Up and Down the Street

This column shows that the pulse of the industry is felt “up and down the street,” where sales and marketing efforts influence consumers in a variety of retail venues — from “mom and pop” stores to warehouse clubs — snack products return profits for manufacturers and retailers alike.
As always, we welcome your comments and ideas for future “Up and Down the Street” columns. Please send them to SFA’s Vice President of Communications Ann Wilkes at awilkes@sfa.org or call her at 703.836.4500 ext. 204.
Nuts & Dried Fruit Sales Spiral Up
U.S. retail sales of nuts and dried fruit increased 7.9% between 2002 and 2003 to reach $3.3 billion, according to a new report from Mintel International. The popularity of these products is due to a number of reasons, including health claims touting the benefits of nuts, and new product and packaging introductions for both nuts and dried fruit.
Snack nuts and seeds represent the largest segment within the nuts and dried fruit category, totalling nearly $1.3 billion in sales in 2003, or 13% more than in 2001, notes the report entitled, Nuts and Dried Fruit. Within that category, snack seeds represented $101 million in sales in 2003, a 3.9% increase from the previous year; while sales of snack nuts in 2003 were $1.15 billion or an 11.8% increase from the previous year. Nuts used for baking accounted for an additional $497 million in sales during 2003.
Nuts continue to receive a boost from positive health news. Just last year, the U.S. Food and Drug Administration (FDA) approved the use of a qualified health claim allowing suppliers and marketers of almonds, pistachios, peanuts, hazelnuts, walnuts and pecans to include the following statement on their label: “Scientific evidence suggests but does not prove that eating 1.5 ounces per day of most nuts, as part of a diet low in saturated fat and cholesterol may reduce the risk of heart disease.”
Nut sales are also benefiting from an aging population looking for healthy snacks. While snacking is universal, Americans over 45 will have the strongest potential to impact the salty snack market. The sharp 27% rise in population of those over 45 from 2005 to 2010 could potentially help market sales as this group will represent over 30% of the population by 2010.
To appeal to consumers looking for convenience, manufacturers are producing on-the-go packaging for both snack nuts and dried fruit. These include easy-to-snack from containers — such as pouches and bags — that provide consumers with a convenient way to transport and consume the products.
Mintel’s report includes the results of consumer research among 1,004 adults, conducted during November 2003 by Technomictria; and data from The Simmons National Consumer Survey, carried out from June 2002-May 2003, among a sample base of 20,802 adults. When asked if anyone in their household uses nuts for cooking and snacks, 73% of the respondents answered “yes,” 25% answered “no,” while 2% either said they didn’t know or gave no answer. For those 65 and over, 80% said “yes.” The use of nuts in households decreased with younger consumers. Among those aged 18-24, only 46% answered “yes.”
Geographically, the highest usage of salted nut is in the Midwest at 80%, compared to 74% for the U.S.; while the highest usage of unsalted nuts is in the West at 58% versus 51% for the U.S. When asked where they typically purchase nuts or dried fruit, 77% of respondents said the grocery store, 12% said C-stores, 11% purchase them in health food stores, 10% in natural grocery store, 4% from vending machine, 3% at specialty nut stores, 11% responded “other,” and 8% said they don’t buy nuts or dried fruit. (See accompanying chart for a breakdown of what types of nuts consumers are eating based on the part of the country they live in.)
Concerning nut allergies, the report noted that based on research by the American Academy of Allergy, Asthma and Immunology, only 0.8% of families said they had an allergic child in 2002 versus 0.4% in 1997. “While accepting that many children grow out of allergies, such a rapid increase in allergy suffering among children is notable and should be monitored by players in this market,” Mintel advised.
The report concluded by noting that, nuts and dried fruit are strongly positioned as healthy and convenient snack options, and nuts are considered by respondents to be a good source of protein. Additionally, fat content does not appear to be a major concern of those who consume nuts. Opportunities exist in both the nuts and dried fruit categories to educate consumers both on the nutritional value and content of the products. Mintel predicts that total U.S. FDM sales of nuts and dried fruits will increase 32% at current prices and to increase 17% at constant prices over the five-year period of 2003 to 2008.
Mintel produces more than 600 reports each year, covering an extensive number of sectors and focusing on topical marketing issues. Snack Foods Association is proud to be associated with Mintel and is offering all SFA members a 10% discount on the new U.S Nuts and Dried Fruit 2004 report. To receive free contents page listings, please contact Caroline Sack at 1 312 943 5250 or email info@mintel quoting SFA04 to receive your discount.

Types of Nuts Used, by Geographical Region
 Type All
Salted 74 74 80 76 76
Unsalted 51 53 47 48 58
Dry roasted 67 66 67 66 70
Honey roasted 40 38 39 40 26
Oil roasted 16 16 16 15 17
Unroasted 25 24 24 24 26
Peanuts 65 66 65 63 62
Cashews 54 56 56 51 53
Mixed nuts 48 42 50 48 50
Walnuts 47 49 54 40 52
Pecans 42 26 46 50 30
Almonds 38 35 37 34 50
Sunflower seeds 30 26 29 28 39
Pistachios 27 35 23 22 32
Macadamia nuts 15 14 12 14 20
Filberts & others 6 6 5 5 9
Without shells 90 90 92 89 90
With shells 40 43 37 38 45
Where nuts are grown, weather and general trends in health and fitness all affect nut consumption in regions across the U.S. Source: Mintel/Simmons NCS based on 15,594 adults aged 18 and over, whose households use nuts.