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Snack Facts

By Barbara Grondin Francella

Changes in America's eating habits are affecting sales of traditional packaged snacks, from chips to cookies, according to recent research.

The focus on obesity and greater awareness of good-for-you claims are dampening sales of chips and cookies, while more consumers are picking up nuts and other better-for-you snacks. However, because the definition of "healthy" is subjective, people may consider anything from an apple to reduced-fat potato chips as a healthy snack.

Retailers who want to cater to healthy-snacking consumers should offer healthier choices in otherwise less nutritional product offerings -- such as 100-calorie snacks -- or promote the health association of snacks with more nutritional benefits, such as trail mix and snack bars, according to Mintel International, a Chicago-based research firm.

The focus on "better for you" helped sales of some products, but hurt others. To get a better handle on where consumers' minds are when it comes to snacking, Mintel came up with a "healthy snacking multiple" that ranks snacks' acceptance as a product choice and as a healthy snack.

Nuts and seeds had the highest healthy snacking multiple (72.2). In this category, flavor innovation and product expansion aligning nuts with other consumer trends has become important.

In convenience stores specifically, sales of nuts and seeds rose 3.4 percent to more than $538 million for the 52 weeks ending Nov. 29, 2008, according to Nielsen Co. Unit sales, though, were flat.

Dried fruit and fruit snacks had the next-highest healthy snacking multiple (66.1). Maximizing dried fruits through product blends and packaging has been the core mission of marketers in this segment.

Popcorn is tied with nuts/seeds as the most commonly consumed snack food, yet this segment ranks significantly lower in terms of perception as a healthy snack (only 45 percent of users considered it healthy). The rising sales of less-healthy positioned ready-to-eat popcorn imply greater penetration among consumers.

In c-stores, for example, sales of packaged ready-to-eat popcorn soared more than 14 percent in the 52 weeks ending Nov. 19, and unit sales were up more than 8 percent, according to Nielsen research.

Rice cakes are considered by more people to be a healthy snacking option (multiple of 56.7), but these had among the lowest penetration in foods eaten as a snack, suggesting it has a narrow target market. Overcoming bland flavor objections has been the segment's greatest challenge, which fostered innovation in terms of flavor enhancements.

Trail mix was the third-leading snack food consumed (nuts/seeds and popcorn tie for first) and two-thirds of trail-mix eaters consider it a healthy snack. But because of the infiltration of many suppliers, the association of trail mix as a healthy snack is at risk, Mintel noted. Still, new brands are bringing new users into the segment and driving sales.

Snack bars fall in the middle of the pack in terms of their correlation with health and snacking. While 71 percent of respondents to the Mintel survey reported eating them as a snack, the percentage who considered them healthy is not quite as strong. One challenge: the offerings in snack bars range from candy bar-like products to nutrition bars.

Pretzels have wide appeal as a snack, but few consider it healthy. While this segment has a strong association as a healthy snack because it is naturally low in fat, popular health trends suggest avoiding foods high in sodium, carbohydrates and made from white flour, in short, the ingredient profile of pretzels.

Still, in convenience stores, pretzel sales rose nearly 6 percent for the 52 weeks ending Nov. 29, though unit sales were flat, Nielsen data showed.

Potato chips and corn chips are common snacks, but this segment has a very low healthy snacking multiple (4.7) because only 6 percent of respondents who eat them consider them a "healthy" snack.

Sales of potato chips in convenience stores grew 5.5 percent in the 52 weeks ending Nov. 29, but unit sales rose less than 1 percent, Nielsen reported. Tortilla corn chip sales grew by less than 2 percent, while unit sales tumbled 3.6 percent.

In the area of packaged sweet snacks, the U.S. market for cookies and cookie bars reached $5.2 billion during 2008, essentially remaining flat since 2003, according to Mintel. The cookie segment is expected to grow just 2 percent through 2013.

The picture is worse when inflation is a factor. Sales are forecast to decline 13 percent between 2008 and 2013, to $4.5 billion in 2013 at 2008 prices.

The category as a whole is suffering. Sales for all segments except private label dipped in the past two years, Mintel said. Continuous innovation is critical to maintain or grow sales, Mintel concluded in its most recent review of the category. More than four in 10 adults like to try new brands, flavors or types of cookies.

Hispanics and households with children are much more likely to eat and buy cookies and each of these groups is forecast to grow. Although consumers want to eat healthy, they do not always select cookies based on health concerns, Mintel said.

Brands including Oreo, Pepperidge Farm, Chips Ahoy! and others continue to sell well; brand extensions retain sales within their brand family. But higher quality and better-marketed store brands are making their mark on the category too. The market has been affected by both the success and lower prices of store brands, and a shift in sales to discount channels like Walmart, Mintel noted.
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