Snyder’s-Lance marketing chief Rod Troni has no doubts about what is driving growth in the snacks market.
“Lifestyles have taken us to a place where snacking is an intrinsic part of the day,” he says.
And he’s similarly clear about what this means for the role of Snyder’s-Lance (S-L), owner of brands including Snyder’s of Hanover, Cape Cod and Late July.
'It’s a simple strategy'
“We need to give consumers choices for their snacking needs across the day – if we do that well we are rewarded,” he told BakeryandSnacks at the Sweets & Snacks Expo in Chicago last week. “It’s a simple strategy.”
In order to execute that strategy, S-L needs to keep pace with changing consumer demand, which has meant renovating its established brands. It’s already done this with brands including Lance crackers, and is now doing so with Snyder’s of Hanover pretzels.
“We are focussing on two things – renovating established brands and accelerating the growth of new brands [such as Late July],” says Troni, a Cadbury veteran who joined Snyder’s-Lance two and a half years ago. “That is why we are in such a great sweet spot.”
“Renovation has become a significant tool in our tool box,” he adds. “In the old days people used to think ‘my mum bought this brand so I will buy this brand.’ That doesn’t happen anymore, which is why small brands can do so well and why it is important to renovate older brands.”
Adaption, not reinvention
But he stresses renovation is not about reinventing a brand, but about adapting it.
The company is looking to turn around the pretzel market that saw flat value sales in 2015, and sales of Snyder’s of Hanover down 3.3% year on year to $415.6m [IRI 52w/e 27 December 2015]. And Troni seems confident they can do it.
'A lot of people told me, when we started renovating Lance crackers, that I was wasting my time'
Rod Troni
“We did it two years ago with Cape Cod and that brand is now growing fast, we did it with Lance last year,” he says. “A lot of people told me, when we started renovating Lance crackers, that I was wasting my time - now the brand is growing double-digit.”
When renovating a brand, the business looks at six key areas: product, price, promo, place, consumer and customer.
Says Troni: “It’s nice and simple, 1970s marketing, but if it works why change it?”
While the basic pretzel recipe has not been touched, the company has developed new flavors to make the brand more relevant, such as a S’mores variant.
'E-commerce is not going to take over'
There will always be a role for bricks and mortar retail in the snacking industry, believes Snyder’s-Lance chief marketing officer Rod Troni.
Speaking to BakeryandSnacks at the Sweets & Snacks Expo in Chicago last week, he said the impulse nature of the snacks business will guarantee the “survival and thriving” of bricks and mortar.
“A lot people say e-commerce will take over,” he said. “E-commerce is not going to take over – it will continue to grow – but you will never take away the nature of this industry, which is impulse.
“Yes, you are going to buy boxes of your favorite snack through e-commerce, but you are still going to buy a lot of stuff on impulse. And you can’t do this in e-commerce, when you see it on a screen it’s not the same.”
Snyder’s-Lance operates its own direct-to-consumer e-commerce site, and Troni said its key role was to make people aware of the wide range of Snyder’s-Lance products.
“The site allows us to make the whole portfolio available,” he added. “People may come to the site to buy pretzels but may not be aware we also do Lance crackers or Late July tortillas.”
“We are introducing more complex flavors; sweet and salty, and sweet and spicy,” adds Troni.
Ensuring brand is relevant
The activity has been supported with lighter, more contemporary packaging, and the ‘Pretzels baby’ marketing campaign that started a few months ago. The key is ensuring the brand is relevant to modern consumers, according to Troni.
“Everybody loves pretzels, but there are now so many snacks that some people might sometimes forget them,” he adds. “Through our new campaign we are giving personality to the brand so they move from the back of the pantry to the front of the pantry.”
Initial results from the campaign have been “very good” he says, adding it has generated a lift in consumption.
Further innovation is planned for the second half of this year, which will focus on shapes.
“The flavor of pretzels is universal and well-loved, but shapes have been a bit stagnant for a while without much innovation, and we are addressing that,” says Troni.
All the company’s activity is being driven by consumer trends – and chief among these is the prevalence of snacking.
Traditional consumer segmentation doesn’t apply
“As consumers snack more and more, you could argue that traditional consumer segmentation doesn’t apply anymore,” says Troni. “In the old days you would say 'that’s our target consumer' - the reality is now that lifestyles have taken us to a place where snacking is intrinsic.”
He adds that, in light of this, the current industry obsession with Millennials may be misplaced.
“The only difference with Millennials is that a lifestyle on the go is not strange for them. So for them to graze through the day is the most natural thing.
“Companies are spending millions trying to understand this and there is nothing to understand – our DNA is made to graze instead of to sit down and eat huge meals. That is a Western invention. What Millennials are doing is simply reconnecting with grazing, and snacking is the perfect solution for grazing.”
People get together to snack too
And he doesn’t agree with the idea that the growth of snacking, and erosion of mealtimes, is harming American families.
“I’ve heard say the fact 51% of America is eating three snacks a day is destroying the essence of the American family,” he adds. “Not at all – people get together to snack too – that’s why dips have grown so much. You don’t need to be sitting for two hours to connect with your family.”
Another key focus for the business is demand for better-for-you products such as non-GMO and organic.
Consumers are looking for cleaner foods, and organic is the ultimate representation of this, says Troni, and offers consumers clarity. But not everyone wants organic.
Non-GMO is great for majority
“There is a large market out there that still thinks one of two things: that organic might sacrifice taste, or that organic is not affordable,” he adds. “Therefore, a non-GMO pretzel is great for the majority of people. A smaller proportion want an organic pretzel and that’s what we are also offering - but the rate of sale between one and the other is ten to one.”
Troni adds that the drive towards better-for-you products has benefited from greater availability of ingredients – with the rise of non-GMO ingredients the best example of this. He adds that gluten-free is also growing quickly.
“But that was totally on us,” he adds. “We needed to segregate part of our plant to ensure gluten-free products – and that required investment and dedication to ensure that gluten-free pretzels deliver on taste.”
European expansion
Snyder’s-Lance has also grown its footprint in the better-for-you market through the acquisition of Kettle owner Diamond Foods. The deal completed earlier this year and Troni says integration is going well.
“We’ve done it before – Snyder’s and Lance merged only six years ago – we know how to do a good integration,” he adds.
The acquisition has given the business an opportunity to extend into Europe through the UK Kettle Crisps operation, something the company will explore.
“We will be looking at what parts of the portfolio we can expand through the beachhead in the UK,” says Troni. “We are looking at all of our brands - some of our strongest brands are not yet developed in Europe but are very well suited for European consumers.”
Indulgence will also grow
As for the wider future of the snacking market, Troni is confident what direction that will go.
“Snacking will continue to grow. Lifestyle is driving a culture of grazing and snacks are the perfect answer to grazing,” he says.
“The trend for cleaner eating and snacks that are better for you will continue to grow, but there is a beautiful dichotomy,” he adds. “A very busy lifestyle will encourage people to treat themselves more often, so indulgence will also grow.”
“I tell my team that better for you is becoming more indulgent, and indulgent is becoming better for you.”