Friday, June 30, 2017

Meat Snacks Offer Breakfast, Gourmet, and Kosher Options at the 2017 Sweets & Snacks Expo

I attended the Sweets & Snacks Expo (aka, The Candy Show) which was held May 23-25 at Chicago’s McCormick Place. The trade show organized by the National Confectioners Association hosted over 800 exhibitors representing candy, chocolate, and snacks companies. In this article, I will talk about how meat snacks have expanded beyond beef jerky to premium breakfast, gourmet, and kosher options. In other articles, I discuss other trends seen at the show: coffee meets chocolate, chickpeas and lentils in the snack aisle; spicy flavors; and popcorn appeals to both health and indulgence seekers.

The number of meat snacks continues to grow as companies introduce new products to appeal to consumers beyond the traditional audience of hunters and fishermen buying beef jerky at convenience stores. Premium meat jerky, meat bars, and meat sticks have become more visible as a high-protein, minimally processed snack, boosted by the popularity of the Paleo diet and a desire for fewer, simpler ingredients in foods. To appeal to a broader audience and continue growing sales, meat snacks companies are using a wide variety of meats beyond beef, incorporating premium ingredients, and turning to chefs and celebrities. The $2.8 billion meat snack category has been a positive performer in the total snack category, with compound annual sales growth of over 7% over the past four years and 3.5% growth for the year ended February 25, 2017 according to Nielsen.

Using premium ingredients and meats beyond beef is a way for meat snacks companies to appeal to a wider group of consumers looking for a healthy snack. Genius Jerky calls itself an “ultra-premium artisan jerky company” through the use of ingredients such as grass-fed and grass-finished beef, premium spices, honey, and roasted garlic. Field Trip Jerky seeks to appeal to active foodies by using grass fed beef, vegetarian fed pork, free range turkey, and ingredients such as apple juice, pineapple juice, and rice wine. Duke’s Meats emphasizes the use of real, whole ingredients such as hickory smoked peaches, freshly chopped cilantro, and real lime juice in its slogan: “Smoked Meats Crafted with real, whole ingredients, not a lot of sugar”. The brand also emphasizes that its products are “Small Batch Crafted” with the batch case qty number stamped on the back of each Duke’s Meats package. Conagra Brands, Inc, owner of the Slim Jim meat snack brand, acquired Thanasi Foods, maker of Duke's Meats in April 2017.

In the case of Oberto Brands, they have identified four consumer segments in meat snacks – Gourmet, Better For You, Traditional, and With Jerky – so that they have products designed to appeal to each segment. In the Gourmet segment, Oberto offers its Oberto’s Pacific Gold brand that is sold in club channels and positioned as a “Delicious snack to reward myself and family”.

To reach the Gourmet segment, some players are using a chef-created message to target foodies and women. Think Jerky was created by Ricky Hirsch who partnered with famous chefs such as Michelin star chefs Gale Gand (a Food Network star) and Laurent Gras to develop the recipes. Hirsch calls his products “Healthy Chef-Created Jerky” through the use of 100-calorie packs, minimal use of sugar and salt, and use of grass-fed beef or free-range turkey. Chef's Cut Real Jerky, created by Chef Blair Swiler and Dennis Riedel, touts features such as "Chef-Created Marinade", "Real Ingredients", and "Cut By Hand" in addition to being certified gluten free. At the Sweets & Snacks Expo, Chef's Cut Real Jerky introduced shelf-stable Protein Packs that combine its meat jerky with dehydrated cheese (using a patented process) in Real Steak Jerky - Original Recipe & Cheddar Cheese and Real Turkey Jerky - Teriyaki & Pepper Jack Cheese varieties. Following the show, actress Olivia Munn announced on June 12, National Jerky Day, that she is the newest investor in Chef's Cut Real Jerky. This development is likely to bring more female attention to the brand and to meat snacks overall. 

Sugar content in meat snacks has historically not been a big factor in consumer purchasing decisions. However, it looks like that could change in the premium segment of meat snacks as health conscious consumers increasingly seek to reduce sugar consumption not just in beverages but in snacks. Think Jerky’s website talks about its founder’s focus on minimizing the use of sugar and salt but does not call its sugar content on the front of the packaging. In contrast, Duke’s Meats features a low-sugar message in its slogan: “Smoked Meats Crafted with real, whole ingredients, not a lot of sugar” and calls out the sugar content on the front of the pack. Without naming names, Duke’s Meats calls out a leading “gourmet” jerky for containing 11g of sugar and a leading meat bar for containing 9g of sugar. In contrast, Duke’s Meats products contain only 0-5g of sugar per serving.

