Managing editor, Marina Mayer, discussed the latest snacking trends with Mark Devencenzi, national sales director for SunRidge Farms, Pajaro, Calif., as part ofSnack Food & Wholesale Bakery’s 2009 State of the Industry report.
Because we gathered too much information that couldn’t make it into print, we instead published the “uncut” versions from our interviews.
Check out what Devencenzi has to say about the company, its new products and the forecast for bulk products and going green.
Snack Food & Wholesale Bakery:What are the emerging consumer trends in the cookie category and how are they driving sales?
Mark Devencenzi:What we’re looking to take advantage of is the drive for all-natural and organic products. Of course the current economy has put a slight crimp into the growth. Factors of organic are still growing but certainly not the same percentages as it used to.
SF&WB:How are you meeting those trends with new products introduced over the last few months? Please describe new products, including the month introduced, varieties, benefits (i.e., gluten free, contains Omega-3).
Devencenzi:We’ve come out with this all-natural frosted star cookie line. Basically it’s something new and different in the cookie category, and it’s something that’s all-natural with no artificial flavors, preservatives, chemicals, no trans fat, certainly we don’t use any hydrogenated oils, and we only use real vanilla with no artificial flavor or preservatives.
And what we’ve done is we’ve taken four flavors of these star cookies: we of course have the traditional milk chocolate, and we’re doing a peanut butter frosting. We’ve also got a raspberry frosting and a cinnamon frosting. And actually the cinnamon has captured a lot of people, myself included. I didn’t think that it was going to be my favorite one out of the bunch but it is. It’s a vanilla cookie center and then the same vanilla cookie with the four different flavor frostings.
It’ll also cross age groups because the star shape is attractive to kids because they all relate to stars. I remember a cookie line when I was a kid that was like iced animal crackers. I think the product is in some ways sort of a more adult version of that product. It’s a higher quality, better-tasting frosting with a good-quality cookie underneath it.
SF&WB: What are your top-selling products and how have they changed from two or three years ago?
Devencenzi:Our top-selling products have really been our yogurt-covered pretzels. We also sell a lot of almond products. Our dark-chocolate coated items have really gone over. The top two to three years we have seen a tremendous rise in sales of our dark chocolate because of all the health benefits that we’ve read about and seen on TV. And when you combine the dark-chocolate coating with a very nutritious item like a blueberry, a pistachio or an almond, you have a very high antioxidant product.
SF&WB:Have you redesigned your packaging? If so, how and why?
Devencenzi:We have our package line, our SunRidge Farms bag line, which comprises of about 60 or so items across the categories of nuts and dried fruits and coated-pretzel items. And it’s similar packaging, but what we have done is we have two new items coming out, two new trail mix-type items that are actually formulated.
One is called Women’s Vitality Mix because it’s been formulated with women’s health in mind. We’ve got calcium-enriched chocolate chips, we’ve got soy nuts because soy is a benefit to women’s health, we’ve got pumpkin seeds that have a lot of iron and foliate.
And then we have a comparable mix for men called Omega-3 Men’s Energy Mix, and in that one, we’ve got cranberries that are enhanced with Omega-3 for heart health, we’ve also got sunflower seeds and pumpkin seeds for again, the foliate and the iron. We’ve got almonds for antioxidants.
And what we’re doing for the packaging on those two, is that for the first time, we’re going to state some of the benefits of the products with the high antioxidant level, calcium-enriched, we’re actually going to be putting some of those statements right on the front of the package.
SF&WB: How are you merchandising/promoting your products?
Devencenzi:We merchandise both in bulk and in packages. We package in tub packs as well as in Ziploc stand-up bags.
And as far as promoting our products, we’ve taken a little bit of a different tact this year. We’re working with a media relations firm rather than doing some print ads, so we’re getting articles placed that talk about the benefits of our line, the all natural and/or organic.
We are very interested in being as green as we can. We actually installed 540 solar panels on our plant about two years ago, and during peak power times, we’re getting about 70-75% of our power from our solar panels. Our semi-trucks use biodiesel and for a number of our sales people, we’ve given them hybrid cars to drive. We have a bike-to-work program where employees get $5 a day if they bike to work. We’ve got yoga rooms, we’ve got a gym that we put in. Sort of our vision is to be as green as we can be and provide healthful products to people.
SF&WB:Where are the greatest opportunities for growth in your category?
Devencenzi: I think the greatest opportunity is what we’ve seen over the last five to 10 years of the general population really looking at what they’re eating and what they’re feeding their children and wanting to have fine products that are less processed. And actually now you’re lowering your carbon footprint by using products that are less processed and by buying products in bulk because you don’t have all the access packaging. So for us, it’s trying to do the most we can without using any chemicals or artificial ingredients. People are living longer and they want to live better. If you live longer, hopefully you can live healthier and are able to enjoy that long life.
SF&WB:What are the biggest challenges facing companies that compete in your category? Why?
Devencenzi:Of course pricing for organic and all-natural products is going to be more dear than it is for a product that is a conventional product -- a higher cost to grow the commodity crops, higher processing costs to make a finished good without using chemicals and preservatives and trying to have a decent shelf life with a product that tastes good. And of course with organic ingredient sourcing, there’s much more limited supplies of organic ingredients than there are of conventional, and again, they’re usually more expensive. So it’s a limited supply. You know, you’re uncertain sometimes whether you can fill the customer’s needs. If you’ve got a customer that has been very successful with your product, it’s a balance to try to make sure that we can supply them with their needs and the product continues to be organic and all natural.
