The challenge for snack developers is finding a new success, not a simple matter in an industry where nearly three quarters of launches fail. Many retailers and vendors opt instead for line extensions, a far safer bet, and one such type of product has proven quite popular lately--chip-and-dip kits.

The trend toward prepacked chip-and-dip snack solutions began last year with Frito-Lay's launch of Tostitos Chips & Salsa snack kits and Frito Sloppy Joe and Scoops. The company has since added a Scoops and chili and a Scoops and cheese dip offering to its Healthy Combos line and recently added a Ruffles & French Onion Dip snack kit.

Not to be outdone, Procter & Gamble is taking advantage of its Pringles brand and is test marketing the potato crisps in a prepacked snack food combo called Zip Dip, which pairs a single-serve can of Pringles Crisps with dip.

The chip-and-dip combinations serve an important consumer need, notes Lisa Van Riper, director of public relations for Frito-Lay. "Consumers are time crunched and looking for ways to shorten snack and meal preparation time. These kits combine consumers' favorite chips with dips in one convenient package that can be carried in backpacks or to the soccer field."

Mass-market retailers are adjusting assortments and gearing limited shelf space to satisfy this growing consumer appetite for on-the-go meals in easy-to-handle packages. The consumers targeted, however, do not fall into any one category and vary among ages and groups.

"A lot of kids eat snacks," says Ramona Bennett, marketing manager with Cargill Salt, "but there is the target of older people. People who are 60 or 70 probably did not eat as many snacks, but people in their 40s and 50s grew up with snacks. That is also where manufacturers are seeing the meal shift. At one time, sandwiches were more of a lunch thing. Now, people will actually have a sandwich and chips for dinner because it is quick and easy. So, there is really not a target per se. Manufacturers are really going to have products for a full range of people, because anybody is open to eating snacks."

Merging Stars

As Bennett observes, "People working on R&D on different product lines, all of a sudden, now get to look at salty snacks, and maybe it will be an interjection of new blood. I would think you might see some different types of snacks."

Already in today's marketplace, the options for salty snackers are more varied than ever, and new flavors, forms, baked and low-fat varieties have all helped fuel the category's growth. Unique and spicy flavor combinations are the latest rage, and chipotle--dried, smoked jalapenos--may be flavor of the year, according to seasoning makers.

"We have seen more spicy snacks," says Bennett, "snacks that have more exotic spices. Foods used to be more bland, and with all the different demographics and with people having more exposure to eating different products, then they look for that [variety] when shopping for snacks."

The consumer has a range of options, but one company seems present in every market, says Tom Brunner, regional sales manager with Cargill Salt. "Frito has a dominant national share, but regionals have a dominant share of the specific markets where they compete. It seems things have tightened up to the point where everybody has a pretty good sense of where their market is and what they have to do to maintain it."

Many of these regionals have, in fact, had gourmet chip products that faced no competition from the major national brands. That fact has now changed with the debut of Lay's Bistro Gourmet Potato Chips.

"With this chip," says Van Riper, "Frito-Lay can deliver a gourmet potato chip nationwide to consumers who want a step above the ordinary. Before Lay's Bistro Gourmet, consumers in many regions of the country did not have access to premium potato chips. There were only regional gourmet chip players prior to the introduction of Bistro Gourmet.

"The idea was to tie in to the premium food trend and give premium chip consumers nationwide a gourmet chip that meets their needs. Bistro Gourmet competes in the gourmet potato chip category but is different from other gourmet chips because it is distributed nationally, delivers a fresh product, unique flavors and a texture that is slightly crunchier than regular potato chips."

The development of Bistro Gourmet called for Frito-Lay's product development experts to try completely new things, including working with an outside partner in development, a first for the company.

As Van Riper recalls, "A team of Frito-Lay seasoning experts and food scientists spent two days with chefs and students at the Culinary Institute of America to identify 300 flavor profiles that leveraged the latest in popular food trends. We then culled down the flavor profiles to less than 100 and used them in consumer testing to determine the final four flavors that are in the market today: Bistro Classic, Sharp Cheddar & Jalapeno, Roasted Garlic & Herb, and Applewood BBQ & Smoked Cheddar."

Source: IRI/PF

The Health You Say

"Fat free does not appear to have developed to the level that people would have hoped," says Brunner. "I would suppose the market is still there, but it is probably limited. The olestra thing may have come and gone--where fat was a big concern. Maybe a pocket of people is interested or concerned."

"People are getting a little more savvy," says Bennet, "and understand that fat free does not mean calorie free. Then, they look at the ingredients and see it has the same amount of calories, because the manufacturer has just dumped a bunch of sugar in it. So people are getting a little more savvy and realizing what the difference is, and usually, the fat free does not taste as good. They are saying, 'If I want to eat something, I would really rather just have something that tastes good and maybe eat a smaller portion of it. Or maybe buy all-natural that does not have a lot of preservatives in it versus the fat-free that tends to have way more additives.'"

The fat-free food varieties may be waning (dropping more than $300 million in sales since their peak five years ago), but that should not be taken as a sign that consumers are less concerned about their health. They are, in fact, showing more concern for balanced nutrition, health and convenience.

As Bennet concludes, "The other thing we are seeing and will continue to see is more variety with regards to organic and natural snacks. GMO-free and healthiness is going to be a major concern. The reason is that 50-55% of Americans are overweight, and diabetes is on the rise and probably will be a major problem facing Baby Boomers. Plus, there are more overweight children, so people are, where they can, cutting down and looking at things. They are still going to buy snacks, but they may look to more organic, more natural, items, without as many preservatives. You are also going to see the same thing with salty snack foods as with other foods. They are going to start playing around with functional foods. There will be all kinds of vitamins. You saw it with orange juice and with candies and health foods, and consumers are going to start seeing it in other venues, also." -PF