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By Diane Toops, News and Trends Editor | 04/05/2012
Facing stagnant growth in their base grocery business, packaged-food companies are increasingly turning to snacks as an avenue for growth, reports Dow Jones Newswire.
It's no longer about inventing the next big meal idea, but about coming up with the next big snack for time-impaired consumers, who are looking for healthier and flavorful options.
"Nearly 60 percent of snack launches recorded by Innova Market Insights in 2011 had a health positioning of some kind," says Lu Ann Williams, research manager for Innova Market Insights (www.innovadatabase.com), Duiven, The Netherlands. "This is mainly with regard to passive benefits, such as whole-grain, organic, gluten-free or low and light. To a much lesser degree [we see] active benefits, such as vitamin- and mineral-fortification, levels of omega 3 fatty acids or bone health."
"Snacking is a long-term trend and the future of eating," said Gary Stibel, chief executive of New England Consulting Group (www.necg.net), Westport, Conn., which advises clients such as PepsiCo's Frito-Lay, the largest salty-snack player in the world. "You and I will continue to snack more and sit down to a meal less."
It's as if our social-media habits are going right to our stomachs, reports USA Today. In fact, analysts and food companies project enough growth in the $560 billion global snacks market, according to Euromonitor Inc., for most packaged food companies to bite into snacks for a healthier bottom line. Frito-Lay and Kraft Foods Inc. have long enjoyed hearty market shares in snacks. Frito-Lay is adding more premium- and lower-priced chips to its portfolio to capitalize on more growth in those price ranges, while Kraft, will separate its North American grocery business from its more-global snacks division, to pursue growth in emerging markets. After all, snack habits are more similar among countries than are meals.
“We've invested quite heavily in snacking because I saw it as a clear growth opportunity that really seems to have no boundaries as you look around the world. Snacking seems to be much more universal as you look from one market to the next.”- Irene Rosenfeld, CEO, Kraft Foods
Less expensive than meal options, snacks offer the convenience consumers seek, prices can be raised more quickly and easily than staple pantry products, and since they are often unplanned purchases, buyers are willing to grab them and go to satisfy their immediate snack craving.
As American consumers increasing snack more throughout the day, a number of packaged-food companies are dipping into the snack bowl. Kellogg Co.'s pending $2.7 billion acquisition of Procter & Gamble's Pringles brand will vault the cereal maker to No. 2 among salty/savory global snack makers. Also on the acquisition track, General Mills recently added Food Should Taste Good Inc., which makes tortilla chips (with flavors like sweet potato and chocolate) to its portfolio. ConAgra Foods will introduce pre-popped Orville Reddenbacher's popcorn in ready-to-eat bags plus a frozen Greek yogurt in June to be marketed as a healthy snack rather than a dessert.
Aside from unique flavor options, snacks are also being developed for consumers looking for healthier options of their favorite munchie. "Consumers are clearly telling us that they are watching what they eat and they want those healthy snack choices or options," says Mark Singleton, vice president of marketing and sales at Rudolph Foods (www.rudolphfoods.com), Lima, Ohio. Pork rinds are low-fat and low-carb.
"We are seeing high levels of consumer interest due to the basic nature of the snack – in a world where food brands are one-upping each other with more technology and more benefits, pork rinds are refreshingly simple."
Some recent Rudolph Foods introductions follow that "simple" philosophy. The company recently launched Cajun cheese popcorn under its Southern Recipe brand in response to consumer trends focusing on healthier, yet flavorful snacks. "Additionally, we debuted a pork stick with a natural smoky flavor in a few varieties to give consumers another tasty snack to satisfy their hunger," he says.
Source: Technomic 2012 The Snacking Occasion Consumer Trend Report
Singleton says perhaps the two top goals are "exploring ways to simplify our ingredient deck and still deliver the most important ingredient -- great taste."
"We've been talking to our customers a lot about snacks during the past five years because we've seen consumer behavior change so much," says Kim Holman, director of marketing, at Wixon (www.wixon.com), St. Francis, Wis. "They've redefined what a snack is. People used to think a snack was chips, cookies or crackers. Now snacks are beverages, mini-meals or three items on a tray.
"Research shows that a portion of the population has stopped eating three meals a day and gone to five small snacks, which has huge implications for the food and beverage industry," she continues. "Whether you are in foodservice or retail, you have to understand the consumers you are targeting and understand those snacking dayparts. As a marketer, I find it incredibly exciting and there are so many opportunities."
Holman thinks really innovative flavor starts in snacks and beverage at retail and moves out to other categories. "A big trend is the onset of gourmet peppers and different kinds of heat being applied to snacks," she says. "It used to be jalapeño; now they've opened it to a variety of peppers – habanero, ancho chili lime – heat with an emphasis toward bold hot flavors. A big megatrend we're seeing is ethnic. In the snack arena, it's easy to translate trends. Within topical applications for snacks, ethnic is a nice playground. We are seeing Korean barbecue, tandoori or curry on salty snacks like chips and popcorn."