Sales of food products bought at US grocery and independent stores are on the up, and the impulsive nature of snack buying makes this category fastest growing segment, according to a new report.
While product development is often at the forefront of a manufacturer's mind when concentrating of brand growth, the new study from Information Resources Inc (ICI) indicates that companies that focus on how and why a consumer purchases a particular product will ultimately be more successful.
According to the report, sales of baked and snack foods grew last year grew more than any other category.
"Grocery store sales have been hard hit throughout the past decade as consumers shifted spending to superstores," according to the ICI report.
The report also stated: "However, after years of struggling sales, 'center store' categories, that is, shelf stable food and beverages, are showing signs of revival and dollar sales grew three per cent over the last year."
For the 52 week period ending 12 August 2007, revenues for most snack categories increased in terms of dollar sales, with salty snacks up 5.2 per cent, fresh bread and rolls 4.1 per cent, and cereals up 2.1 per cent.
The greatest increases in terms of revenue were for snack products regarded as "healthy" by the consumer.
Sales of granola bars were up 10.2 per cent, the report said, while revenues from bakery products and dried fruits both increased by an impressive 11 per cent.
"Indeed, around 58 per cent of consumers are looking to retailers to clearly identify healthier products in grocery stores," the report estimates.
According to ICI, this trend is set to continue over the next year, and snacks or baked goods account for the top four categories in the researchers "Pacesetters to be" list.
Cold cereal and snack bars share the number one spot, as ICI estimates that sales of these products from grocery or independent stores will grow 15 per cent.
Crackers come next with an estimated 14 per cent growth, followed by cookies with an estimated 13 per cent sales increase.
Salty snacks and bread rolls also feature in the top ten, with ICI expecting these two categories to both experience sales increases of 6.5 per cent.
In the list of actual products set to grow in the health and wellness market, the top three were estimated as being Campbell's reduced sodium soups, Sara Lee breads and Quaker granola bars.
According to ICI, strong sales of snacks foods in smaller stores can be partly attributed to the fact that consumers often buy these types of product when on impulse, often if they walk past a grocery on the street.
However, the most successful manufacturers are also those who also carried out specific marketing campaigns aimed at consumers in a hurry.
"For example, manufacturers are innovating packaging by adding symbols to make it easier to spot better-for you foods," the report said. "General Mills and Kellogg's both use easy to see nutritional symbol on cereal packaging, and have experienced sales growth this year."
Other high growth categories this year will be wine, non-alcoholic beverages, chocolate and candy, bottled water, and dips or dip mix.
According to an earlier consumer study conducted by ICI, the market for healthier snacks in general are growing at triple the rate of the indulgent snack segment.
Another ICI survey revealed that 78 per cent of American consumers are trying to eat healthier; 63 percent are trying to replace high-calorie snacks with healthier options; 66 percent said they want to purchase nutritional products; and 57 percent said they were generally trying to snack less.
"Manufacturers must understand these shifting consumer trends and use them for future growth potential. Innovation is the key if we want to keep the snacking universe healthy," said ICI spokesperson Sally Lyons Wyatt.