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I was starving. Well, I must admit I am always hungry. But this time, I had just landed in Germany and was trying to finish a story. I just wanted a snack. I wasn't hungry enough for room service and I was too tired to head outdoors. That meant I was about to resign myself to salted peanuts from the mini bar. But when I opened the cabinet, I discovered something new — at least to me — a DeBeukelaer Prinzen Start Muesli & Fruit Snack Bar that touted minerals, vitamins, calcium, and more. And although I couldn't understand the German nutritional label, the impression that it was a healthy snack was enough to satiate my conscience.

Yes, I am often a typical media-hyped, packaging-entranced, gullible consumer just looking for any excuse to think that what I am about to consume is healthy for me because then the calories don't really count as much. So I confess — I'm an American snacker.

According to The International Dairy•Deli•Bakery Association (IDDBA), consumers define the ideal snack as one that is "healthy, tastes sinful, and is convenient in all aspects." I could not agree more.

Snack Attack
The trend in snacks these days is definitely skewed toward healthier choices. Consumers are looking to retailers to provide them with good-for-you choices in convenient grab-and-go packaging. Feeding this eating pattern is the trend toward 'small plates,' as well as glycemic index diets and organic inspiration. The IDDBA estimates that nearly 90 percent of Americans indulge in a snack on any given day. Compare that with 75 percent of Americans who eat breakfast and 88 percent who eat lunch, and you have a significant event occurring daily. Market analyst Packaged Facts projects that the overall snack market should grow by four percent annually on average, with sales rising from $47.1 billion in 2003 to $57.3 billion in 2008. Such a healthy growth rate will translate into a cumulative $10.2-billion sales gain over a five-year period.

Even with the dollar growth, market analysts report that snacking is on the decline as Americans try to be more health conscious. A recently released report from the IDDBA, Snacking Trends: A World of Opportunity, indicates that one-third (33.5%) of Americans have decreased their snacking over the past two years, compared to 30.8 percent who have increased their snacking. Additionally, consumers who have dramatically decreased their snacking (11.5%) substantially outnumber those who have made a dramatic increase (8.7%).

The IDDBA projects that retailers and suppliers can reverse this declining trend by working to satisfy consumers' 'healthy' appetites. The 'small plates' trend is one retailers can capitalize on by stocking more unconventional snacks to replace traditional chips and cookies. Consumers are eating chips, cookies, and other "unhealthy" snacks much less frequently; instead, they are boosting their intake of nuts, fruits, veggies, yogurt, cheese, and other healthier items. IDDBA analysts suggest that retailers should view snacking as a type of event, rather than as a type of product. Under this guise, almost any type of food becomes suitable for snacking, as long as it is presented in convenient packaging. Presenting snacks as part of a healthy diet of several small meals a day will also help build the category at retail.

"Though health consciousness has been the greatest contributor to the decline in snacking, it also represents the most significant and actionable opportunity for building snack consumption. When asked what factors encourage them to snack more, a solid 25.6 percent of study respondents indicated that they are compelled to snack as part of a regimen of eating several small meals a day, noting the health benefits of such an app-roach," the IDDBA report continued. "The several-small-meals finding is an important one, as it offers a potential solution for reversing the decline in snacking. As media coverage, new food-labeling laws, and other public attention to nutrition matters continue to capture consumer mindshare, Americans are likely to maintain their focus on health; as such, the traditional model of snack marketing may not hold up well in the face of such trends. Snacks are inherently well suited for a "several-small-meal" lifestyle — a point that should not be lost in the messaging communicated to consumers."

The IDDBA's snacking report provides a sketch of the demography and changes in the American snack consumer — first, men and women are about equally likely to have reduced their snacking over the past two years; those age 55 and over are likely to have greatly decreased their snacking; people in their mid-twenties to mid-thirties, meanwhile, tend to have increased their snacking; snack consumption is markedly lower among Caucasians, while up somewhat amongst Hispanics; snacking is declining most in the Midwest; and consumers from six-figure income households are particularly likely to have decreased their snacking (recall that health consciousness and income go hand in hand).

Beyond Traditional Snacks
Last year, the gourmet food and beverage industry rang up $41.2 billion in sales, and by 2009, Packaged Facts estimates the gourmet market will top $62 billion. Based on data from Simmons Market Research Bureau, the report estimates that 18.3 percent of adults try to eat gourmet food whenever they can. The study attributes the appeal to greater involvement by mainstream food marketers, expanding retail distribution of gourmet products, and a growing relationship between the natural and gourmet food industries. Convenience is also a contributing factor, with the consumption of prepared foods, such as bottled water, ready-to-drink beverages, bagged salads, and packaged sushi, on the rise.

