By Jill Rivkin

Many people seek and find comfort in food, and snacks provide sweet and savory options to satisfy everyone. Health advocates would argue a good workout or tall glass of water would offer the mid-afternoon stress relief consumers desire, but let’s face it, many turn to chips, popcorn, pretzels, dried fruits and meat-based snacks to get them through the day. Most snacks are affordable even in tough times, and the segment offers a plethora of options for every pocketbook and taste bud.

“There are certain items that people turn to during rough economic times,” says Jim Wilsky, national sales manager at Tastemorr Snacks, Coldwater, Ohio. “Salty snacks have traditionally performed well in down times.

“Two major issues drive that,” he adds. “Many consumers cut back on other foodstuffs, but snacking is so engrained in the U.S. market that this is one of the holdouts and is viewed as a treat or indulgence. The other is that many consumers pull back from entertaining and eating out during tough times. This again makes snacks a stay-at-home natural.”

Cindy Kuester, director of sales at Axium Foods, South Beloit, Ill., agrees: “The salty snack segment has benefited from the economic downturn. More people are entertaining at home and sales numbers say they are doing so with salty snacks.”

When consumers entertain at home, snacks provide an economical and diverse product assortment to achieve any type of party atmosphere.

“The snack segment seems to be faring OK when compared to some other food segments,” says Paul Smith, director of marketing and product management, Shearer’s Foods Inc., Brewster, Ohio. “In general, snacks remain an affordable indulgence for consumers. Snacks can remain a part of people’s parties, picnics and pastimes, even in tough times. For around $5, a group of people can share a couple of bags of snacks and add a little food variety into a fun social occasion. This doesn’t necessarily hold true for many other foods.”

Talking Trends

“Snacks are a fashion category – there is nothing but change in front of us,” says Jim Wiegmann, senior vice president at Snack Alliance, Vancouver, British Columbia, emphasizing how quickly consumer tastes change with new flavor profiles, packaging and product assortment all playing a role.

In recent years, removing trans fats from snack products was the trend that made the most impact as the media covered it exhaustively, and consumers became highly educated and explicit in their desires to find healthier snacks. Major brand owners successfully reformulated without sacrificing too much taste or texture, and now products containing zero grams of trans fat are the expectation, not the exception.

Chicago’s Euromonitor reports that: “Frito-Lay successfully weaned U.S. consumers off trans fats, yet healthier chip varieties struggled to gain traction.” Products such as Baked Tostitos, Baked Doritos and Baked Cheetos saw significant growth in 2007, the firm reports, though sales had a “dramatic” decline in 2008. “These products were not successful because health-conscious consumers are no longer seeking foods which take away the ‘bad’ ingredients (such as fat, calories and sugar), but rather are seeking products with added benefits.”

Currently, the whole grain movement satisfies the desire for those added benefits in snacking. Whole grain products still are making the most noticeable mark on the segment as consumers want to snack, but also want to make more healthful choices.

“Over the last three years, consumers have become educated in the importance of whole grains, and they are interested in adding them to their diets,” Smith says. “Whole grains are an important snack food trend.”

Wiegmann points out that not only are many of today’s most popular snacks healthier, they still have one critical feature – good taste profiles.

“Some of the [whole grain] products are just fabulous, they taste really good,” he says. “They have great mouth-feel and are great carriers for seasoning profiles. You can make a snack that is good for you, but it might not taste good. Today, consumers are getting whole grain snacks that taste good so they feel better about it.”

And because there are so many snack options and the competition is fierce, brand owners and manufacturers cannot afford to put less-than-tasty snacks on store shelves. According to Euromonitor, despite the surge in gourmet and natural varieties in snacks, many of the traditional full-calorie Lay’s, Doritos, Tostitos and Cheetos products have “maintained their lead” in the sweet and savory snacks segment in the United States. “Americans stuck to the tastes they loved,” Euromonitor reports.

But that’s not to say a wider segment isn’t seeking innovation and new snacks across the wide-reaching snacks segment – as long as the product is quality, of course.

“What’s interesting is that consumers are willing to try different things today, but it’s got to be quality product in the bag,” Wiegmann adds. “You get no second chances from the consumer today. If they try it and don’t like it, the price and marketing don’t matter. If it doesn’t taste good, they’re not coming back… Consumers are incredibly concerned about their basket ring. If they’ve got $50 to spend, they’ll spend $5 on snacks as long as it’s producing a good snack.”

Snacks with whole grains have been the news recently, but an overall healthier approach to snacking has included new product introductions in natural and organic, as well as preservative-free items. But industry analysts and others foresee a new healthful eating trend affecting the snack industry in the near future – an interest in lower-sodium options (in snacks and throughout the store).

“Multi-grain and whole grain are trends, but not new ones,” Wiegmann says. “The wave-breaking trend in 2010 to 2011 will be lower sodium. Consumers have heard enough about fat and are very conscious of it, but as demographics shift to older people, the focus on sodium and its effects are going to be forefront. We have to address it in salty snacks and get out in front of the wave.”

Euromonitor, too, identifies lower-sodium products as an opportunity, albeit a limited one. “… the potential for low-sodium snacks remains limited,” according to the firm, which points out that in less than a year post launch, the Frito-Lay range of ‘Pinch of Salt’ products failed to gain traction and was discontinued.

At the Shelf

The snack segment is broad, encompassing traditional salty snacks, crackers, meat snacks, dried fruit, bars, even fresh fruit, vegetables and dairy products packaged for easy, on-the-go snacking. Ultimately, the competition is fierce to capture the consumer’s hard-earned dollars and loyalty.

And with the launch of 100-calorie packaging in recent years, everything from chips and crackers to cookies and candy, even items that may be considered decadent for a health-conscious and often dieting consumer base, are available in comfortable portions and convenient packaging. And as consumers bring food and pack lunches for work and family outings in order to help stretch their dollars, the lunch-bag convenience of the 100-calorie packaging can’t be beat. But of course this opens up an entirely new set of competitors for traditional snacks, often well outside of the main salty snack aisle in the store.

Given the competition, industry observers and a number of contract manufacturers have emphasized the need to stay in tune with what’s happening at the shelf and react accordingly, and expeditiously.

“SKU rationalization is the most important thing for [brand owners and contract manufacturers],” Wiegmann says. “Manufacturers and brand owners both want efficient SKU counts. Brand owners want big portfolios, and manufacturers want efficient products runs. And retailers want high volume and high margin. SKU rationalization is always a difficult conversation, but a necessary one.”

Similarly, Smith says shelf space is a primary concern, but also notes pricing: “Pricing and shelf space are the perennial challenges manufacturers and brand owners tackle and should tackle together,” he says. “With consumers especially focused on prices, it is critical to tackle hot pricing promotions jointly in order to maximize sales and margin.”

But it’s imperative to strike a balance at the shelf with innovation, Smith points out. “In spite of the downtown, consumers still want to see innovation at the shelf.”

Euromonitor predicts that despite the maturity in the snacks segment, there will be slight growth “as manufacturers seek to grow through higher-priced, premium and healthier products.”

“While traditional, full-calorie chips/crisps will still be king, flavor extensions, premium positioning and health benefits will remain the key value growth drivers in the very mature categories of chips/crisps, tortilla/corn chips and extruded snacks,” the firm reports.

Ultimately, snack industry observers concur that with quality, strong and consistent flavor profiles and a continued effort to provide healthier options, brand owners and manufacturers playing in this arena can be certain there’s always going to be time (and money) for snacks.