Women have not been a traditional consumer of meat snacks. But Link Snacks, Inc, the number one player in meat snacks with its Jack Link’s brand, created the Lorissa’s Kitchen brand in 2016 to appeal to active, upscale women looking for a healthy snack with varieties such as Ginger Teriyaki and Korean Barbecue Beef. Lorissa’s Kitchen is differentiated from other meat snacks brands through the use of attractive packaging that features photos of ingredients such as ginger, sesame seeds, and soy sauce. The packaging also touts that Lorissa’s Kitchen is “100% Grass-Fed Beef”, “Chicken Raised Without Antibiotics”, No Added MSG, and No Preservatives to reassure women that the meat snacks are premium.

Even consumers eating kosher are now being targeted. Tomer Kosher offered Kosher Beef Sticks that are kosher certified, made with 100% angus chuck, and free of dairy, gluten, and soy.

Among new initiatives, the traditional outdoorsy male audience for meat snacks is not being ignored. Three Star Brands licensed the Coleman outdoor brand to create Coleman Premium Steak Snacks for camping, hiking, and other outdoor activities. Oberto Brands uses its Cattlemen’s Cut brand to target the Traditional consumer segment and its Oberto brand to reach the Better For You segment.  The company hired sports personalities including Rob Gronkowski (NFL All-Pro), Richard Sherman (NFL All-Pro), and Travis Pastrana (action sports) to spread the message that “Oberto is the jerky brand for those who lead an active lifestyle”.

Among other consumer segments, breakfast lovers and campers are being targeted. Link Snacks Inc extended its Jack Link’s brand to Jack Link’s A.M. to create Breakfast Bacon in Applewood Smoked and Brown Sugar & Maple and Breakfast Sausage in Original and Hot & Spicy varieties as a hearty morning offering. The introduction of a morning-positioned meat snack provides another snacking occasion beyond afternoon snacking and ties in well with the concept of more Americans having a second breakfast as reported by The Wall Street Journal in April 2017.

Popcorn Appeals to Both Health and Indulgence Seekers at the 2017 Sweets & Snacks Expo

Popcorn products were in abundance at the Sweets & Snacks Expo which took place May 23-25 at Chicago’s McCormick Place. The trade show organized by the National Confectioners Association hosted over 800 exhibitors representing candy, chocolate, and snacks companies. I will talk about how popcorn makers are targeting both health and indulgence seekers in this article. Other articles will highlight the following trends in snacking that I saw at the show – coffee meets chocolate, chickpeas and lentils in the snack aisle; spicy flavors; and meat snacks offer breakfast, gourmet, and kosher options. 

Popcorn’s neutral taste and low calorie content provides a versatile platform that allows companies to offer one of the lowest calorie snacking options (on a per cup basis) or the indulgence of caramel, cheese, and chocolate mixed in. In turn, popcorn along with meat snacks has been one of the fastest growers in the U.S. snack industry. The RTE (ready-to-eat) popcorn category grew by 10.9% to reach $1.3 billion for the 52 weeks ending April 16, 2017 according to IRI POS, MULO and C & MULO data cited in Amplify Snack Brands, Inc’s June 13, 2017 presentation. A large portion of the double-digit growth has been driven by the company’s SkinnyPop brand, the number two brand in RTE popcorn after PepsiCo’s Smartfood brand.

SkinnyPop and other better for you (BFY) popcorn brands have leveraged growing interest in healthier snacking. The SkinnyPop brand has grown sales by highlighting features such as 39 calories per cup (in the Original Popped Popcorn), Non-GMO Project certification, gluten free certification as well only using only three ingredients (popcorn, sunflower oil, and salt). Going beyond its Original RTE popcorn, the company introduced microwaveable popcorn and popcorn cakes in February and is rolling out RTE popcorn in Real Cheese Aged White Cheddar & Pepper Jack varieties (47 calories per cup) this month.

A number of other companies also highlighted the low number of calories for their RTE popcorn at the show. SHRED Brands LLC highlighted “SHRED Snack approved at 33 calories/cup” on its SHRED Pop package. SHRED Pop is targeted towards calorie-counters and fans of Dr. Ian K. Smith, best-selling author and creator of the SHRED diet. I had a chance to meet Dr. Smith at SHRED Brands' booth at the Good Food Festival held in Chicago in March 2017.

