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Variety Is the Spice
Leading brands are promoting lots of product and brand messages, ranging from great taste, variety and convenience, to a strong message about value and portion control.


If breadthof assortment were the only key driver in this category-with its familiar favorites and ethnic choices in Asian, Italian and Hispanic-annual sales would be more likely to produce an arrow, pointing up and piercing the most recent "ceiling" in sales trends. But sales growth for 2007 was less than stellar, according to Information Resources Inc., Chicago, which reported dollar sales increased by less than 3% for the 52-week period ending Dec. 30.

However, those total sales results for the category should not overshadow some significant, double-digit increases by individual brands. And further evidence that appetizers and snacks is a vital category comes in the form of new players in the mix and the category's huge sales volume-some $880 million from just the top brands and individual products.

With the shared goal of providing great tasting products to consumers, some brands have chosen to make a strong case for the importance of other product features, namely lots of choices, convenience and value.

For General Mills, Minneapolis, Minn., its Totino's pizza rolls and snacks are leading the category, with a message to moms that is all about "the power of pizza in a bite-sized snack," with some 34 products in various sizes and nine flavors-from pepperoni, cheese, triple meat, sausage, supreme, cheesy taco, and its newest introduction, the triple cheese pizza rolls.

At H.J. Heinz, Pittsburgh, Pa., with its multiple brands in the category-T.G.I. Friday's, Bagel Bites, Delimex and Nancy's-a spokesperson cites the success of T.G.I. Friday's as an example of its winning strategy: "Consumer research has shown that when it comes to frozen appetizers, consumers want more of what they love in every bite. This is especially the case with our T.G.I. Friday's frozen snacks. We are looking for ways to deliver even more of the same quality toppings, tasty fillings and great flavor in a variety of new SKUs that we are planning to launch in the coming months."

Among brands that have generated significant sales gains, Asian Sensations from Schwan's Consumer Brands North America, Bloomington, Minn., credits growth to the brand's ability to provide "new food alternatives for consumers that meet the needs of their busy lifestyle," says Tom Bierbaum, director of marketing.

"Asian Sensations is well-suited for multiple usage occasions, including snacks, entertaining and meal time," says Bierbaum. "This is all about taking an occasion in Asian food and bringing it into the mainstream. We developed the solution that effectively leveraged what consumers love to eat in Asian restaurants and brought it home in a mainstream way."

The product line consists of egg rolls, mini egg rolls and appetizers, including the newest products. New to the line are sweet & sour and Kung Pao chicken mini egg rolls.

During a four-week period late in the first quarter of 2008, Asian Sensations reported a 26.5% sales increase (including total grocery and Wal-Mart), driven by consumer interest in augmenting their current purchases with ethnic foods that are new and different, and which bring an alternative to their meals, he explains. Above and beyond the products' ethnic appeal, Bierbaum also cites successful promotional programs such as those featuring Julie Roberts during 2007.

"Last year, the promotion resulted in a 16.7% dollar volume growth versus a year ago in April and May, and a 13.5% dollar volume growth versus a year ago (for the 24-week period ended in mid July)," he reports. "As a result of this partnership, we recently launched a unique promotion called the Front Row Show that will enable a lucky consumer to win a private concert with Roberts later this year."

Special packaging featuring Roberts on the front of Asian Sensations snacks and appetizers is in stores nationwide, and consumers will again have the opportunity to win a free, private concert, in their hometown, for 100 of their family and friends.

For Ruiz Foods, Dinuba, Calif., with its El Monterey brand, most of its extensive product lineup fits comfortably within the appetizers and snacks category, including its multiple varieties of chicken, beef and cheese in taquitos, quesadillas, and Cruncheros.

"Tastes and textures are very important. And with that in mind, what is also very important to consumers is the consistency of the product's quality as well as the product's convenience and portability," says Bryce Ruiz, president and COO.

Commenting on specific snacking and mini meal occasions that tend to drive category sales, he cites "anything and everything that satisfies the ‘grab and go' convenience needs of today's consumer. This consumer looks for portability, great taste, convenience and versatility. Usage can center around snacks after school or after soccer or that baseball/softball game, the addition of a green salad or fresh fruit for a family meal, party fare service with salsa, guacamole and sour cream."

Kahiki Foods, Columbus, Ohio, is demonstrating its own winning formula within the category with the new products it introduced last month: a line of all-natural microwaveable egg rolls, featuring EasyCrisp Pouches, which allow "au-thentic oven-baked quality" in just minutes. The new egg rolls have a flaxseed wrapper and will be offered in two flavors, chicken and vegetable. They require just two and a half minutes of preparation in the microwave, versus the typical 20 minutes it takes to oven bake egg rolls. The same EasyCrisp technology has been applied to Kahiki's traditional egg rolls, in chicken, vegetable and pork & shrimp.

