Creating crunchy indulgence
From a flavor perspective, sweet and salty complement as well as counterbalance each other nicely, according to Mr. Clark.
“Flavor combinations such as honey mustard and salted caramel are natural fits,” he said. “Hot and spicy tends to match better with corn- or potato-based snacks. However, we expect to see more flavor innovation into the future.”
Pretzels also add new textures to foods in many ways.
“Anecdotally, we are seeing more emphasis on texture in confectionery, and Mars Chocolate’s launch of Snickers Crisper is a classic example of what is happening there,” Mr. Vierhile said. “Mars even quantifies the growth in the ‘crispy crunchy segment of the chocolate category’ — who knew there was such a thing?” he said, adding that it grew 9.2% between 2011 and 2014, or twice as fast as the category average, according to Nielsen data.
Pretzels also provide a crunchy texture to creamy ice cream and frozen desserts. From an indulgence perspective, enrobed pretzels compete effectively with candy, especially during the holiday season.
“We have been doing that for years, and it’s a space a lot of people are entering because it’s been growing over the past few years,” Mr. Brick said of Utz. “We were one of the early adopters. We’d love to be out there longer, but there is also a seasonality to the business.”
According to IRI, chocolate-covered salted snacks rose 17.5% to $197.1 million. IRI reported the category leader, DeMet’s Candy Co., saw sales rise 25% to $52.3 million during the past year. Marissa Foray, brand manager for Flipz, which was acquired in 2003 by DeMet’s, noted limited-time offers and seasonal items can create new consumption occasions and spark incremental sales.
New varieties also help bring consumers into the segment. At the Sweets and Snacks Expo, held in Chicago earlier this year, DeMet’s introduced a Caramel Sea Salt variety to its coated pretzel brand.
Still, it’s the old standbys that dominate this niche market.
“Like most chocolate confections, milk chocolate is the highest performing flavor segment based on its broad appeal,” Ms. Foray said. “In more niche segments and among different consumer groups, dark chocolate is gaining in appeal.”
She added that DeMet’s has turned to social media — specifically Facebook and Instagram — to promote using coated pretzels in other snacks and desserts as a part of the broader meal occasion. While gaining in popularity, the chocolate-covered pretzels segment is challenged by a lack of awareness among consumers.
“Many brands are working to drive awareness and trial in the overall chocolate-covered snacks category via 360 media campaigns,” Ms. Foray said. “One of the largest trends impacting overall snacking among other food segments is the better-for-you movement. Manufacturers are developing new products, enhancing packaging communications and evolving marketing programs to increase the relevance of their brands within this trend.”
Utz, for instance, recently refreshed its packaging to make it more contemporary and drive excitement and clarity around its product lines.
“When you stand back from a shelf, our company now makes it easier to understand what varieties we have out there,” Mr. Brick said. “We have a full line of pretzels, and we really want to show the line off well.”
Single-serve packs not only provide channel-specific sales, such as in c-stores, but also cater to grab-and-go sales.
“People are guided toward innovation in packaging,” Mr. Green said. “Resealable and small-portion packages are increasing. Small portions have been strong for years, and we don’t see it stopping anytime soon. People want one portion or two servings of snacks instead of simply snacking on a 32-oz bag. Still, those family-sized bags aren’t going away.”
In the pretzel category, a little imagination can create a work of art while a stroke of genius can result in a masterpiece. As Mr. Green pointed out, “Any innovation you can come up with is going to take off in the long run.”