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Survival of the Fittest Snacks

Survival of the Fittest Snacks

Since four in 10 snack dollars are spent on better-for-you options, salty snack marketers are reformulating for health

Test Test Test

It's crunch time for salty snacks.

With granola bars, yogurt and fresh fruit dipping into chips' share of snacking occasions, potato chip makers are moving to reduce sodium, fat, artificial ingredients and otherwise refine recipes for health.

 

Setting the tone is share leader Frito-Lay who, since shifting to all-natural ingredients for its seasoned Lay's potato chips, Tostitos tortilla chips and SunChips multigrain snacks, is working to rid Baked! snacks and Rold Gold pretzels of all things artificial.

Half of its product portfolio will be all-natural by year's end, but alternatives for artificial seasonings used on Frito-Lay's bolder-flavored snacks will take more time.

“There are some technical challenges with brands with much bolder, stronger flavors,” Aurora Gonzalez, senior director of public relations for the Plano, Texas-based manufacturer, told SN.

Herein lies the challenge of balancing the tastes of brand loyalists with the desires of 71% of consumers who are trying to eat healthier, according to SymphonyIRI Group's “State of the Snack Industry” report.

With revenues for natural snacks up 7%, marketers are looking to edit ingredients that consumers have trouble pronouncing. But the most recognizable brands are conscious that serious snackers don't want their favorite chips “messed” with.

Advances in food science are appeasing the two by delivering the same taste with less nutritional sacrifice. “There are new technologies and new ingredients helping manufacturers bring to market better products,” noted Susan Viamari, editor of SymphonyIRI's Times & Trends.

Innovations have been such that when Frito-Lay reduced by 25% the sodium in Barbecue, Creamy Garden Ranch and other seasoned Lay's chips by cutting topical salt and other ingredients that contributed to sodium, there was no compromise to taste. In fact, since the reduction wasn't advertised on bags, it likely went unnoticed.

Frito-Lay didn't exactly bang a drum about its lower salt offerings, but it didn't miss a major marketing opportunity either. Since snacks touting low sodium are in high demand — with sales up 6.2% — it reached out to supermarket dietitians and encouraged them to suggest the lower-sodium chips during high blood pressure store tours and other interactions.

In a category that is particularly loyal to national brands, private-label marketers are taking cues from major players and likewise reformulating for health.

Giant Eagle's line of potato chips is the latest to undergo an all-natural transformation. Lighter oil and real spices, sour cream, cheddar cheese, onions, vinegar and other ingredients were used to re-create the line that is now lower in fat.

“While we've always loved our potato chips, we decided to challenge ourselves to elevate the look, taste and quality of this all-time-favorite snack to new heights,” states the Pittsburgh-based retailer in promotional materials. “We went through many versions until we found the recipe that worked best and this fall, we are proud to bring you our best tasting chip yet!”

In taking the steps to rid its chips of MSG, preservatives and artificial flavors and colors, Giant Eagle has entered a segment that's proven to be more profitable for retailers than traditional salty snacks.

Just compare private-label share in the conventional snack category — a relatively low 8.5% — to own brands' piece of the natural and organic snack pie, at 17%.


“That suggests that retailers that invest in private-label natural and organic and healthier salty snacks can do so with confidence … consumers will purchase them at pretty solid rates,” said Jim Hertel, managing partner at Willard Bishop, Barrington, Ill.

Working in corporate brands' favor is cost. Consumers are showing a growing affinity for “favorite brands” priced reasonably or on sale vs. “any brand” at the lowest available price point or price per serving, explained Viamari, but about one in three snackers opts for the lowest price regardless of brand.

“Consumers are really working hard to rein in their CPG budgets today and are willing to switch brands to do so,” Viamari said.

Helping eliminate risk for Giant Eagle shoppers is a double money back guarantee on Kettle Cooked, Lightly Salted Classic, Rippled Potato Chips and other varieties of its all-natural chips.

Other better-for-you store-brand chips are posting impressive sales with little promotional support. The H.E. Butt Grocery Co. is having success with its new H-E-B Unsalted Restaurant Style Tortilla Chips, said Rosalinda Benner, nutrition/culinary specialist for the chain. Each serving has just 10 mg of sodium.

“A lot of people thought no one would want them, but they've been so popular we can't keep them on the shelves,” she said. At 100 calories per serving, H-E-B Baked Pita Chips are also “selling like hotcakes.”

Big brands may have shopper loyalty working in their favor, but with a more nimble operation H-E-B can easily experiment with and bring to market new formulations. If demand isn't there it simply scales back production, Benner explained.

“It wasn't like we were going to make 50 million bags [of the unsalted chips] and then be surprised if we didn't sell any,” she said.

The setup allows it to differentiate with seasonal items like yellow and black corn chips for Halloween and chips that match the colors of local college teams in September. During the first month of the football season there were orange chips for the University of Texas, purple for Texas A&M and red for Texas Tech.

On a more continual basis, Benner and a food technologist work in the chain's test kitchen to improve the nutritional profiles of H-E-B's corporate brands.

Today, its chips are made with canola oil and therefore lower in saturated fat. Sodium levels have also be reduced.

“We started with a 10% [reduction] and we keep lowering it,” Benner said. “Once consumers get used to it, we'll lower it a little more.”