Up and Down the Street
Will Innovative New Crackers Reverse Declines in Sales?
New cracker introductions are on the rise, even though the nearly $3.5 billion cracker market has experienced a 10% decline, at constant prices, between 1999 and 2004. In a new report, Mintel points out that despite a decline in sales every year since 1999, the number of new cracker products increased 129% between 2002 and 2004, and 73 new cracker products were introduced during the first four months of 2005.
A review of new cracker products shows healthier formulas and new flavors, as well as changes in packaging and new shapes/sizes. Even though the low-carb fad has peaked, consumers are slowly returning to crackers as a snack option. “But cracker manufacturers have to look for ways to make their products top of mind at mealtimes, not just snack times, if they hope to regain lost ground,” advised the report.
Crackers are eaten on a variety of occasions, including as a snack, with meals or as an appetizer. In a Mintel survey, 43% of respondents said they consume crackers only as snacks (see above). In a separate question, 31% said they eat crackers only with cheese or soups.
Fewer people are sitting down to a traditional meal, including ones with soup and cracker pairing. This is contributing to decreased cracker sales. Soups have been introduced that can be consumed from their container with one hand, but the addition of crackers complicates on-the-go consumption of them.
Other solutions, such as integrating crackers with canned tuna salad for a “meal kit” or with meat and cheese, may be a better solution for cracker makers. Still, the report recommends adding some novel twist to generate new interest in the “crackers and” concept.
On the positive side, says Mintel, manufacturers who have made snack crackers more like other snacks (marketing them in pouches or cups that fit in car cup holders, for example) may start regaining some of the ground lost during the height of the low-carb diet fad in 2002 and 2003.
In 2002, 95 new cracker products were introduced. The following year, new product activity surged with 155 new cracker products introductions in 2003 (a 62.3% increase over the previous year) and 218 in 2004. Low-fat, no-fat and reduced fat versions of crackers are the most common claims of new versions of crackers (see chart on page 61). All-natural and organic claims are the second and third most common. New, more sophisticated flavored crackers are also being introduced.
Types of Crackers
In a recent survey by Mintel, more than half of respondents (55%) who eat crackers purchased sandwich crackers in the previous three months, while 40% purchased specialty or gourmet and 39% chose low-fat or fat-free crackers. The survey, taken in February 2005, included 884 adults aged 18 or older who buy crackers. When broken down by age, sandwich crackers are more popular with younger adults (66% of those aged 18-34 purchased them in the previous three months, versus 43% of those aged 55-64).
Six out of 10 teenagers eat crackers, but 89% of children aged 6-11 eat crackers. Even though cute shapes and color-changing products are popular among children, Mintel suggests that marketers need to take a different approach to appeal to teens — one that is novel and teen-specific, such as bold flavors.
As for the future of the cracker market, Mintel predicts that total U.S. retail sales of crackers will increase 3% at current prices but will decrease 12% at constant prices from 2004 to 2009.
This month’s Up and Down the Street is based on Mintel’s U.S. Crackers Report. For more information on the study and to receive a free table of contents, please contact Meesham Neergheen at 1-312-943-5250 or firstname.lastname@example.org. Mintel is pleased to offer all members of the Snack Food Association a 15% discount on this new report. Please reference SFA05 in your correspondence to Mintel.
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 email@example.com or call her at 1-703-836-4500 ext. 204.