R&FF Retailer: Appies & Snacks Taking a Bigger Bite

Through a special arrangement, presented here for discussion are excerpts of a current article from Refrigerated & Frozen Foods Retailer magazine.

Appetizers/snacks, benefiting from increased at-home eating and entertaining and more items suited for on-the-go snacking, is one frozen food category that is outperforming the department as a whole by a wide margin. And its sales are accelerating.

The category was up 8.7 percent to $202.4 million and 4.8 percent in unit sales to 60.6 million in U.S. supermarkets in the 12-weeks ending June 15, according to Information Resources, Inc. For the 52-weeks ending June 15, the category was ahead 5.6 percent to $961.5 million and 2.7 percent to 293.0 million units. This compared with dollar increases of 1.7 percent and 1.9 percent, respectively, and unit declines of 2.7 percent in the 12-week period and 2.2 percent in the 52-week period for the overall department.

The hottest items in the category are those that are more natural and healthy. "It's what's on everyone's radar," said Keith Chen, president of Toronto-based Culinary Destinations.

"When it comes to frozen snacks, consumers are looking for variety, convenience and premium offerings," according to Mark Fleming, director-frozen snacks, Heinz North America.

Frozen snacks are often considered a discretionary purchase. So in today's down economy it presents a challenge for the category as it does for the food industry overall, said Mr. Fleming. "The good news is that consumers are still seeing the value in frozen snacks/appetizers; they are just being more selective."

"Products have to taste good and be a good value because when people are spending $100 to fill up their gas tanks they are thinking a lot different than they were six months ago," noted one observer.

"We are noticing increased popularity within the category for snacks-on-the-go. Consumers want products that are hand-held, easy to prepare, wholesome and nutritious," said Jennifer Meetz, senior marketing manager of Rich Products Corp., maker of the Farm Rich brand. Mini stuffed Panini and mini quesadilla slices will be debuting this fall from Farm Rich.

Amy Ruegg, director of marketing for Schwan's Asian Sensations line, points out that consumers are increasingly interested in augmenting their current purchases with ethnic foods that are new and different to provide an alternative to their meals. "This interest," she said, "is driving ethnic foods to grow faster than most other food categories."

Ellen Meyer, president of Great American Appetizers, believes that convenience and price are the driving factors of the overall category's sales gains.

"The entire category is on fire, especially main core items," she said.

Discussion Questions: What do you think is driving the recent growth in frozen appetizers/snacks? How can grocers build on this momentum? Considered a discretionary purchase, do you think frozen appetizers/snacks sales will slow or grow in the current economic downturn?

• Appies & Snacks Taking A Bigger Bite - Refrigerated & Frozen Foods Retailer