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Snack category innovations help carry sales

BY Barbara White-Sax

Higher costs will no doubt affect snack sales this year, but industry experts said there’s still market potential for innovative new products and healthy offerings.

“There have been a lot of successful new introductions,” said Sheila McCusker, editor of Information Resources Inc.’s Times & Trends research reports. While newness can help products make a splash in the market, McCusker said consumers will still be watching prices carefully when shopping all grocery categories. “Innovation is critical, but affordable price points will be absolutely critical as well,” she said.

Innovation frequently means better-for-you snacks. “Consumers still care about good health when it comes to snacking,” McCusker said. “Healthy, better-for-you products have been starting to show a return,” said Jim McCarthy, president of the Snack Food Association.

“Baked potato chips have been very well received of late,” he added. “These products have been on the market for years, but we are just starting to see the promise.” Since potato chips represent $2.6 billion of snack category sales, products with lower saturated fat profiles can continue to buoy the segment.

“Frito-Lay has been on the forefront of removing transfats from their products and replacing them with healthier oils, such as sunflower oil,” McCarthy said. Snyder’s of Hanover recently introduced sunflower chips made with sunflower seeds and cooked in sunflower oil.

“Low or no salt products are gaining popularity,” McCarthy said. Frito-Lay recently introduced Pinch of Salt, a lower sodium line of products within the Lay’s Tostitos, Fritos and Ruffles brands.

“Utz Snack Co. has done well with its no-salt products, and Frito-Lay has gained share in that segment, as well,” he said.

Whole grain products—and popcorn—are other areas of growth as consumers look for products with better nutritional profiles. “Everyone has turned the heat on the whole grain side of the business. It’s a segment that has really taken off,” McCarthy said. “Per serving, these whole grain products deliver more nutrients.” He cited Herr’s as one manufacturer doing a lot with whole-grain pretzels in such flavors as pumpernickel rye and honey wheat.

As a segment, nuts also continues to grow. “We should expect to see more snack mixes with positive benefits,” McCarthy said. Kraft has had success with its Planters NUTrition brand of snack nuts specifically blended to meet nutrition and wellness needs. “It’s been a revelation that no two fats are alike, and there can be benefits to certain fats,” McCarthy said.

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Wrigley turns to Tribal DDB to help promote its U.S. brands on the Internet

BY Jenna Duncan

NEW YORK Reports said Thursday that Wm. Wrigley Jr. Co., the maker of chewing gums such as Eclipse and Orbit, has named Tribal DDB Worldwide as its partner to expand promotion of its brands on the Web.

New York’s advertising company, Tribal DDB Worldwide (an arm of Omnicom Group’s DDB Worldwide), specializes in building and growing online digital campaigns for international clients.

In April, Mars and Wrigley announced a merger to form the world’s largest confectionery company. Mars bought out shares and the Wrigley business for $23 billion. Part of the deal was funded by Warren Buffett’s Berkshire Hathaway company.

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After Special K success, Kellogg may spend more on online marketing

BY Jenna Duncan

CHICAGO Kellogg Co. has said that since its Special K brand marketing has been so successful on the Internet that it could put more advertising dollars towards its online presence.

Company officials have described the effect of online messaging as “obviously very encouraging,” and hope that the marketing of breakfast cereal Special K will “drive stronger adoption across the business.”

The latest campaign for Special K calls for consumers to take “the Special K challenge”—that is, to eat at least two bowls of Special K cereal per day. Dieters are encouraged to do so for a few weeks in order to drop a full clothing size.

In 2007, Kellogg spent more than $1 billion on advertising. The company said that it will spend even more this year, including an extra $300 million specifically earmarked for promotional marketing. In the course of the past year, Kellogg has been credited with maintaining its advertising spending, despite fiscal challenges from a limping economy and skyrocketing commodities costs.

On the Web, one Special K site helps dieters by providing specialized meal planning. There are also sign-up fields for a Yahoo e-mail group, workout tips from a personal trainer, advice from a nutritionist and a link to Amazon.com.

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