Although unit sales were down 1.8%, the category is outperforming the frozen department, thanks to increased promotional support and more ethnic and better-for-you options. Air fryers are helping, too!
Thanks to what one manufacturer referred to as an “imperfect storm” of cost increases on everything from flour to freight, dollar sales of frozen snacks and apps jumped 12.5% to $897.92 million during the 12 weeks ended March 26. Still, unit sales fell only 1.8% — way less than the 5.7% loss registered by the frozen department as a whole, reports Chicago-based market research firm Circana (circana.com), formerly IRI and The NPD Group. And if you remove pretzels and breaded veggies from the equation, unit sales were down less than a percent.
MULTIPLE GROWTH DRIVERS
“It’s kind of shocking, really, given such significant price increases,” says one supplier. But a closer look at the data reveals a big jump in volume sold with merchandising support (+10.5 points to 25.6%), which probably helped drive some of the growth. In fact, three of the four top 10 brands with double-digit increases in volume sold with merchandising support (Farm Rich, José Olé and Kraft/T.G.I. Friday’s) also saw their unit sales rise — Farm Rich and José Olé by more than 25%. (They also probably did a better job than competitors at keeping the shelves full since supply chain issues remain a challenge for some.) But manufacturers say the category owes its success to more than just merchandising support.
The category is also getting a boost from the growing popularity of air fryers, which are becoming a must-have appliance, similar to microwaves.
“The two things we continue to hear from consumers is that they’re busier than ever so convenience is still very important. But dining out is expensive, so they’re also eating at home more,” says Meade Bradshaw, national sales manager at Moonachie, N.J.-based Bylada Foods. Combine that with a continued shift from strictly defined mealtimes to anything-goes, all-day snacking, and frozen snacks and apps come up a winner, he says.
Beyond that, “Snacks have evolved into more than just snacks,” says TrueMan McGee, founder of Milwaukee-based Funky Fresh. For example, he explains, consumers will often heat up a couple of the company’s non-traditional spring rolls and eat them for lunch or dinner either alone or with a side dish or two. “Dinner doesn’t look like it used to,” says McGee.
Once known mostly for heavily processed, deep-fried products, the category is also benefitting from the increasing availability of better-for-you frozen snacks and apps, which is bringing new users to the set. “In the past, people who wanted to eat healthy generally had to prepare and cook their food [from scratch],” says Braelyn Davis, president, CEO and co-founder of San Diego-based Planet Based Foods. “It’s always been much easier to eat ‘junk food’…because it was available already prepared or in easy-prep formats.” Now, however, it’s easier to find convenient better-for-you products as well, including frozen snacks and apps.
The category is also getting a boost from the growing popularity of air fryers, which McGee says are becoming a must-have appliance, similar to microwaves. Breaded snacks and apps in particular cook up really well in air fryers, emerging with a crispy, crunchy exterior, which makes consumers more apt to buy such products. As a result, many private label manufacturers have been asked by retailers to follow the lead of some national brands and add air fryer cooking instructions to their packaging.
PRIVATE LABEL DELIVERS AFFORDABILITY
Given the state of inflation, private label sales are growing across the supermarket, as cash-strapped consumers look for ways to cut costs without leaving their favorite categories. Frozen snacks and apps are no exception, evidenced by a 1.2% increase in unit sales. What’s interesting, though, is that store brand volume tumbled 8.5%, suggesting that retailers are downsizing private label packages in order to maintain more affordable price points. That’s exactly the opposite of what happened during the pandemic when volume outpaced units as consumers opted for large, value-size packages.
“Retailers are definitely playing with the counts, maybe taking a piece out to make sure prices don’t get crazy,” confirms Steve Silverman, vp of sales and marketing at The Fillo Factory, Northvale, N.J. But low prices aren’t the only reason consumers are choosing private label snacks, he says. First of all, the quality is better than ever — though Silverman wishes retailers would emphasize that more in their communications with customers (more on that later). Second, many chains are offering unique frozen snacks and apps that shoppers can’t buy elsewhere, building customer loyalty in the process. So while private label is often the most economical option, it’s got a lot more going for it, says Silverman.
