Once in a blue moon, the stars almost perfectly align, and that certainly seems to be the case for the snack food industry in 2015. While a slowly burgeoning optimism has been building for the past few years, snack manufacturers now seem freer to express a greater confidence in the future as snacking has become almost a cultural phenomenon that’s being driven by millennials — and the pundits — and embraced by almost every other demographic group as well.
Definitely, the sun is shining on the snack food market.
“It’s a positive time for the industry,” Carl Lee Jr., president and chief executive officer of Snyder’s-Lance, Charlotte, N.C., told Snack World recently. “We’re all living busy lifestyles and living on the go and that’s not going to change.”
Snack Food Association (S.F.A.) members have good reason to feel better these days as the seeds of the snacking evolution continues to take root in a way that may affect the industry for years to come. Consumers are eating more snacks and smaller meals throughout the day — from three up to five or seven, according to experts. That’s an observation not lost on S.F.A. members.
“Snacking habits are evolving to meet the hectic pace and structure of consumers’ daily lives,” observed Dan Morgan, chief sales officer, Snyder’s-Lance and chairman of the S.F.A.
“Research shows that sitting down for traditional meals are becoming a routine of the past, and snacking throughout the day is now considered an acceptable, convenient alternative,” he said. “Now only 38% of Americans eat three meals a day, compared to 2010, when 66% of them did. And today, more than half of Americans eat more than three snacks a day, compared to 2010 when only 21% of them did. So, today, we can truly say snacking is part of life.”
Scott Carpenter, president and c.e.o. of Savor Street Foods, Wyomissing, Pa., described it in another way. He said consumers have adapted “a tapas” mentality, preferring to eat smaller, lighter meals and snacks that offer a wide variety of culinary experiences throughout the day. More healthful, gluten-free and more wholesome options, he added, nicely complement this lifestyle.
It doesn’t matter if it’s morning, afternoon or late in the evening, a greater number of consumers — especially millennials — are snacking throughout the day, said Daryl Thomas, senior vice-president of sales and marketing at Herr Foods, Nottingham, Pa. He cited several presentations at SNAXPO 2015, held in Orlando, Fla., that documented and confirmed S.F.A. members’ previous anecdotal observations on how millennials are in the drivers’ seat when it comes to changing snack behavior.
“It’s said that baby boomers have breadth, but millennials have the depth,” he said.
Overall, the traditionally bifurcated snack market has been transformed into a single movement. Historically, the industry defined itself as one strong, segregated group of core snacks — chips, pretzels, pork rinds, cheese snacks, popcorn, to name a few — and another unwieldy realm of portable and convenience foods.
In recent years, however, the emerging prevalence and blossoming popularity of extended snacks — vegetables, fruit, yogurt and even sushi — created a broader, evolutionary and more inclusive and cohesive snacking occasion as consumer consumption patterns progressed into unanticipated new boundaries.
Consequently, snacks have transformed into a diversified and differentiated market that offers both indulgent and fun products for pure enjoyment as well as healthy alternatives as a part of a balanced diet. That’s an observation that William “Chip” Mann, president of Pretzels Inc., Bluffton, Ind., takes to heart.
“You have to look at what’s real — not what’s perception,” he said. “You have to look at not only just one product but also what people consume in their entire diet.”
Scott Green, Pretzels Inc.’s vice-president of marketing, suggested the broader definition of snacking is changing perceptions of not only consumers but also retail and food service customers.
“The rebranding of snacking has helped us as an industry,” Mr. Green said. “We see opportunities today in different aisles of the store. We’re now in the refrigerated section next to cheese dips and hummus dips. People are snacking on different things throughout the day, but they still want savory products — just not in large portions in front of a television at night. We’re finding that retailers are becoming more conscious of clean seasonings instead of artificial. We find that we’ve been able to adapt to it. By doing so, we find ourselves in more areas of the store than we ever have.”
As a result of this transformation, there seems to be a sense of urgency for S.F.A. members to seize the moment.
“The snack industry is exploding with new ideas and companies,” said Michael Sands, executive vice-president of snacks at B&G Foods, Parsippany, N.J. “Everyone sees the excitement in the category. Convenience and health are driving this growth, but those companies and products that differentiate themselves, those that stand out, those are the ones that will succeed. It’s an exciting time to be in snacks.”
B&G offers multipacks to respond to the explosion of on-the-go business and Greek yogurt-covered pretzels to offer something different.
“We don’t want to just launch ‘me too’ products,” he said. “For example, we just changed our New York pita chip. We made it stronger so it didn’t break under the weight of a dip anymore. We differentiated it from other pita chips in that way. We’re in the natural snacks category with Pirate’s Booty. We’re in finger foods and the bar category. Snacks used to be an indulgence category, but now it’s where you get your nutritional needs met.”
Joe Papiri, vice-president of sales and marketing at Snak King, City of Industry, Calif., suggested the industry is trending toward more wholesome, clean label and simple ingredients. Snack manufacturers now search for ways to develop healthier snacks that taste good, which he described as “the incubator of new ideas.”
“Functional elements like chia seeds, omegas, flax, organic and whole grains continue to be big and even bean pulses are now generally accepted as long as they’re part of a great-tasting product,” Mr. Papiri said. “We just came out with a bean snack that has 5 grams of protein per serving, and it’s baked so the fat is lower than regular chips. We’re also doing a lot with olive oil — the healthier fats are big. Avocado oil is all over the place. It’s more expensive, but it’s sexy, it’s cool. We have a bean chip; it contains an extruded bean. We also do lentil, red lentil, garbanzo, pinto and chickpea products.”
Mr. Morgan pointed out that Snyder’s-Lance created a new snack food division called Clearview Foods, which will focus on developing innovative and “better-for-you” snacking options.
“Clearview Foods will concentrate its efforts on growing the Snack Factory Pretzel Crisps, Eat Smart and Late July Organic Snacks products,” he said. “With this new division, Snyder’s-Lance is in a stronger position to satisfy our consumers’ desire for healthier snack choices that deliver on taste and quality.”
S.F.A. members also are rolling out limited-time offerings to add excitement to the market and adapt to the philosophy that many products just have a shorter life expectancy among consumers constantly searching for something new in the snack aisle.
“We, like many other companies, are changing our flavors more often,” said Fritz Kohmann, chief financial officer at Shearer’s Foods L.L.C., Massillon, Ohio. “We may introduce a flavor or group of flavors that may be sold for a short period of time. You can rotate them seasonally and you don’t have to offer them every week for the next year. We’re trying to do things that are new and exciting and get a lot of trial. This is one of the main trends that we have been focusing on.”
As a contract manufacturer, Rex Parrott, president and chief operating officer at Wyandot, Marion, Ohio, often gets a broader view of the market, and he views the industry moving in the right direction.“We’ve now seen for four years in a row a consistent stream of new ideas, people innovating with ancient grains, gluten-free, organic or other healthier items that right now have continued legs on them,” he said. “In many cases, our customers are looking for baked products. Extruded products have a higher degree of interest right now with some innovative flavorings such as fruit. Business is good.”