09Apr2011
Snacks and Apples Bounce Back
As the economy goes, so goes the frozen appetizers/snack rolls category. While supermarket sales of the category were down in units and dollars for the 52- and 12-week periods ended Feb. 20, there may be light at the end of the tunnel.
It’s important to look at the most recent four-week data, which show category sales gains in units and dollars, points out Bryce Ruiz, president and CEO, Ruiz Foods, Inc. (www.ruizfoods.com), Dinuba, Calif. “Perhaps the economy has a brighter horizon,” he says.
FOOD PRIORITIES Part of the reason for the softness in the category is that basic foods have to come ahead of appetizers and snacks in this economy, says Stephanie Hernan, owner, Yankee Trader Seafood (www.yankeetraderseafood. com), Pembroke, Mass.
Frank Benso, vp, Great American Appetizers (www.appetizer.com), Nampa, Idaho, also believes that consumers are putting their attention on the core staples. He says that the 12-week period ending Feb. 20 includes the year-end holiday season, a time when budgets were tightest.
Category dollar sales in supermarkets were down 2.2% to $271.5 million and units were off 2.6% to 75.3 million in the 12 weeks ended Feb. 20 compared with the same year-ago period, according to Chicago-based market research firm SymphonyIRI Group.
Shoppers are being more picky as they look for options with both great taste and a better-for-you nutritional profile, says Tracey Parsons, spokesperson for Heinz North America (www.heinz.com), Pittsburgh.
To meet this demand, Heinz recently launched a variety of new frozen items, including Bagel Bites with whole grain, Ore-Ida sweet potato fries, and new bowl products that are like a burrito, but unwrapped without the tortilla, under its Delimex brand. The new bowl items contain seasoned rice, strips of beef with creamy chipotle sauce or white meat chicken with cheese sauce.
Timely displays and themed events can drive increases in sales and profits for retailers, according to Ruiz. “Similar to salty snacks, frozen snack and appetizer sales are impulse buys. Displaying this category during a higher incidence of party/sporting event times (such as March Madness, Super Bowl, Daytona 500) will help increase category sales,” he says.
MORE MAINSTREAM
Most manufacturers say that retail space for the category is about the same today as it was three years ago. What has changed, according to Ruiz, is that more space is being dedicated to “international” manufacturers that offer Hispanic and Asian varieties. “It appears that both of these food choices are becoming more mainstream American. In addition, with the low price per ounce for frozen burritos, coupled with current economic conditions, many families are purchasing them as a ‘center of the plate’ dinner or lunch item, complementing rice and beans as sides,” he says.
Houston-based Windsor Foods (www.windsorfoods.com) is now more of a factor in the category with the completion in February of its acquisition of Discovery Foods, Hayward, Calif., manufacturer of frozen Asian snacks, appetizers and entrees under the Ling Ling and Tai Pei labels.
“We are excited about this strategic transaction, which expands our presence in the Asian frozen food market,” says Greg Geib, CEO of Windsor Foods.
Laura Grenmyr, brand manager, Kahiki Foods, Inc. (www.kahiki.com), Gahanna, Ohio, encourages retailers to consider Asian doors to cross-merchandise Asian-style snacks such as spring rolls and egg rolls with Asian single- and multi-serve entrees. The company recently introduced spring roll bites in two flavors — chicken and buffalo-style chicken. “Ideas often filter down from restaurants to retail and consumers are open to foods they are seeing in their favorite restaurants,” says Honey Konicoff, vp-marketing, Phillips Foods, Inc. (www.phillipsfoods. com), Baltimore.
“Flatbreads are a perfect example of this — a product that has been proven in restaurants across the country. It is invading the grocery stores now in many departments from pizza to the bread aisle and now to seafood,” she notes. Phillips launched three seafood flatbread varieties in February — bourbon BBQ shrimp, Chesapeake crab, and asiago and artichoke crab.
DOWNSIZING TREND
“Small plates continue to be popular in foodservice settings and consumers are looking for the same type of variety at home, instead of a large meal consisting of an entree and side items,” says Chris Collias, CEO, Goodwives Hors D’Oeuvres (www. goodwives.com), Wilmington, Mass.
Collias believes that retailers are recognizing the shift towards small plates and smaller meals and have begun to merchandise frozen appetizers/ snacks accordingly. “Instead of focusing on party items for the holidays, retailers have begun focusing on appetizers/snacks that can be sold year-round as meal alternatives or meal solutions,” he says. Many consumers have opted for small gatherings rather than large get-togethers, according to Michele Adams, marketing director, Cuisine Innovations LLC (www.cuisineinnovations. com), Lakewood, N.J. “The traditional 100-count assortments that cost $17.99+ are not only expensive but too many pieces for today’s party size. As a result, the lower-price, smaller-count assortments are more attractive,” she says.
“Retailers should position appetizers as a fourth meal or anytime food. The younger generation has shifted to a grazing style of eating. At the same time, small bite-size versions appeal to lone diners and couples. There is a fine line between appetizers and entrees. Today’s consumers eat appetizers as meals and have adapted this mentality to home living,” says Adams.
Cuisine Innovations recently introduced kosher assorted gourmet snacks in a 48-count package under its Cohen’s brand and a 32-count non-kosher package under its Simply Cuisine brand.
Ric Alvarez, president and CEO, Frozen Specialties, Inc. (www.frozenspecialties.com), Holland, Ohio, says that consumers are looking for foods that will satisfy their hunger until their next regular meal and foods that they can enjoy when they relax and have fun.
ONE-STOP SOLUTION
Because retailers have so many product options they are strategically working with their customers to be viewed as their one-stop solution for frozen appetizers and snacks, says Alvarez. Some of the ways that retailers are doing this is by reducing duplication in the category, maintaining proper segment space allocation, remaining committed to long-term private brand development, and driving category awareness and profitability by promoting products during times of increased purchases, such as “March Madness” and the Super Bowl.
Frozen Specialties recently introduced three Mr. P’s Pizza Bites: cheese, combination (sausage and pepperoni), and pepperoni, as well as two new private label Pizza Bites flavors — nacho jalapeno and buffalo chicken.
Consumers are looking for higher quality products that contain real ingredients, says Patrick Conway, president, Mr. Dee’s, Inc. (www. mr-dees.com), Libertyville, Ill. The company is launching a 38-ounce potato skin club pack that has real cheese and nitrate-free bacon under its DeeAmoré label and cheezy taters, a 40-ounce club item that has shredded potato on the outside and cheese and bacon on the inside, under its Mr. Dee’s label. A jalapeno sliced in half and stuffed with cream cheese and wrapped in bacon in a 24- or 30-count bag is in the planning stage.
Several manufacturers say that they have seen a big increase in the demand for private label appetizers and snacks. Retailers are wanting core items with a twist under their own labels, says Great American’s Benso.
But Totino’s Pizza Rolls, the category’s top-selling brand, continues to score strong increases. Matt McQuinn, marketing manager of the brand (www.totinos.com) of Minneapolis-based General Mills, says that some of the factors driving Totino’s growth include strong consumer investment, offering multiple sizes to attract different buyers and focused Hispanic marketing efforts.
Consumers are looking for convenient, great-tasting snacks with minimal preparation and clean-up time, according to McQuinn. “They also want to see variety in flavors and sizes. When kids come home from school they want a tasty, quick snack that they can prepare themselves,” he says.