‘Retailers put so much effort into ensuring the quality of their private labels — and then they just let it go. They really need to communicate the quality of their products to consumers. They need to tell their story, not just their price.’
What kinds of products are leading-edge retailers adding to their own brand programs? Ethnic is a “huge trend,” reports Silverman, noting the popularity of empanadas and rangoons in particular. But what’s really resonating is ethnic fusion, i.e. ethnic snacks that feature more familiar flavors or fillings (think Buffalo chicken empanadas or Philly cheesesteak spring rolls), so they’re more accessible. But even classic appetizers — spanakopita, mini quiches and pigs in a blanket — can deliver an unexpected twist, says Silverman, citing The Fillo Factory’s Coney Island Dogs (a mini hot dog, sauerkraut and mustard wrapped in puff pastry) as an example.
ETHNIC FUSION A HIT WITH CONSUMERS
Ethnic fusion is also taking hold on the national brand side where Boston-based MingsBings is adding Pizza and Cheesesteak varieties to its line of traditional Chinese pockets (“bings”) this summer. (Other varieties include Original Veggie, Fiesta, Buffalo Cauliflower, Cheeseburger and Sausage & Peppers, all plant-based and allergy-friendly). “It’s true East meets West,” says Chef Ming Tsai, the company’s founder. Featuring the brand’s proprietary brown rice wrapper, the newcomers are made with Before the Butcher proteins and Violife plant-based cheese, supporting the company’s mission to help consumers “eat good, feel good, do good.”
Another company offering a uniquely American twist on a traditional ethnic product — in this case, spring rolls — Funky Fresh is also committed to creating healthier frozen snacks. Already being tested in 200 stores in Wisconsin and Illinois (though a national rollout is expected in early 2024), its collection includes four hand-rolled varieties all made with a short list of fresh, whole ingredients: Buffalo Chicken & Kale, Chicken + Broccoli Mushroom, Chicken Club and vegan Sweet Potato + Black Bean.
“Customers can see the chopped up kale and jalapenos, so they understand exactly what they’re eating,” says Jasper Fallucca, director of business development at Milwaukee-based Palermo’s Pizza, which is working with Funky Fresh to bring their product to market. “That’s a huge value-add.”
In addition, says McGee, “While many competing products are deep-fried, Funky Fresh Spring Rolls are not, so consumers can prepare them in a healthier way, including air frying.”
While fusion is a popular strategy for bringing ethnic products to market, other global food manufacturers are adapting their products in different ways. For example, Chicago-based AYO Foods is taking traditional West African meat pies and turning them into bite-size snacks (known as “small chops” in Nigeria) that better resonate with U.S. consumers, reports company co-founder Perteet Spencer. “We took those familiar [West African] flavors and added our own twist,” she says.
PLANT-BASED SNACKS STILL IN DEMAND
Although the plant-based meat category has seen some pretty steep declines after too many new players entered the space too fast, manufacturers say there’s still plenty of demand for plant-based snacks, apps and handhelds. “Consumers are looking for healthier, plant-based foods that are also convenient,” which are not always easy to find, says Davis of Planet Based Foods, which will debut the “first and only” plant-based burritos made with sustainable superfood hemp this summer. The soy-free, non-GMO, vegan handhelds are made with a hemp-based crumble rich in omega fatty acids, protein and complex carbohydrates; pea protein; brown rice, Violife dairy-free cheese; and other whole plant ingredients, says Davis. Available flavors are expected to include Fajita, Barbecue, Cheesesteak Style and Breakfast.
“Consumers can feel good about [eating] them because they’re better for the planet, too,” he adds. “Hemp is a climate-friendly food because it requires less water than traditional crops, regenerates soil and filters carbon dioxide from the air.”