And another challenge we have is, how can we lessen our environmental impact? How can we try to use less packaging? How can we try to use renewable sources of energy as we manufacture?
SF&WB: What are the biggest challenges that your customers face and how are you helping them solve those issues?
Devencenzi:Well our customers right now are facing the challenge that the economy brings, and that’s trying to offer products at a reasonable price and trying to offer good, nutritious products at a reasonable price. We’re seeing consumers forced to have to try to stretch their budget dollar for food and a lot of it is trying to feed your family on less money and trying to feed them nutritious products is not easy. By trying to feed them in bulk, we think that that’s a great thing.
Bulk food sales have increased in popularity, and we are seeing a growth in bulk sales for a couple of reasons. One is price point because when you’re buying in bulk, you’re not paying for all the added packaging, for the materials and labor it takes to package products. And also you can buy what you want in bulk. If you want to buy an ounce of pine nuts because that’s what’s in a recipe, you can buy an ounce of pine nuts instead of an 8-oz. bag. If you want to buy a pound of rolled oats, you can get a pound of rolled oats at a very good price in bulk. Or if you want to buy star cookies, that we just came out with, in bulk, you can buy 3 oz. of star cookies rather than buying a box that has half a pound in it. So we’re seeing people being able to buy what they want and at a better price in bulk.
SF&WB:Have your brands branched out with new “hybrid” products that compete in other categories? For example, introducing a pretzel or whole grain crisp to compete in the salted snack arena. Or developing a cookie product that competes in the snack bar category.
Devencenzi:Well I think I just have to harcken back again to these brand new star cookies that we’ve seen a good reaction to in the marketplace. We’re just getting them placed, it’s a brand new product. We debuted it at the Natural Products Expo [in June], but we have some very good recepts on those and they are being placed in the some of the big grocery chains with some of the big natural food people around the country.
SF&WB: What is the economic outlook for the cookie industry and the economy in general?
Devencenzi: Well I think the economic outlook for the industry is still very good. As I mentioned just a little while ago, the fact that people are paying more attention to the type of food that they’re eating really for our industry, which is a natural and organic industry, more so than your cookie industry. But I think from my point of view, the cookie and snack industry is well positioned also. It’s an industry that enjoys great popularity and I don’t think we’re going to see people move away from snacks, cookies, pretzels and those sorts of things, and they’re usually not too high on the price scale. I think the economic outlook is good for our category.
SF&WB:Would you rather have the commodity crisis of last year or the recession that we are in now? Why?
Devencenzi: Would I rather have one or the other? That’s a tough question. The recession is helping to ease the outrageous cost pressures that the commodity markets had last year where it seemed every week there were, again with the 1,000 items we carry and with all the ingredients that’s in them, we were seeing commodity cost increases by the day. They were really hard to keep up with and retailers were really getting frustrated and so were consumers. So in that respect, I’d rather not have the commodity crisis of last year.
But then again, we certainly don’t enjoy having the recession that we’re in right now. But what that’s done is help bring down the retail prices too. So the consumer is enjoying the advantage of some lower pricing but on the other hand, the money to buy those goods with is tighter. So in essence, I’m not choosing one or the other, but they have had an effect one another.
This year’s theme for the 2009 State of the Industry was superheroes. That said…
SF&WB: What are the biggest forces of good and evil impacting the industry, and why?
Devencenzi: I think the forces of good are companies that are able to offer healthier products without hydrogenated oils and trans fats and without chemicals and without artificial ingredients. I think those are some of the good things that we’re seeing.
As far as the evil goes, certainly trying to maintain the safety of our food chain as we’ve seen the consumer impacted with some problems with salmonella, both with peanuts and pistachios. We did get affected by the peanut recall, [but] we were fortunate enough that we weren’t impacted by the pistachio recall [though]. Although our products were safe and did not test positive for salmonella or for any other problems, we had to destroy a very, very significant amount of product due to the problems that the peanut companies had. So in essence, we think that the food safety has become a bigger issue. I think all manufacturing companies are taking a good hard look at their processes and trying to ensure that every product that we put out there is totally safe for the consumer.
SF&WB:What does it take to be a superhero in your category, and why?
Devencenzi: Developing unique and great-tasting product that meets the criteria of being natural and/or organic. I think that’s what it takes to be a superhero in a category. And also being offered at a reasonable price. I think we’re all taking a look at what we’re going to be trying to introduce and keeping in mind that we do have to watch the price points that the products are going to command because consumers just aren’t going to be able to pay premium prices for products these days. So we’re trying to get reasonable pricing on great-tasting products.
SF&WB: What types of trends are “saving the day” in the industry?
Devencenzi: Well certainly from our point of view, companies trying to be more green. We’re seeing a lot of it now where traditional food companies are really taking seriously our environment and the footprint that their own companies have and trying to improve on a daily basis.
Companies are trying to limit the amount of packaging they use, trying to be more efficient with their pack types and making sure that packaging is recyclable. Certainly consumers are recycling at greater levels than they’ve ever done. There’s been a good job, well done campaigning to have people recycle in their neighborhoods.
And another trend trying to save the day is developing products that are better for you.