This trend toward specialty food, coupled with a shift in snacking mentality toward healthier options translates to growing opportunities for our marketplace. The IDDBA's What's in Store 2006 report points out that specialty food snacks have racked up big gains between 2002 and 2004 in comparison with mainstream snacks. Those gains are probably due to their perception of consumers that they are more 'healthy.' The report illustrates this statement — the Mintel/SPINS/ACNielsen data shows that sales of specialty candy and individual snacks grew 9.6 percent versus 1.3 percent for mainstream; specialty cookies and snack bars grew 16.5 percent versus 4.1 percent for mainstream; and specialty crackers, crisp breads, and rice cakes grew 9.2 percent versus 5.4 percent for mainstream.

An Information Resources, Inc. (IRI) and MarketResearch.com, Inc. study performed in June 2004 discovered two broad forces shaping the U.S. snack market. The first is the decline of the sit-down family meal coupled with the erosion in American eating habits; the second is the blurring of the distinction between meals and snacks. Both forces are overwhelmingly positive for the snack market since packaged snacks are no longer necessarily ancillary to "three squares a day."

The report states, "American consumers are ambivalent and often hypocritical in their nutritional attitudes, and the cast of nutritional villains (calories, fat, sugar, carbs, portion sizes) keeps shifting. Nonetheless, future sales growth should fall disproportionately to suppliers and retailers that can give consumers their snack cake and let them eat it in good conscience, too."

The IDDBA report further adds, "In light of all this, it is clear that 'health and nutrition' is the number-one issue currently confronting the snack market. It's not that consumers don't like snacks, can't afford them, or can't find them — it's just that they simply want ones that fit well within a healthier diet."

Snacktime in America
Whether or not we make nutritional sound snacking choices, we are certainly choosing to snack. According to the fall 2003 national consumer survey by Simmons Market Research Bureau, 25 percent of adults often snack between meals, and 12 percent eat several small meals during the day. Parade Magazine's most recent annual food survey found that 30 percent of our total calories come from snacks, and that 20 percent of us snack throughout the day.

According to additional data from the Simmons survey, 22 percent of those in all-adult households often snack between meals. The adults most likely to snack includes those aged 35–44 years old (at an index of 117) or 18–24 (index of 112), full-time students (index of 117), and those who are single/never married (index of 112). In contrast to the skew towards younger people among frequent snackers, the adults most likely to eat several smaller meals include those who are 65–74 or 75 or over and those who are widowed, along with full-time students, Hispanics, and women.

A major barrier to sit-down meals and healthy eating is a lack of time. According to the Simmons survey, 23 percent of adults prefer foods that are "easy to prepare," 10 percent don't have time to prepare or eat healthy meals, and five percent often eat store-made, precooked meals. To date, eating what you want or at least what is convenient is winning handily over eating what you should.

The IDDBA snack report cites convenience as the other major driver of increased snacking, with 20.7 percent opting for snacks over meals due to their busy schedules, and 19.0 percent citing the increased accessibility of snacks today. Still, these consumers would prefer to have healthier options. They are sacrificing healthfulness for what is most convenient, but it is important to bear in mind that they are primed to switch to other snack products that better meet their desires — provided they are just as easily accessible.

According to the Simmons survey, only 22 percent of adults and 27 percent of women describe themselves as trying to eat a healthier diet. Under 19 percent of adults are trying to eat a "well-balanced" diet, and about the same percentage rank "nutritional value" as the most important factor in choosing which food to eat. All in all, only 11 percent of adults consider their diet to be "very healthy." But even if Americans have a spotty record with healthier eating options, an increasing contingent of consumers realizes that you can't snack on candy bars and potato chips alone. As DSN Retailing (October 7, 2002) has reported, "a market for healthy snacks is definitely out there."

To satiate the American appetite for snacks, food marketers have expanded, reformulated, and repackaged their product lines to make them as tempting and as convenient as possible. Healthier food choices represent major opportunities for marketers of packaged snacks of virtually every type. They cover the entire high-protein, high-fiber, natural/organic, fortified, lower-carb, lower-fat, lower-sugar, and lower-salt spectrum. A study by the Food Marketing Institute and Prevention Magazine called "Shopping for Health 2003: Whole Health for the Whole Family" indicated that while 87 percent of consumers believe eating a healthy diet is a better way to manage illness than medication, their shopping habits are still mainly driven by convenience and cost. The FMI study also shows that finding healthy packaged/prepared foods is especially important to working women, younger shoppers, minorities, and those who admit their diets could be "a lot" healthier.

How Sweet it Is
Research also indicates that the majority of those snacking consumers crave sweets. When segmenting snack food products into sweet, salted, and mixed categories, the sweets win with nearly $18.7 billion in sales in 2003, or 57 percent of the snack foods market, according to IRI sales tracking. Salted snacks, in turn, weigh in at $13.3 billion, for a 41-percent share of the market. Mixed sweet and/or salted product types claim the remainder of the market.