Another plant-based frozen snack maker committed to making Earth-friendly products, Toronto-based Wholly Veggie is adding a Truffle flavor to its line of dairy- and gluten-free mozzarella sticks featuring an upcycled cauliflower crumb coating. “We have enjoyed a lot of success with our original dairy-free mozzarella sticks because we’re speaking not just to vegan consumers but dairy-free consumers, too,” says Wholly Veggie co-founder Johnathan Bonnell. “Together, they’re a big portion of the population. Plus, it’s a product that everyone feels good about.” That’s one reason why he’s so bullish on merchandising plant-based snacks like Wholly Veggie’s in the mainstream frozen snacks and apps set, not in the plant-based door. “We want to speak to a broader swath of consumers.”
More new plant-based snacks are expected this summer from Lawrence, Kan.-based Hilary’s Eat Well, part of the PlantPlus Foods family. The gluten-free, non-GMO Hilary’s Prime Plants collection includes four superfood-rich, veggie-forward SKUs: Mediterranean Beet Veggie Poppers, Chickpea & Curry Veggie Bites, Super Mushroom Veggie Patties and Sundried Tomato & Spinach Fritters, all free of 12 common allergens.
Another new allergen-free snack comes from Fargo, N.D.-based SunButter, which is launching “school-friendly” crustless, nutless sunflower butter and jelly sandwiches. Described as a healthier version of the top-selling frozen PB&J brand, the 100% nut-free product is made with whole grains and no high fructose corn syrup or artificial flavors, sweeteners or preservatives. The thaw-and-serve sandwiches will be available in both Grape and Strawberry flavors.
NEW IN CONVENTIONAL SNACKS
Ethnic, plant-based and better-for-you frozen snacks are grabbing a lot of the headlines lately, but conventional brands continue to roll out new items. For example, the third best-selling national brand, Farm Rich, St. Simons Island, Ga., recently debuted a line of co-branded Budweiser beer-battered snacks that allow consumers to enjoy pub-style fare in the comfort of their own homes. The collection includes Beer-Battered Pickles, Cheese Sticks, Cheesy Potato Bites and Cheddar Cheese Curds, the latter of which is made with real Wisconsin cheese curds. All four can be prepared in a conventional oven, toaster oven, home fryer or air fryer.
Another frozen department powerhouse, Tyson Foods, Springdale, Ark., is entering the handheld chicken sandwich space for the first time with its new Chicken Breast Sandwiches and Sliders. Merchandised in the frozen snack set, the two products are available in both Original and Spicy flavors. Both are made with breaded, all-natural white meat chicken and an artisan bun and are ready to eat in minutes.
Another major player in the handheld space, Franklin, Tenn.-based Red’s All Natural, is also preparing a new launch this fall, though the company isn’t ready to share the details just yet. Dollar sales of handheld entrees (non-breakfast) were up 9.7% to $919.70 million during the 12 weeks ended March 26, according to Circana. However, units fell 5.4%, mirroring results for the frozen department as a whole.
ARE YOU READY FOR SOME FOOTBALL?
What can retailers do to keep sales of snacks, apps and handhelds in positive territory? Bradshaw suggests preparing now for the category’s peak selling period, which begins in the fall with the start of football season. And don’t forget about Halloween. Unlike, say, the Super Bowl, which is only one day, Halloween often stretches from the beginning of one weekend to the end of the next, making it one of the top three frozen snack holidays. “So now’s the time to get not just the items in place but the promotions as well,” says Bradshaw. Frequent promotions (and displays) are a great way to draw consumers to the frozen snack set, he adds, but there’s no need to go too deep on price cuts.
In fact, Silverman would much rather see chains focus on the quality of their own brand frozen snacks rather than the price. “Some retailers put so much effort into ensuring the quality of their private labels — and then they just let it go,” he says. After everything they go through, “They really need to communicate the quality of their products to consumers. They need to tell their story, not just their price.”
Another key to continued category growth is proper assortment. National chains in particular need to be sure they’ve got the right items for different regions since they do vary. For example, taquitos are a top five snack in the West but not in the East. And mozzarella sticks are a big seller in the East but not necessarily in the West. “So be sure to look at the regional data,” says Bradshaw.
