Niche players serve up snacks for health-conscious

Left: Starbucks caters to the health-conscious consumer with an “In With the Good” display of healthy and organic snacks that would make a nice fit in the drug channel. Right: Annie’s snacks are a popular and organic purchase at Walmart, Safeway, Kroger and Target.

Natural and organic trends aren’t going away. Consumers have shown that they are willing to pay more for snack foods that offer them a nutritional benefit—especially when they are buying those products for their children. Consumers often are looking to small, niche players in the category for new product flavors and formulations to offer them something new. Retailers, from convenience stores to coffee shops to mass merchants, are reacting.

Starbucks recently created an “In With the Good” display, featuring healthy and organic snacks. On-display advertising read: “These are some of our favorite snacks made by people who share your passion for eating well.” The display included bagged snacks from Annie’s and Food Should Taste Good, nuts from Sahale Snacks, gluten-free cookies from Dr. Lucy’s and granola bars from Two Moms in the Raw. In its efforts to expand its snack food selection, Starbucks clearly sees an opportunity in healthier options.

“There’s a lot of demand for healthy snacks on the go, and it’s an open canvas for retailers,” said Melissa Abbott, culinary insights and trends manager at the Hartman Group. The Starbucks display, she said, is all about quality products that tempt consumers to try something new.

“Healthy eating is here to stay,” said Josh Schroeter, president and co-founder of Sahale Snacks, whose seasoned nuts were included in Starbucks’ display. “It’s a trend that may have started in health food stores and Whole Foods, but it has been integrated into supermarkets and mass merchants.”

Sahale, which created barbecue almonds for Starbucks, is rolling out the almonds and two other varieties of flavored nuts—Tuscan almonds and southwest cashews—to other channels. The brand also has launched Biscotti chips—light, chip-like whole-grain crisps with fruit and nuts that will retail for $4.99 for a 5.5-oz. bag. Schroeter said the convenience store channel is expanding its selection of healthier snacks, and Sahale has made inroads in that channel. The company now is testing its products in some drug chains and expected to expand its reach in that channel this year.

“A lot of people walk into a drug store with health on their mind, and it’s a good opportunity to offer healthier snack options that consumers have had to go elsewhere to purchase,” Schroeter said.

John Foraker, CEO of Annie’s, said consumers are buying his company’s snacks at Walmart, Safeway, Kroger and Target, but distribution in drug stores remains limited. “Eating foods without fake ingredients is very mainstream,” he said. “Drug stores are leaving money on the table by not carrying products that their time-crunched consumers are buying everywhere else.”

Products like Dr. Lucy’s cookies, which are fat- and cholesterol-free and are available in grab-and-go four-packs for $1.50, would seem like a natural impulse purchase for that hungry patient waiting for a statin prescription. “Drug stores are already dedicating real estate to the cookie category. There’s no reason we shouldn’t be there,” said Lucy Gibney, president and CEO of Dr. Lucy’s.

The Hartman Group’s Abbott said the Starbucks display does a good job of grouping premium products—some of which were made specifically for the company—in one place. While chain drug retailers can look to niche brands to inspire their customers to try new snacks, Abbott said they also could be more adventurous with their private-label products. “A lot of private-label brands are just knocking off the top mainstream CPG brands,” she said. “They can do so much better than that by localizing the brand or opting for more natural or organic options with new flavors.”

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