While pretzels have not seen significant growth, the category earned almost $1 billion in sales in the U.S. snack market for the 52 weeks ended June 16, 2019, according to Information Resources, Inc., a Chicago-based market research firm.

Some brands have shown significant increases in sales. For example, Unique Pretzels, Reading, Pa., grew 14.9%, and its Unique Splits line reported 12.9% growth. This producer is an example of a company innovating for target markets. Another product that has found success is its Sourdough Craft Beer Pretzel Rings.

“These rings are a high-quality sourdough pretzel made with malted barley and hops and in a ring shape to fit around the neck of your beer bottle,” said Justin Spannuth, vice-president and chief operating officer, Unique Pretzels. “We have made efforts to promote the product at beer festivals by giving out samples and custom lanyards for making pretzel necklaces. Beer and pretzels, it’s a natural.”

On-the-go and proliferating snacking occasions create more opportunities for current snack options, accounting for much of the new innovation. Younger consumers in particular seek novel experiences. According to Innova Market Insights, most millennials prefer to spend their money on experiences or events than products.

“Snack availability energizes the proliferation of snacking occasions and creates more dining experiences or ‘experiential’ snacking that excites consumers and drives consumption,” said Sally Lyons Wyatt, executive vice-president and practice leader, I.R.I.

Hanover, Pa.-based Utz Quality Food’s pretzels also showed strength with sales rising 9.7% to more than $83 million, according to I.R.I. The Utz brand portfolio covers all of the major categories across salty snacks.

“Pretzels, pork rinds and cheese snacks have been extremely strong for our growth,” said Kevin Brick, senior vice-president, marketing, Utz Quality Foods.

Innovation with healthier ingredients can boost consumer interest in pretzels, as it has for other snacks. A while ago, Unique Pretzels produced a sprouted grain pretzel.

The gluten-free space may have room for growth. Last year, Quinn Snacks, Boulder, Colo., introduced a sorghum and brown rice “deli rye style,” gluten-free pretzel.

“Producers are also adding fruits and veggies to products using a wheat base,” said Tom Vierhile, vice-president strategic insights, North America, Innova Market Insights.

Campbell Snacks, Camden, N.J., is playing with pretzel innovation as well. The company recently launched a garden vegetable variety of Snyder’s of Hanover braided twist shaped pretzels.

“Our latest launch is Snyder’s of Hanover Braided Twists Garden Vegetables, which is a pretzel made with real vegetables, and it is Non-GMO Project verified,” said Hector Briones-Sanchez, vice-president of marketing, innovation, Campbell Snacks. “By carefully studying our consumer, we know that they tend to begin their day with more emphasis on healthy snacks to give them energy to start their day.”

Traditional sourdough and honey pretzels still find favor among consumers. Pretzels also are innovating with puffed snacks and unique flavors, according to an analysis of new product launches from the Innova Database.

“While pretzels have remained flat, the category may be helped with innovation of flavors and shapes,” said Bob Clark, vice-president, marketing, Herr Foods, Inc., Nottingham, Pa.

Nearly 90% of consumers said they want snacks with the flavors they prefer, according to I.R.I. snacking survey data. Traditional flavor favorites like peanut butter increased 15% in popularity this year, and combinations of cheese flavors are popular as well. Pretzels filled with these ingredients are a great way to innovate with formats and create more variety and excitement.

“Trader Joe’s has a pretzel nugget product filled with chocolate and peanut butter,” said Kara Nielsen, vice-president, trends and marketing, CCD Innovation. “Pretzel flats made big news a few years ago, and they are still popular with consumers. It was a big format change for pretzels, and it’s still a novelty.”

How consumers purchase and consume snacks is a significant driver for industry growth. Purchasing behaviors have evolved, and producers should consider not only planned and impulse shopping but also on-demand and experiential, according to I.R.I.

Unique Pretzels has targeted its packaging in order to stand out in the pretzel category. The company pushed further with the design of its Sourdough Rings, incorporating quite a few packaging design elements.

“We feel our packaging stands out on the shelf and portrays the quality we deliver in the product,” Mr. Spannuth said.

This article originally appeared in SNAC International's 2019 Official State of the Industry.