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Niche fans create following for local, smaller brewers

BY Barbara White-Sax

Craft beer is still the engine driving the beer category. Craft beer dollar sales grew 17%, while volume surged 15% in 2012, according to the Brewers Institute. Craft beer dollar share has jumped to 10.2% of overall beer category sales. Mintel forecasts that the segment will grow to $18 billion by 2017 — a result that will see the segment tripling from 2007 and 2017.

While sales of big brand brews, such as Budweiser and Michelob, continue to dip, sales of pricier smaller brands are wooing consumers with new flavors and styles. Mintel beverage analyst Jennifer Zegler said: "Unlike its domestic and imported beer counterparts, craft beer has been able to defy overall beer market trends and continue expansion during the economic downturn and subsequent slow recovery."

"Brewers big and small are delivering innovations both for premium beer drinkers, and for drinkers looking for something more upscale,"said Joe McClain, president of the Beer Institute.

Craft brewers have created a food culture niche for their products by stressing that, like wine, these beers can be paired with foods and consumers should choose different brews for different occasions.

"One of the things driving craft is its diversity. There are a huge number of styles and flavors to choose from," said Bart Watson, staff economist at the Brewers Association. "Ales, particularly IPAs, have been at the forefront of growth. Seasonal beers are another important category for craft, though they haven’t seen the same growth as IPAs over the past year." Ciders and flavored malt beverages also have seen significant growth.

Small, local brands have been a huge driver of craft growth. In fact, 78% of market share growth from 2011 to 2012 was driven by brands outside the top 10 craft producers, according to Watson. "Consumers are excited about local products, allowing craft brewers opportunities in local markets," he said. "Local growth has offered regional opportunities for many craft brewers."

Mintel research found that 50% of overall craft beer drinkers express interest in locally made beer, suggesting that retailers could benefit from including more local varieties in their mix.

Craft beers have wide appeal among younger consumers. Mintel’s recent study found that 49% of millennials and 40% of Gen Xers said they drink craft beers. "These consumers are constantly looking for new flavors and experiences," Watson said. "And current flavors may just be the tip of the iceberg, as craft brewers tend to love experimentation and innovation."

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Organic, healthy foods go mainstream

BY Barbara White-Sax

Natural and organic snacks are no longer on the periphery. The products have moved front and center as consumers look for healthier, more satiating options when they snack.

"Consumers, particularly millennials, are looking for higher-quality snacks and are renewing their interest in natural foods," said Shelley Balanko, an analyst at Hartman Group. Natural, she said, means fresh, less-processed foods with a recognized ingredient list. "Consumers want more from their snacks. They want nutritionally-dense foods that are satiating," she said.

Sales of natural and organic snacks are outpacing the industry average. "Overall in 2012, the snack industry grew 4.4% in dollar sales," said Sue Viamari, editor of IRI’s Times and Trends report. "Organic food dollar sales increased 7.9%, and natural food sales were up 9%.

"Viamari said 22% of customers said they are looking to increase their consumption of natural and organic foods, and 26% said they are actively seeking natural and organic solutions. That percentage skewed even higher among millennials.

"Our studies show that millennials, who are struggling the most financially, are still looking for natural and organic solutions, which are often more expensive," she said. "That says something about how much they value natural and organic attributes."

Younger consumers also have global tastes and are willing to experiment. Balanko said consumers are open to such legume and alternative, grain-based snacks as baked chick pea and baked lentil chips or falafel chips, as well as such veggie-flavored snacks as kale chips and brussels sprout chips that pack a nutritional punch.

Since satiation is such a huge trend, nut snacks have grown in popularity, and more manufacturers are introducing nut clusters and bars. IRI recently named Kind bars as one of its Product Pacesetters.

Greek yogurt continues to be embraced by consumers as an anytime snack. Sales of natural/organic hand-held sandwiches and snacks are also up, representing another opportunity for retailers. "We’re also seeing consumers turning to nontraditional categories for snacking, such as Starbucks bento-box snacks that include a hard-boiled egg, cheeses and fruits," Balanko said.

Retailers still should be grouping natural snacks in one section, according to Viamari. "Consumers definitely want to see the products in one section, since they are looking for retailers to help them make choices and make it easier for them to find what they are looking for," she said.

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Chewy meets crunchy

BY Barbara White-Sax

NEW YORK — Kind Healthy Snacks recently introduced Kind Healthy Grains Bars, a line of chewy with a crunch granola bars made from five super grains mixed with ingredients like pumpkin seeds, toasted coconut flakes and dark chocolate chunks. Each Kind Healthy Grains bar packs one full serving of 100% whole grains, which help to keep people fuller, longer. The bars, which are gluten-free, are available in five flavors and can be sold individually or in a box of five bars in single flavors. The suggested retail price for a bar is $1.99.

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