Organic, healthy foods go mainstream
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.
Chewy meets crunchy
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.
Consumers sip healthy alternatives to sugary drinks
The future of the beverage category is in low- and no-calorie drinks. Consumers have been forsaking traditional sugary beverages in favor of healthier alternatives. Statistics from the American Beverage Association show that the average calories per serving from beverages has dropped 23% since 1998, and the number of calories in the American diet from added sugars in soda has fallen 39% since 2000. Sales of traditional carbonated beverages also have been sliding.
About one-third of Coca-Cola’s North American sales volume is now generated from low- and zero-calorie drinks, including Diet Coke and Coke Zero. Category leaders have been rolling out new lower-calorie versions of old favorites. Pepsi Next has 60% less sugar than Pepsi, and Mountain Dew Kickstart contains only 80 calories versus more than 100 for Mountain Dew. Dr Pepper Ten and 7UP Ten are Dr Pepper Snapple Group’s 10-calorie versions of the classic brands.
Manufacturers are tempting consumers with new sparkling beverages. Honest Tea’s Honest Fizz, sweetened with organic stevia and erythritol, has been a hit since its introduction in early 2013. The product, the company’s first foray in the carbonated space, is being rolled out nationally. "We thought there was a need for a naturally-sweetened, zero-calorie carbonated beverage that tasted good, and the Honest Fizz has exceeded expectations," said Joanna Seiden, a spokeswoman for the company.
Hint goes even further with its unsweetened flavored sparkling water, Hint Fizz, introduced last year. Like the company’s still waters, the beverages are unsweetened and flavored with natural fruit skins and oils. The company also is introducing new flavors and sizes this summer. "People don’t like the aftertaste of sweeteners," said Kara Golden, Hint’s CEO. "We believe that unsweetened products are where the category is headed."
Consumers also are looking to non-carbonated beverages for lower-calorie hydration, and manufacturers are happily serving up alternatives. Honest Tea is testing an Unsweetened Lemon Tea in the New York City market now, with national rollout planned for the fall. "We think there’s room in the mainstream market for unsweetened products," Seiden said.
Even the water category is seeing action. Glaceau’s Smartwater has created a niche with its focus on electrolytes, and Whole Foods is giving a lot of play to its private label electrolyte water introduced under its 365 brand. Nestlé Waters North America recently introduced a new brand of still water called Resource. In its ads for the new brand, Nestle is playing up the "100% naturally occurring electrolytes" in the still water, boasting that the beverage is "more than hydration, its total electrolytenment."