2007 State of the Industry
Healthy Snacks Lead Growth, But Snack Makers Cautioned Not to Ignore ‘Indulgent’ Consumers
With “healthier snacks” leading the way, U.S. snack sales increased by 3.2% in 2006, according to the 2007 State of the Industry report presented at SNAXPO Monday, March 26 by Sally Lyons Wyatt, senior vice president, Information Resources, Inc. (IRI).
According to the IRI study, healthier snacks sales increased 6.4% in 2006, far outpacing salty snacks at 3.7%, chocolate at 3.2% and indulgent snacks at 2.1%.
“But it’s extremely important not to put all of your eggs in the healthy basket, because indulgent snacks still have a 66% share of consumer snack purchases,” Wyatt cautioned, noting that healthy snacks will continue to increase share—but gradually. A huge opportunity, she added, will be healthier versions of indulgent snacks that retain the taste of those products.
Wyatt said consumers age 55 and older are especially concerned about eating healthier and are important targets for healthy snack products, as are families with young children, given the upward trends of childhood obesity.
“Seventy-eight percent of consumers are trying to eat healthier,” Wyatt said, and 66% are trying to eat snacks with nutritional values, while 57% are trying to snack less. “Consumers aren’t just trying to lose weight, they are trying to figure out ways to have overall wellness with a focus on the foods they eat.”
According to the study, 86% of new product pace setters are in snack food categories.
Wyatt urged manufacturers to look for ways to partner with retailers who are emphasizing health and wellness in their stores. There are significant opportunities in the areas of new product development, targeted marketing and merchandising, she said, adding that keys to new products are health and wellness, taste and variety, and products that can be seen as meal replacements.
While consumers may see “light” or low calorie products as ways to improve their diets, the study showed that many consume light products more frequently than regular. Iif we get new consumers coming into the category and they consume it more often, it’s a way to keep the snacking segment very strong,” she said.
SFA members may view Wyatt’s complete presentation, including study charts, by clicking HERE.
SFA Presents 2007 Circle of Honor Awards
The Snack Food Association honored the founders of Pretzels, Inc., Bluffton, IN March 25, 2007 with its prestigious Circle of Honor Award in recognition of their careers as entrepreneurs, their impeccable business ethics and contributions to the industry.
Willaim Mann and William Huggins were honored at SNAXPO 2007 during the Sunday morning general session, where they told convention attendees the importance of their employees, sales force, customers and vendors in the success of their company.
William Mann and William Huggins launched Pretzels, Inc. in 1978 in a small facility with a single oven. Today, Pretzel’s, Inc. operates in a 200,000 sq. ft. building and employs more than 220 people. Its production facilities include six high-speed pretzel ovens, 27 packaging machines, two extruded corn lines and an automated palletizing system. About 75 percent of the company’s business is private label and it also markets a growing brand of its own, Harvest Road.
Both William Mann and William Huggins say their membership in SFA has been a big part of their success. Mann achieved the association's highest honor in 1993 when he served a year as chairman.
“We joined SFA early,” said William Mann in his acceptance remarks. “In fact, the first SFA we went to was on a snow mobile so we could get to an airplane after a big snow storm. It was a really smart thing to do for a new business.”
Author Outlines ‘The Wal-Mart Effect’ at SNAXPO 2007
Author Charles Fishman told SNAXPO attendees Sunday, March 25 that Wal-Mart, the world’s largest company, “has literally changed the ecosystem of business in America.”
Fishman , author of the book “The Wal-Mart Effect,” discussed the impact that Wal-Mart’s buying power has had on suppliers, as well as employees and consumers. “The impact comes from its scale,” Fishman said. “Wal-Mart touches the life of every single American every day.”
According to Fishman’s research, 62% of Americans live within five miles of a Wal-Mart; 94% live within 15 miles and 99.5% within 25 miles. Even so, the company continues to build and open new stores.
Fishman discussed individual cases of suppliers that have been affected by Wal-Mart in terms of production, product selection and pricing. For some, the results have not been positive, he said, while others have improved their position because of efficiencies implemented in order to meet Wal-Mart’s needs.
Snack Food Manufacturers Urged to Partner on Childhood Obesity
U.S. retailers see childhood obesity as a “real and lasting problem” and many are looking to food manufacturers to partner with them in an effort to help get that “epidemic” under control.
That message was offered Sunday, March 25, 2007 by Saint Joseph’s University food marketing professor Dr. Nancy M. Childs during a SNAXPO educational seminar.
“We are in an obesity environment shift in the industry,” Childs said as she urged snack food manufacturers to work with retailers and respond by providing products with “a little less salt, a little less fat, and maybe whole grains.”
Childs said there are many opportunities for snack food suppliers to provide more branded and private label healthier items for children, including portion control products like 100 calorie packs. Retailers also want help with merchandising and product promotions, she said, as well as sponsors for activity-based events aimed at kids.
“Retailers have really stepped up on the education side,” she said, suggesting that food manufacturers can help. In-store nutrition education is now becoming a growing trend, she said. “There are many opportunities to partner with retailers.”
To review Dr. Childs’ complete presentation, please click HERE.
SNAXPO 2007: Exploring Energy Sources
In the wake of skyrocketing costs of oil, gas and natural gas, salted snack producers and other food manufacturers this year are being kicked, dragged and pushed into the new energy millennium that will impact the industry for years to come. To survive in this new era for energy, companies must explore alternative sources to fuel their operations.
That’s the message from Gray Campbell, founder of Power Systems Group., based in Atlanta, GA. Speaking about how to “Effectively Lower Energy Costs” at SNAXPO, Campbell noted that “geopolitical forces,” such as global warming and other environmental issues, are shaping the debate about the use of natural resources.
Today, he added, energy accounts from 10% to 30% of manufacturers’ costs to produce goods, second to only raw material.
Although academics and researchers are debating the use of such alternative fuels such as biomass, geothermal and solar energy as potential solutions, most of these power sources are either not available on a mass scale or too costly to implement, Campbell said.
In the end, he added, the shift to alternative fuels will require governmental intervention in terms of subsidies and with changes in policy and regulations. Without governmental help, the nation’s reliance on conventional natural resources will only continue even in the face of rising energy costs.
As a result of a special agreement with SFA, Campbell is available at a discounted rate to consult with SFA member companies regarding ways to manage energy costs. For more information, please contact Christopher Melchert at 703-836-4500, ext. 211, or cmelchert@sfa.org.