Gaslamp Popcorn Co notes that its Sea Salt & Olive Oil Hand Made Popcorn contains 37 calories per cup. This popcorn is targeted at foodies with a small batch, kettle-popped process and the use of California Olive Ranch Extra Virgin Olive Oil. Open Road Snacks notes 43 calories per cup and 18g whole grain for its Sinfully Thin SuperPop Popcorn Herb & Spice Popcorn with Kale & Pomegranate. By using dehydrated kale flakes and pomegranate powder, the company seeks to position its popcorn as not just BFY but as a superfood. Karen Bradley, VP of National Sales at Open Road Snacks, told me that her company targets a wide range of consumers by offering both BFY Sinfully Thin Popcorn range as well as indulgent Rocky Mountain Popcorn (with the "taste HUGE" slogan) in flavors like caramel, kettle, and white cheddar. Open Road Snacks was acquired by Fresca Foods Inc in February 2017. By using a 0.625oz bag instead of a 1oz bag, Herr Foods Inc is able to claim 80 calories per bag for its Go Lite! Himalayan Salt popcorn. In addition to using Himalayan salt that is popular among foodies, the company uses coconut oil, currently viewed as one of the healthiest cooking oils.

There were plenty of indulgent items featuring popcorn at the show. The Hershey Company offered its Hershey’s Popped Snack Mix (with chocolate, pretzels, and popcorn) and Reese’s Popped Snack Mix. Gaslamp Popcorn Co offered up its Malibu Mix that combines sweet kettle corn, white cheddar flavored popcorn, and sea salt & olive oil popcorn. Hello Delicious! Brands combined the indulgence of caramel with the health benefits of dried Montmorency tart cherries in its Popcorn Thins Handcrafted Popcorn Snacks With Cranberries, Almonds, Cherries & Caramel.

Also offering indulgence was Harry & David who introduced two new varieties of its Moose Munch Premium Popcorn featuring Nestlé’s confections - Moose Munch Popcorn made with Nestlé Butterfinger Bites and Moose Munch Popcorn made with Nestlé Buncha Crunch. I spoke with Harry & David’s President Steven Lightman and Midwest Gourmet Food Group’s President Steve Druckman at the booth at the show. acquired Harry & David in 2014 and also owns The Popcorn Factory, Cheryl’s Cookies, Wolferman’s,, Stockyards, and Moose Munch and The Popcorn Factory primarily sell their products directly to the consumer. Lightman talked about how the company is seeking to position Moose Munch as an everyday snacking item instead of holiday gifting only. Consumers are familiar with Moose Munch from its availability in department and home stores such as Macy’s and Bed, Bath & Beyond during the Christmas shopping season as well as on the Harry & David’s catalog and website. To reposition the Moose Munch brand and reach younger consumers, the company has decided to go after self-consumption and snacking occasions through new products such as the Nestlé collaboration, smaller package sizes, and an expansion of retail channels. Using smaller single-serve 4oz bags and share-size 8oz bags instead of tins and drums allows Harry & David to sell their premium items into convenience stores such as 7-Eleven which receive more foot traffic than department stores.

Similar to Lightman’s goal at Harry & David, Druckman wants to expand the number of eating and buying occasions for The Popcorn Factory’s popcorn. The Popcorn Factory is known as a source for decorated popcorn tins during the holidays through its website and catalog. Druckman seeks to expand its wholesale business and to increase the number of orders on The Popcorn Factory’s website. At the show, the company’s Wholesale Shared Bag Line offered multiple indulgent options including Bacon Cheddar Popcorn, Butter Toffee With Sea Salt Popcorn, and Cinnamon Sugar Popcorn in packages ranging from 3oz to 8oz. The Popcorn Factory also offered Single Flavor Clear Canisters of popcorn in a wide variety of flavors including Peanut Brittle and Sour Green Apple. In terms of e-commerce, Druckman wants to get more and more gifting occasions beyond birthdays, sympathy, thank you, and graduation. To aid this effort, parent company offers the Celebrations Passport membership program similar to Amazon Prime where consumers receive free unlimited standard 2 business shipping with no minimum purchase across all of the company’s brands for an annual fee of $30.

Candy and snack manufacturers are increasingly interested in using e-commerce to grow sales. At the show, One Click Retail’s VP of E-Commerce, Nathan Rigby, stressed the need to compete on effectively in his “State of the Market: E-Commerce for Candy and Snacks” presentation. Rigby stated that grocery sales on Amazon U.S. passed the $1 billion mark in 2016 and totaled $350 million in the first quarter of 2017, up 30% year-over-year.