PG Web Extra: Healthier Snacks Driving Center Store Sales

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PG Web Extra: Healthier Snacks Driving Center Store Sales

By Jim Dudlicek, EnsembleIQ - 03/03/2017

Ready-to-eat popcorn. Veggie chips. Beef jerky. Snack nuts.

These and other snack items considered better-for-you options are driving sales growth in center store snack food categories, at least one grocery retailer confirms.

On the other hand, “we are also experiencing flat or declining sales in many traditional cookie, cracker and salty snack options,” says Jason Ramsey, VP of center store for Winston-Salem, N.C.-based supermarket chain Lowes Foods.

To take advantage of this swing in demand away from traditional “junk food,” Lowes is leveraging the healthy halo of complementary products.  “We have created a better-for-you snacking center in the perimeter of the store, which allows us to bring new items in quickly,” Ramsey explains. “Our better-for-you snacking displays have delivered more incremental sales growth than traditional snacking items. We also leverage product identifiers for organic and gluten-free items so our guests can easily identify those items.”

Additionally, Lowes has incorporated healthy snacking options into the front end checkstands “so our guests can choose based on what’s important to them,” Ramsey says.

To maintain this momentum, Lowes collaborates with its snack food suppliers. “We make every effort to share current sales trends and UPC-specific sales data to ensure suppliers have the most current data for making base retail and promotional retail decisions,” Ramsey notes. “This allows suppliers to react quickly to leverage best-in-category retails and tactics to drive additional sales.”  

Popping Fresh

Building on the popcorn trend, Cincinnati-based Gold Medal Products is helping retailers generate more buzz than typically found in center store aisles.

Gold Medal offers a turnkey solution, nicknamed the Sweet Shop Set-Up. This customizable line of equipment offers options for creating a variety of products, including gourmet popcorn, fudge, pralines, cotton candy, fresh-roasted nuts and gourmet caramel apples.

“Eating occasions are now overwhelmingly linked with snacks,” says Pete Bakala, Gold Medal’s VP of branch operations and sales. “The Sweet Shop Set-Up is a unique way to offer consumers grab-and-go convenience combined with a fresh in-store experience that engages the senses. Plus, gourmet popcorn provides a product that is so versatile. With flavors ranging from savory snacks to sweet treats and even health-driven varieties, you can satisfy customer demands.”

According to Bakala, the sweet shop concept offers average gross profit margins as high as 80 percent on some items, giving stores huge flexibility in pricing when compared with other comparable prepackaged items. Additionally, retailers can build a private-brand label around sweet shop offerings and create products aimed at special occasions.

“Gold Medal supports stores with robust research and development, so our product line remains consistent with current customer trends,” Bakala notes. Among his cross-merchandising ideas: pairing snack-sized popcorn with a deli sandwich and drink for a lunch combo, party platter specials with cake purchase for special events, beer and wine pairings that showcase different complementary flavors of popcorn, popcorn promotions in connection with new DVD releases, and front end displays to drive impulse purchases.

Basket-building Treats

Chicago-based Conagra Brands is healthing up one of its center store snacking mainstays: pudding.

Snack Pack Naturals, in Vanilla, Chocolate and Chocolate Vanilla Swirl varieties, are “made from nothing artificial, with natural ingredients like real cocoa and real sugar … with as much calcium as an 8-ounce glass of milk,” says Adam Beane, senior brand manager. Free of gluten, nuts and eggs, Snack Pack Naturals are “especially appealing to Millennial moms with children in the 6-to-9 age range,” Beane adds.
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As such, they’re a cross-merch natural for lunchbox season. “We help our retailers’ shoppers make the connections more simply," explains Jonathan Kruesi, senior brand manager. "For example, we merchandise products together to enable an easy basket builder. During the key back-to-school and return-to-school periods for pudding, we partner with other manufacturers of cookies, fruits and candies to mix into our Snack Pack Puddings. This enables Mom to quickly pick up the ingredients for fun, easy, make-at-home pudding cups.”

Bar None

Meanwhile, Minneapolis-based General Mills is leveraging the strength of its Nature Valley brand to deliver on the demand for whole grains.

Nature Valley recently launched three new items: Granola Cups, XL Protein and Biscuit Sandwiches. “Through research, we learned consumers are looking for snacks that taste great, deliver increased energy and help them feel full,” says General Mills spokesman Mike Siemienas.

