Store Brands

JAN 2017

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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Category Intelligence: Fruit & Nut Snack Mixes 6 0 Store Brands / January 2017 / prunes are not only popular in trail mixes but also as straight SKUs. "Millenials view them as high- energy foods." Innovation is also fueling the category. For instance, not only does Woodstock offer organic nuts, it offers organic flavors to go with them. The company also offers a salad topper featuring nuts, seeds and dried fruit. "Between flavorings and innovation of mixes, we are bringing more to the table. But we don't need to reinvent the wheel," Kaufman says, noting that what's important is to stay on top of flavors, such as sriracha and ghost pepper, and adapt them whenever possible to conventional and organic products. Trophy Nut has also embraced flavoring. It has developed an extensive line of flavor profiles that work across stand-alone nuts and mixes. They include spirit-influenced flavors, including honey bourbon pecan, chile lime cashew and bloody mary peanut. "We're working on big projects with large retailers looking at bold and innovative flavors," Reindel says. For Setton, continuing to educate consumers and retailers on the healthfulness of pistachios will cultivate demand. "We have to continue to show them that pistachios are one of the healthiest nuts," he says. "The more we do that, the more retailers will feature them. The education doesn't stop." Even more business From Kaufman's perspective, the key to attract even more business to the category is for retailers to offer top-shelf products. The formula is simple: If the private brand product is of good quality and value, consumers will return again to purchase it, he says. "The retailer's job is to develop the right packaging to attract the customer to the product and the right price point to sell the first bag," Kaufman says. "My job is to get consumers to buy the second, third and fourth bags." Trophy Nut takes a similar approach, and it's working. While value-driven retailers offer entry- level products, Reindel has found that consumers are willing to pay for high-end products. For one large retailer, Trophy Nut manufactures a snack mix priced at $8. And it sells. Snacking presents another opportunity for growth. According to Mintel, 75 percent of consumers are most likely to eat nuts, seeds or trail mix as a type of snack. Mintel's survey reveals that 28 percent of consumers snack in the morning, 52 percent in the afternoon and 44 percent in the evening. Trophy Nut offers a line of breakfast mixes, including a cinnamon bun mix and a strawberry granola mix. "They have been a huge hit for us," Reindel says. Supply — a continuing challenge Despite the category's recent success and bright outlook for the future, there are still challenges. When asked the top challenge in the category, Kaufman didn't hesitate to answer. "Supply … the continued quality of supply," he says. In most cases, Kaufman realizes that supply — considering Mother Nature's impact on growing conditions of nuts, fruit, seeds and grain — is out of his hands. As a grower, Setton keeps a close eye on weather trends, especially in California, where 98 percent of all pistachios are grown in the United States. "Water is an issue and so is temperature," he says. "Pistachios need cool winters for proper growth. These things can impact the crops and prices." When dealing with a commodity- driven category, it's not always easy to hold price. "You have to try, but you aren't always going to win that battle," Reindel says. Aylward, editor-in-chief of Store Brands, can be reached at [email protected] military commissaries and select club and dollar retail chains for the 52 weeks ending Oct. 30, 2016. Note: Does not include all fruit and nut snack mix subcategories. Fruit & nut snack mix category performance Dollar Sales (in millions) Change vs. Year Ago Dollar Share Unit Sales (in millions) Change vs. Year Ago Avg. Price Per Unit Snack Nuts/ seeds/corn nuts Dry fruit snacks Private Label All Brands Private Label All Brands $1,276.4 +0.1% 30.4% 287.4 -3.3% $4.44 $4,199.2 -0.5% 100% 988.5 -3.2% $4.25 $120.0 +6.0% 12.3% 45.2 -13.3% $2.44 $997.8 -1.0 % 100% 376.6 -2.5% $2.65 According to Mintel, 75 percent of consumers are likely to eat nuts, seeds or trail mix as a type of snack.

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