"Consumers are looking for convenience, and that is why we are bringing them the EasyCrisp microwavable pouches," says Tim Tsao, vice president of sales and marketing. "We have seen the egg roll category, as a whole, decline-for us and our competitors. The (egg roll) pie is shrinking, primarily because it takes 20 minutes to cook an egg roll. The best-selling snack SKUs use microwave technology because consumers are looking for convenience.We had data showing that convenience is the number one thing consumers are looking for, followed by product taste and quality."

One of the newest players in the appetizers and snacks category is Golden County Foods, and its new Snapps brand, with a comprehensive lineup that includes: mozzarella sticks, cheddar and mild jalapeno bites, cream cheese & mild jalapeno bites, onion rings, mushroom bites, cheddar & bacon potato bites, cheese & pepperoni pizza Snapps, mac & cheese bites, and mini corn dogs.

The product line was launched in 2006 and is positioned to present important differences with other products already in the marketplace, explains Dan Horan, vice president of sales and marketing for the Plover, Wis.-based company.

"Snapps is a good product, in a sensible package and at a good price, with some support behind it," he says. "It's a portion control product with good ingredients that feature real cheese. These days branded products have to have a value message, but we didn't design the products to hit a price point. We adjusted the portions rather than the quality of the ingredients."

Based on Horan's extensive experience in the category, including his tenure at Anchor Foods, his market research for Snapps showed the need for a value message, portion control, and combinations of quality ingredients and value not available in some niches. Snapps' distribution has expanded to the Midwest, New England, and in the Southeast, but it's already a national brand on the basis of its presence in Wal-Mart and Save-A-Lot stores.

With the key elements of his program in place-the product positioning, the team and the facilities, Horan plans to launch new products in the first half of this year. Current plans call for several new items with some protein, such as ham and cheese, and a dessert item-brownie bites.

Chung's Gourmet Foods, Houston, Texas, was founded in 1986, but not until its current management team took over in 2005 did the company and its product assortment gain a higher profile. The key decision? Move Chung's Asian foods from the deli section over to where the foot traffic is, in the frozen food department.

"The founder, Dr. Chung, had some terrific recipes, but we knew we needed to have a destination category for the consumer who wants to purchase the best quality frozen food in Asian food," says Joe Mason, vice president of Chung's. "We revamped our packaging, and we include the best sweet and sour sauce in the industry with all our products. But the two things that propelled us are: We are a meat first product, so chicken and pork are first, not cabbage. We are higher in protein, with no trans fat, and all our products are made fresh daily. We produce it every day and it is frozen every day. And the products are authentic and hand rolled, not machine rolled."

The actual product line consists of about 18 items, including egg rolls, mini egg rolls and spring rolls. Based on recent IRI reporting, Chung's is hitting the right buttons with its new emphasis on frozen products. For the 52-week period ending Dec. 30, 2007, Chung's is credited with an 80% sales increase.

That level of sales increase has required Chung's to "manage" its growth to be able to hand roll its products while meeting the product requirements of Giant Eagle, Roundy's, Wegmans, Safeway, Albertsons, Kroger, Publix and several others.

"We can meet the needs of any retailers at this time, but as we continue to gain distribution, which we do daily and weekly, we have to continually review. We don't want to be in a position where we can't meet demand. We can buy more meat and vegetables and sauce, but we can only have so many shifts that can roll products."

Those challenges of meeting demand are unlikely to ease anytime this year, not with Chung's planning to introduce some new product extensions late this year. As Mason explains, "We have walked away from business because the cost of doing business (with individual retailers) was too high."


2008 Forecast: Holidays, School and the Economy

Looking ahead to factors that will be important to category growth in 2008, Bryce Ruiz, president and COO, Ruiz Foods, points to key promotional periods, including Cinco de Mayo, back to school, fourth quarter holidays, and major sporting events that offer opportunities to retailers.

"New products that are truly incremental to the current offerings need to find their way into distribution that, in turn, will create both excitement within the category and raise the volume bar as well," says Ruiz. "Whether filling a consumer's need or offering consumers affordability, El Monterey is developing new products that fit today's consumer lifestyle and budget needs, and will bring new users into the category."

Tim Tsao, vice president of sales and marketing, Kahiki Foods, suggests that category growth would almost certainly follow any possible economic downturn because more consumers would choose to eat at home more often, and kids would eat more snacks from their own freezer rather than buying them in restaurants.

"Frozen foods that appeal to family occasions-dinners, family gatherings, and after school snacks, would replace what people used to eat outside of the home. They would bring more frozen foods into their household because these products are more convenient and more cost effective. People in our industry know that frozen foods and consumer packaged goods would stay very stable through an economic downturn."


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