Nature Valley Granola Cups combine granola with creamy nut butters to satisfy consumers’ cravings for an indulgent treat. Nature Valley XL Protein Bars contain 15 grams of protein and are 50 percent larger than the brand’s traditional protein bar. Nature Valley Biscuit Sandwiches are a “bridge to the next meal,” with nut butters and 14 grams of whole grains to promote satiety.

“We partnered closely with our customer teams to understand the needs of their shoppers and provide a solution to those consumers. Through an integrated approach, we worked with customers on displays and ad features of the new items to ensure consumers are able to find and learn about the latest Nature Valley additions,” Siemienas says. “Nature Valley bars serve many needs and are consumed across several occasions. To provide solutions to our consumers, we merchandise Nature Valley as lunchbox fillers, on-the-go snacks, and energy-packed bars for after-school activities.”

Among General Mills’ other brands, Larabar offers innovation in plant-based snacking. Larabar Fruits + Greens combines fruit flavor with a quarter-cup of nutrient-rich greens in every bar. Larabar Organic with Superfoods blends fruits, nuts and ingredients such as kale, hemp seeds, turmeric and cacao nibs. Larabar Nut & Seed is a crunchy bar with a chewy texture that contains sprouted chia seeds. Each of these product lines is made with just five to nine ingredients.

Additionally, Fiber One offers Layered Chewy Bars in Salted Caramel & Dark Chocolate and Double Chocolate Almond varieties, a fiber-rich “permissible treat,” according to Siemienas.

For more about General Mills' snack bars, as well as similar products from other companies, read "Behind Cereal Bars."

In the Mix

Charlotte, N.C.-based Truly Good Foods has unveiled trEAT4u, a new line of healthy snacks built around a special set of nutritional criteria. Launching with seven flavors, trEAT4u 1-ounce snack bags meet customer demand for smaller portion sizes and a healthier option on the go.     

“We created trEAT4u directly in relation to specific requirements from some of our customers,” says Chad Hartman, director of marketing at Truly Good Foods. “We are looking forward to seeing the brand succeed not only with those customer verticals, but also to the mass market.”

Each item in the trEAT4u line was built around a 10-point nutritional criteria: a 1-ounce serving; no artificial ingredients; a short, easy-to-read ingredient list; fewer than 200 calories; 10 percent or fewer of calories from saturated fat; less than 20 grams of sugar; less than 200 milligrams of sodium; no cholesterol or trans fat; and “quality ingredients and great taste.”

Varieties encompass Almonds; Fiber Crunch Delight, a mix of peanuts, raisins, pineapple, date pieces, almonds and walnuts; Fruit Bowl, consisting of dried pineapple, papaya and cranberries; Moonburst, with peanuts, raisins, almonds and organic chocolate chips; Perfectly Fit, an omega-3 and antioxidant-rich blend of cranberries, almonds, walnuts, pumpkin seeds, cashews and blueberries; Sunshine Blend, with papaya, pineapple, pumpkin seeds, peanuts, almonds, hazelnuts, pecans and cashews; and Triple Treat, featuring pecans, walnuts and almonds.

Category Outlook

The outlook for the snacking category is going to be strong in the coming year, and likely stronger than in the previous year, according to Conagra's Thatcher Schulte, senior director of consumer insights.

“Snacks and beverages are the fastest and most convenient forms of consumption. Long-term growth in snacks is due in large part to greater experiences, a growing grasp of whole-ingredient nutrition, portability and miniaturization of solutions,” Schulte says. “The first two trends are true across the food industry and can be further defined as experiences that bring consumers closer to being culturally authentic, culinary-driven and that offer a taste exploration, while whole-ingredient nutrition gets to the consumers’ increased understanding of the benefits of individual ingredients, like being a good source of protein or other essential nutrients. The more specific snacking elements tend to provide consumers greater flexibility into all-day snacking and portion control. Both enforce the most enjoyable part of snacking, where people feel free to eat, but do not feel like they are eating too much.”

With snacks replacing many traditional meal occasions, General Mills’ Siemienas says, “Most snack categories have experienced sales growth in the past year. Over half of eating occasions during the day are now snack foods. We continue to see bars be on trend as they meet various snacking needs. As consumers move from reactive health to proactive wellness, snack bars with a wellness claim will continue to be on trend. However, at the end of the day, consumers prefer taste, so keeping taste as the key attribute will serve the category well.”

For more about snacking trends, read "Mixing it Up" in the April 2017 issue of Progressive Grocer.