Washington — An explosion of new flavors and formats, coupled with plant-based and non-GMO claims, are propelling the pretzel sector, with these snack makers drawing inspiration from the craft brew industry.
There’s been tremendous support for small pretzel makers, notes Amy Holyk, founder and CEO of Perfection Snacks. “In 2008, there were only 1,574 breweries across the U.S. In 2020, there were 8,391.” The reason, she points out, is growing consumer demand, consumer interest in flavor diversity and ingredients and the boldness of small local brands to innovate.
Norman Cross, director of sales at Unique Snacks, concurs and further makes comparisons to the coffee sector, noting consumers’ expectations changed based on what they were exposed to at Starbucks and other coffee shops. “We’re building on the foundations of America’s favorite snacks, including pretzels, resulting in greater product diversity,” he says.
Agreeing with that is Rachel Sasser, director of marketing for salty snacks, at Campbell Soup Co., home to the Snyder’s of Hanover and Snack Factory Pretzel Crisps brands. “Today’s shoppers also desire more flavor profiles, which is why sales of flavored pretzels are growing four times faster than unflavored,” she points out, citing Information Resources, Inc. (IRI) data.
That’s not to say that consumer favorites are going anywhere, notes Justin Spannuth, vice-president and chief operation officer at Unique Snacks. “Many consumers also remain loyal to staple flavors.”
So, what is trending? Bold flavors such as jalapeno, sour cream & onion and hot buffalo wing, notes Sally Lyons Wyatt, executive vice-president and practice leader at IRI.
While an Innova Market Insights survey of consumers in 29 countries shows that cost and flavor remain the most important factors influencing buying decisions, its research also shows that plant-based and gluten-free claims are growing.
That’s good news for an ever-increasing number of ingredient-conscious consumers, says Holyk, adding that one positive result of the pandemic has been a growing awareness of the foods we eat.
“Snacking is a lifestyle choice,” points out Holyk. “Looking back to the choices made at the beginning of the pandemic to now, there has clearly been a surge of interest in soothing, familiar snacks like pretzels with healthy ingredients.”
Sasser concurs. “We’ve seen a transition from comfort eating to eating with purpose by shoppers who perceive pretzels to have a health halo,” she says, adding research by Mintel Group Ltd. reveals 78 percent of consumers believe snacking can be a part of a healthy diet and 69 percent want snacks that balance health and taste.
This bodes well for the pretzel sector. According to IRI data, omni-channel growth for the 52 weeks ending November 28 is 7.2 percent, with total sales at about $1.5 billion. Brick-and-mortar represents 92 percent of sales, recording 7 percent year-on-year dollar growth, while online sales had gains of 9.8 percent.
When it comes to demographics, sources report the newer, bolder flavors and products with plant-based, non-GMO claims are finding a receptive audience among older Gen Zers, millennials and younger Gen Xers, while baby boomers tend to be loyal to traditional flavors and products.
Whether consumers are finding products in-store or online, companies are emphasizing the importance of packaging. “It’s a powerful marketing tool because it’s what consumers interact with most directly and what they will base their final decision on at point-of-purchase,” Sasser tells Candy & Snack TODAY. “Effective package design is the result of translating brand strategies into actionable design strategies that create an emotional link to the product.”
Holyk agrees that packaging plays an important role in purchasing decisions: “Graphics and messaging need to resonate with the product’s target audience.”
She also says a variety of price/pack structures is needed to address the fragmented retail landscape, pointing out that for grocery, mass and club stores, it’s about eye-grabbing graphics, while in convenience and value channels, on-the-go packaging in multipacks works well. When it comes to ecommerce, she says it’s less about point-of-sale and more about survivorship: how well the package continues to engage the consumer after it’s been purchased.
When it comes to the future of pretzels, Cross wants retailers to know that they need to populate their shelves with both familiar and new products. “It’s the retailers that are able to stock the best of the traditional items, while making room for innovations, that have the most to gain,” he says.
At IRI, trends point to continued omnichannel sales growth, says Lyons Wyatt, as long as pretzel makers continue to innovate with pack sizes and flavors.
Finally, Sasser emphasizes the importance of using traditional media and streaming services to engage consumers, offering as an example Snyder’s partnership with Hulu that celebrated a product launch on National Streaming Day last May.
“Shoppers will continue to look for new flavors, textures and purposeful ingredients,” she says. “Meanwhile, we can tailor assets to specific moments for audiences to drive greater brand engagement.”
