Niche snacks establish a following
March 1, 2015
by Charlotte Atchley
Small, specialized, different — all words typically describing niche snack companies and their products. They aren’t inaccurate adjectives, but neither are they negatives. Sure, there are challenges such as household penetration and product recognition, but specialty products are seeing hot growth these days as consumers search for healthier and innovative alternatives to conventional snacks.
“The consumer has always wanted to make healthier choices but weren’t able to,” said John Serieka, executive vice-president of marketing, Beanitos, Austin, TX. “It wasn’t convenient, nor was it affordable. Now with start-ups like ours, we’re offering those products to consumers.”
Overcoming the challenges of being limited in size and getting lost in the noise is all about differentiation and grass-roots marketing and, and inevitably, successfully establishing the product’s place among the mainstream snacks and winning over the conventional snacker.
“It starts with the product and how we differentiate our offering in the market,” said Cris Genovese, vice-president, marketing, Bare Snacks, San Francisco. “When you’ve got something that no one else has, by nature, it’s a niche product, but it also has room to grow.” Figuring out how to take advantage of that room is the key.
Reaching the target market
Niche products can never get off the ground without finding their target consumers. Getting the product into the hands of a progressive grocer or food distributor can help give the product exposure so that much of the growth will happen organically.
“If you get your message to the right person, it can be a very efficient way to reach your audience and grow your brand,” Ms. Genovese said. “A lot of it is just getting someone to try it. Once they love it, then growth is very efficient.”
Encouraging people to try an innovative snack from a small company with a limited advertising budget requires positioning products in front of the consumer in any way possible and leveraging the impulse buy. For Bare Snacks, the challenge has been where to place its fruit chips in the grocery store to get the most optimal exposure to shoppers.
“The consumer doesn’t know where to look for us,” Ms. Genovese said. The company’s fruit chips are often carried with other dried fruit instead of with conventional snacks or in the produce section, where Ms. Genovese observed the company has seen the most success. Being in the perimeter of the store brings high traffic, and the nature of the produce department attracts its target consumers: snackers concerned with health and searching for items that are non-GMO, gluten-free and even vegan.
“It also helps to put our product top-of-mind because niche products don’t always end up on someone’s shopping list,” she said. “You’re often an impulse purchase, so being in a location where you’re going to hit an impulse shopper rather than buried with dried fruit is a much better location for us.”
To prompt consumers to try their products, companies often conduct product demonstrations in an effort to hook the public. For Beanitos, the process is like clockwork. Knowing their bean chip fits a need for better-for-you snacks finds its target demographic of 24-to-48-year-old females, many of them mothers, at stores such as Whole Foods. “You’re talking to the gatekeeper for the family,” Mr. Serieka explained. Getting these women’s attention involves sampling the product, sometimes having other moms who advocate for Beanitos engage them, and it always ends with coupons. “What starts as conversation translates into purchase,” he said. “We know that we have someone who has wants and needs that align with that product, so when they do try it, we’ll have a loyal consumer. It’s a discovery process, not just advertising.”
Mediterranean Snacks takes the idea of bringing its products to the desired audience a step further by showing up at the events those consumers are likely attending. With a focus on health-savvy 34-to-54-year-old women, Mediterranean Snacks centers its efforts around healthy activities such as Girls on the Run, YogaFit, races or events supporting celiac foundations.
This kind of guerilla marketing may seem old-fashioned, but it fosters that feeling of discovery and a loyal following. This helps these niche brands grow organically by word-of-mouth. “They’ve discovered a great product that they feel passionate about, and they become the brand advocate for you,” Ms. Willard said. “There’s a loyalty there because they’re so happy to have found us.”
Sustaining a loyal community
Despite the low-tech strategies many of these smaller companies use to initially hook their target consumers, these emerging businesses rely heavily on the free marketing of social media to spread their message — often more effectively than the snack giants.
That consumer loyalty fostered in the initial discovery of a niche snack product has to be sustained by a community of fans, and snack companies have found the most cost-effective way to do so online through social media sites such as Facebook and Twitter.
“A lot of it is not so much about the traditional TV ads and newspaper coupons,” Ms. Willard said of Mediterranean Snacks’ marketing strategy. “It really is about building a relationship and engaging these passionate millennials and folks who are savvy about what they’re eating and let the product speak for itself.” Word-of-mouth might be a tra
dtional concept, but social media has brought it into the new millennium.
Engaging and building a community online, however, is easier said than done. The very nature of a niche product seems to make it easier, between consumer passion and loyalty and the size of the company. “Because we are smaller and more nimble than the snack giants out there, we can listen carefully to consumers and react quickly in areas like product and ingredient improvements,” Mr. Serieka said. “We can have much more meaningful conversations with our consumers as we service a constituency that is often incredibly loyal as Beanitos solves one or more of their key snack brand wants and needs, for instance, foods that are high in healthy fiber and protein, gluten-free, preservative-free, and non-GMO.”
The key to spurring these meaningful conversations, according to Mr. Serieka, is to find the commonalities between the product’s message and the consumers and then engage them there. That can mean crowd-sourcing product innovation ideas as well as answering people’s questions about nutrition and the product. “The idea is to collect feedback from the consumer and make that a part of our brand,” he said.
Mediterranean Snacks has also pursued that goal of meeting the consumers where they are and being available to them. “We try to provide as much guidance as we can when people have questions,” Ms. Willard said. “If they’re looking for items that support their diets, allergies or lifestyles, we want to be as honest and transparent as we can while having fun too.” The company’s social media sites provide space not only to answer questions but also for product giveaways and a place where the company can show support for its consumers’ favorite causes.
Leaping into mainstream
While these better-for-you alternative snacks started out on the fringes of the snack category, as consumers have become more informed about their food, these items have begun making the jump to the mainstream snack aisle. “Healthy isn’t niche anymore,” Mr. Serieka said. “It’s become a way of life for many shoppers, and their numbers are growing.”
These healthy snackers, which often includes millennials, are looking for products with ingredients they can recognize, non-GMO, gluten-free and minimally processed. As millennials begin to overtake the general shopper demographic, the snacks that meet these needs become more and more prominent. In order to cross that chasm between niche and mainstream successfully, snack producers must carefully manage their message and building awareness.
When Beanitos first started out, Mr. Serieka explained that the company had a very specific talking point for its early adopters: health. Those purchasing the product were looking for healthier options to traditional potato chips, and the crunchy bean chip answered that. As the line became more mainstream, the message became more multi-dimensional to meet the needs of conventional shoppers — not just focused on health but also taste. “This is where many products fail because they don’t evolve their messaging and identity to new users,” he said.
Mediterranean Snacks reached out to conventional snackers seriously with the launch of its Beanstalks snacks at this year’s Natural Products Expo West. While the products still resonate with the target consumer by being based in lentil ingredients, its three flavors — Cheddar, Sea Salt and BBQ — speak to mainstream snackers.
Evolving the snack’s message while remaining true to the loyal base is a delicate balance to maintain, but none of it matters if the product isn’t out there in front of the public. Building awareness and taking the next steps is something Bare Snacks has done from its roots at Pike’s Place in Seattle.
What started as a snack purchased at a farmers market moved up to the shelves of Whole Foods, then Costco, and this past year Safeway and Target stores took the brand national.
“Once you’re not just a tiny brand on the shelf at Whole Foods, it gives us another level of credibility and opens the door to the mainstream consumers in a way that natural grocers may not be able to do,” Ms. Genovese said.
Just as samples and coupons built these smaller brands in the beginning, being offered nationally at major retailers builds household penetration on a mainstream level. With that step, it’s hard to call a niche product niche anymore.