with nuts.”

While Setton says pistachios have always been known as a tasty snack, more people are catching on that they are a nutritious snack, which has helped to grow Setton’s business the last few years. Setton has taken advantage of the nutrition factor by launching new and innovative products, such as the pistachio chewy bite. It features only three ingredients: pistachios (50 percent), cranberries and agave nectar. The company also offers a dark chocolate pistachio, which Setton describes as “a little more decadent.”

“So you are getting pistachios with dark chocolate, which has its own health benefits,” he adds.

Mintel’s survey reports that 28 percent of consumers say they want more “organic” offerings.

“Organic dried fruits are popular,” Kaufman says, noting that mango, papaya and pitted prunes are not only popular in trail mixes but also as straight SKUs. “Millenials view them as high-energy foods.”

Innovation is also fueling the category. For instance, not only does Woodstock offer organic nuts, it offers organic flavors to go with them. The company also offers a salad topper featuring nuts, seeds and dried fruit.

“Between flavorings and innovation of mixes, we are bringing more to the table. But we don’t need to reinvent the wheel,” Kaufman says, noting that what’s important is to stay on top of flavors, such as sriracha and ghost pepper, and adapt them whenever possible to conventional and organic products.

Trophy Nut has also embraced flavoring. It has developed an extensive line of flavor profiles that work across stand-alone nuts and mixes. They include spirit-influenced flavors, including honey bourbon pecan, chile lime cashew and bloody mary peanut.

“We’re working on big projects with large retailers looking at bold and innovative flavors,” Reindel says.

For Setton, continuing to educate consumers and retailers on the healthfulness of pistachios will cultivate demand.

“We have to continue to show them that pistachios are one of the healthiest nuts,” he says. “The more we do that, the more retailers will feature them. The education doesn’t stop.”

Even more business

From Kaufman’s perspective, the key to attract even more business to the category is for retailers to offer top-shelf products. The formula is simple: If the private brand product is of good quality and value, consumers will return again to purchase it, he says.

“The retailer’s job is to develop the right packaging to attract the customer to the product and the right price point to sell the first bag,” Kaufman says. “My job is to get consumers to buy the second, third and fourth bags.”

Trophy Nut takes a similar approach, and it’s working. While value-driven retailers offer entry-level products, Reindel has found that consumers are willing to pay for high-end products. For one large retailer, Trophy Nut manufactures a snack mix priced at $8. And it sells.

Snacking presents another opportunity for growth. According to Mintel, 75 percent of consumers are most likely to eat nuts, seeds or trail mix as a type of snack. Mintel’s survey reveals that 28 percent of consumers snack in the morning, 52 percent in the afternoon and 44 percent in the evening.

Trophy Nut offers a line of breakfast mixes, including a cinnamon bun mix and a strawberry granola mix. “They have been a huge hit for us,” Reindel says.

Supply — a continuing challenge

Despite the category’s recent success and bright outlook for the future, there are still challenges.

When asked the top challenge in the category, Kaufman didn’t hesitate to answer.

“Supply … the continued quality of supply,” he says.

In most cases, Kaufman realizes that supply — considering Mother Nature’s impact on growing conditions of nuts, fruit, seeds and grain — is out of his hands.

As a grower, Setton keeps a close eye on weather trends, especially in California, where 98 percent of all pistachios are grown in the United States.

“Water is an issue and so is temperature,” he says. “Pistachios need cool winters for proper growth. These things can impact the crops and prices.”

When dealing with a commodity-driven category, it’s not always easy to hold price.

“You have to try, but you aren’t always going to win that battle,” Reindel says.

Do
consider offering more space to private brands in the category, including at checkout.

Don’t
miss the opportunity to educate consumers about the nutrition factor of fruit and nut snacks.

According to Mintel, 75 percent of consumers are likely to eat nuts, seeds or trail mix as a type of snack.