Sales are on fire (even units are up), but new plant-based offerings could take the category even higher. Smart promo practices are
Snacks and mini meals have been gaining momentum for years. But consumers working and learning from home — where the kitchen is often only a few steps away — are helping speed up the shift from well-defined mealtimes to all-day snacking. In fact, sales of frozen snacks and handheld entrees shot up 9.8% and 16.6%, respectively, during the 12 weeks ended Dec. 26 (versus the same period a year ago), significantly outperforming the frozen department as a whole, reports Chicago-based market research firm IRI (iriworldwide.com).
‘It’s a perfect time for retailers to keep some margin.’
Volume and unit gains weren’t nearly as impressive, highlighting some pretty significant inflation in the category. But other factors are driving up prices as well. For example, reports Meade Bradshaw, national sales manager at Moonachie, N.J.-based Bylada Foods, more consumers are opting for bigger packages so they can limit trips to the supermarket while COVID rages on — but also so they always have snacks on hand. And to borrow a phrase from “Field of Dreams”: If they have it, they will eat it.
But perhaps a bigger driver of price increases is consumers’ growing appetite for higher-quality snacks, apps and handhelds. For example, sales of premium burritos are up 30%, according to Joe Bybel, senior vp and general manager of the retail business unit at Dinuba, Calif.-based Ruiz Food Products, maker of the El Monterey brand.
PLANT-BASED INNOVATIONS STAR
While many product launches have been put on hold as manufacturers struggle to keep up production of current items, growing demand for plant-based is prompting many companies to move forward with new vegan and vegetarian items. For example, Ruiz Foods recently debuted a new brand, Plantivore, described as “100% tasty with 0% meat.” The first products out of the gate are a Chick’n Burrito and a Stea’k Burrito, both made with real cheese. Compared to what’s historically been available, says Bybel, “They significantly elevate what consumers can expect from a meatless burrito.”
Raising the bar on plant-based is also the goal of Chicago-based Cool Beans, says COO Mark Doskow, citing “a lot of highly processed food tech in the plant-based space.” Prior to the brand’s initial launch, “There was a lot of fake meat and fake cheese at a time when consumers were asking for clean, simple ingredients that are minimally processed. Cool Beans is our answer to that demand.”
The company recently added two new flavors to its plant-based, clean label wrap collection: Sesame Ginger and Tuscan Basil. “East Indian and Italian…consistently test as two of the most popular [ethnic flavor profiles] with consumers,” says Doskow, highlighting growing demand for bolder, international flavors, especially among millennials and Gen Z.
Another company making its mark in the better-for-you plant-based wraps space, Los Angeles-based
SANA Foods recently debuted what it says are the category’s first grain- and legume-free frozen burritos. Intended as an alternative to classic rice and bean burritos, the healthy handhelds feature cauliflower rice and breadfruit wrapped in a sustainably made coconut flour tortilla. Both vegan and paleo, they come in Traditional and Fajita varieties.
‘If retailers are going to create a display, they should also order much more than in the past because it will get wiped out pretty quickly. And what good is a display if it’s half empty?’
The elevated plant-based trend is also coming to the bite-size segment where Montreal-based Oggi Foods recently reimagined one of consumers’ favorites — pizza rolls — as a gluten-free vegan snack featuring a cauliflower crust, vegan mozzarella and Beyond Sausage Italian Crumbles. “These better-for-you snacks can be enjoyed by everyone, regardless of dietary restrictions,” say co-founders Joe Turturici, president, and Stefano offer the same one this year, he explains. “Because times have changed.” A better approach is to maintain promotion frequency but not go as deep, says Bradshaw, who believes frozen snacks aren’t as price-sensitive as staples like milk and meat. “So it’s a perfect time for retailers to keep some margin.”
One thing not to do: accept lower quality in order to reduce costs. “From raw materials to packaging to transportation and logistics, every aspect of production has increased,” say Turturici and Castaldo. “So companies have no choice but to raise the cost of their products.” While it may be tempting to cut corners in order to keep costs down in the short term, doing so can do lasting damage to the category, they claim.
A better way to meet the needs of consumers seeking better value is to expand private label offerings, says Bradshaw. “If you don’t have a good, solid private label program, you’re losing sales because national brands are struggling to keep products on the shelf” and consumers have never been more open to alternatives.