MarketResearch.com reports, "The gap between sweet and salted widens a bit further when examining the five-year sales growth in these two broad snack categories. The sweet snack segments and product types combined for $3.3 billion of the total $5.2 billion in IRI-tracked growth in snack food sales over the 1999–2003 period, translating into 63 percent of the sales growth in the market, compared with sweet snacks' 57-percent market share. Salted snacks, in turn, accounted for a 36-percent share of the sales growth in the market against this category's 41-percent share of total sales."

Crackers are the most popular snack among all-adult households, standing at 82 percent. Among the other salty snack classifications, potato chips follow closely behind crackers at 81 percent, with popcorn at 74 percent, nuts at 70 percent, and chips and cheese snacks coming up next at 68 percent. Among the sweet snack classifications, candy is the leader with a 75-percent penetration rate among all-adult households.

The market for more nutritionally correct low-fat, low-sugar, and low-salt products among all-adult households can be partially credited to seniors. According to separate findings from the Simmons survey, only eight percent of adults in all-adult households usually snack on healthy foods — about the same percentage as in households overall. But clearly, healthy snacking is a habit that increases with maturity — the adults most likely to snack right are those aged 75 or over (at an index of 156, or over half again the adult norm), followed by those aged 65–74 (index of 130) and those aged 55-–64 (index of 114).

Trendsetters
The low-carb band-wagon that most marketers jumped on over the past few years has spun out of control and now everyone is pointing to glycemic index (GI) labeling as the next trend that will spur Americans to make "healthy" choices. In addition, many marketers are reformulating product lines to eliminate trans fats in response both to current consumer concerns and to future government regulations.

Emerging trends based on these healthier impulses place real-fruit products among the most important frontiers in the sweet snack market. Publicity about the health benefits fruit bestows is driving a growth trend in various product segments, and it's a trend that definitely has legs. The IDDBA snacking report found that many retailers are out of touch with what their customers desire in snack foods. It said:

"Retailers are highly optimistic, even for those snack categories where consumers expect to reduce intake the most. For example, 42.9 percent of retailers expect the sweet baked goods category to grow in the coming two years, while only 18.1 percent believe it will shrink; by contrast, the numbers of consumers who plan on eating fewer sweet baked goods outnumber those who plan to eat more of them by nearly a 9-to-1 margin (53.1% vs. 6.1%)."

The good news is that retailers have correctly identified fruits & veggies as the snack category most poised for growth in the future.

Simply rethinking how you market or package existing product inventory may help you to capture more sales in the snack category. The Cheese Department is a great place to entice snackers. Focus tastings on specialty cheeses that can be offered in small snackable sizes, along with small packages of specialty crackers. Consider smaller-sized portions of packaged goods — such as cookies, crackers, and sweets — normally saved for gift baskets to be presented in a 'Grab n' Go' snack section near the register or at your store entrance. Though margins on these types of packaging are often higher, they offer your customers the opportunity to control their portions.

SNACK FACTS
- 74% of Americans snack in the evening, 57% snack in the afternoon, and 45% snack in the morning.
- Packaged Facts estimates that U.S. retail sales of snack foods totaled $47.1 billion in 2003, up 4% over 2002 sales. During the five-year period from 1999 to 2003, snack foods gained an estimated $7.2 billion in sales.
- According to Mintel's Global New Product Database as reported in Prepared Foods (March 29, 2004), overall snack product introductions in the North American market surged from 794 in 2001 to 1,057 in 2003. Most of the product introduction growth was in snack bars/mixes and energy bars, with the number of new products in this classification up from 289 in 2001 to 437 in 2003 and in savory/salty snacks, with the number of new products rising from 298 to 397.
- The number of consumers faced with obesity and its related diabetes continues to make sugar-reduced or sugar-free products viable snack options for retailers. Catering to these consumers with healthy, good-tasting specialty foods will provide customer loyalty. (IDDBA's What's In Store 2006)
- Much media attention has been dedicated to discussion of the relationship between large portion sizes and Americans' obesity issues. Retailers who offer individually sized portions or even smaller family-sized options will help provide consumers with more options and control over what they eat. (IDDBA's What's In Store 2006)
- Nearly two-thirds (66.4%) of health-driven consumers say they are likely to snack less because they are trying to be healthier in general, while 61.9% cite weight loss as the prime motivation. (IDDBA's Snacking Trends: A World of Opportunity)
- Health-driven consumers are less likely to be discouraged from snacking due to budgetary reasons (though this is not to say that such consumers are price-insensitive; rather, their snack choices are somewhat less likely to be value driven than those of other consumers). (IDDBA's Snacking Trends: A World of Opportunity)