Is the Cupcake Trend Over? Battle for “Share-of-Stomach” Heats Up!

April 18, 2013

Over the past decade, we have seen a shift in the frozen treat and snack category with many short-term category trends gaining steam and eventually showing unsustainable growth in the longer term.

Lessons from the past

krispy-kreme-donuts_150Krispy Kreme’s singularly focused menu of sweet, craveable doughnuts led to rapid expansion for the chain in the later ’90s. Peaking in 2005 with sales in excess of $1 billion, the company has since declined and settled down with annual U.S. sales today of $570 million. Although the chain’s growth over the past two years has been slow and steady, Krispy Kreme has shifted unit development globally by bringing products to international marketplaces; today Krispy Kreme has more than 500 locations outside the U.S. compared to just 239 domestically.

Cold_Stone_150.Cold Stone Creamery was at the heart of a premium ice-cream movement. Its rapid growth in units helped the chain achieve peak annual sales in 2007 of nearly $500 million in a frozen-dessert category of $7 billion. Then premium ice-cream players suffered from the recession as increased unemployment and declining disposable personal income—among other economic factors—prevented consumers from indulging in ice-cream purchases. Today, Cold Stone Creamery has broadened its offering with ice-cream cupcakes and shakes and continues to manage sales of $355 million.

Crumbs_150“Sex in the City” and Magnolia Bakery sparked a cupcake revolution and national craze that led to upstart brands like Crumbs Bake Shop, Sprinkles and Gigi’s Cupcakes adding locations. Independent cupcake shops have also popped up in most major cities in recent years, while supermarkets have expanded their cupcake offerings for in-store bakeries. Although Technomic estimates the retail cupcake shop segment to be in the range of $200 to $250 million annually, this segment appears to be maturing and flattening in the restaurant lifecycle curve as other desserts build greater momentum.

Pinkberry_150It is worth noting that frozen-yogurt brands like Yogurtland, Pinkberry, Menchie’s and Red Mango are still in the high-growth stage of their lifecycle.  Frozen-yogurt chains within the 2013 Technomic Top 500 Leading Chain Restaurant Report as a whole increased their sales by 20%, with net unit growth of over 25%. The high appeal of frozen yogurt’s broad flavors, customization options and “health halo” consumer perception has given other sweet-treat operators (like cupcakes, traditional ice cream and doughnuts) a run for their money. This trend will likely continue to grow in the short term based on the low cost of opening a store and the franchise brand availability and appeal.

So what’s next? 

We could see growth of numerous dessert trends such as chocolate-covered bacon shops, cream puffs, churros or perhaps macaroons.  One thing that isn’t changing is consumers’ interest in craveable sweet and savory snacks.  Health and lifestyle considerations will also remain a consideration but a balance with indulgence will likely provide ample opportunities for both healthful and decadent treats.

In today’s restaurant space, growth has become a battle for share:  as one category grows, another will fall victim.


Health Is Good Business For Restaurant Chains

February 27, 2013

Growth at fast-food and sit-down restaurant chains is coming primarily from offering lower-calorie chow and drinks, according to a study released today by the Hudson Institute that’s partly funded by the Robert Wood Johnson Foundation.

“Over five years, chains that increased the amount of lower-calorie options they served had better sales growth, larger increases in customer traffic, and stronger gains in total food and beverage servings than chains whose servings of lower-calorie options declined,” according to a press release this morning.

A live-streaming of the formal release of the report — “Lower-Calorie Foods: It’s Just Good Business” — can been seen here from noon to 1:30 p.m. EST today. It analyzes trends at 21 of the nation’s largest restaurant chains, including McDonald’s, Wendy’s, Burger King, Taco Bell, Applebee’s, Olive Garden, Chili’s and Outback Steakhouse.

“The bottom line is, if restaurants don’t get more aggressive behind these low-calorie products, they’re leaving sales on the table,” Henry Cardello, director of the Hudson Institute’s Obesity Solutions Initiative and lead author of the report, tells the Wall Street Journal’s Julie Jargon. “It’s a business imperative.”

Lower-calorie servings are defined as sandwiches and entrees containing 500 or fewer calories, beverages with 50 or fewer calories per eight ounces and side dishes, appetizers and desserts with 150 or fewer calories, Jargon reports.

Federal regulations requiring operators of restaurants with 20 or more outlets to post calorie counts by early next year have no doubt put pressure on the industry to come up with the healthier fare but “many operators are finding that cutting calories, sodium, sugar and fat pays off,” Stephanie Strom writes in the New York Times.

Executives at several chains indicate they are just giving customers what they want.

“When the public starts saying it wants healthier options — and we are hearing that — we have an obligation to help show you what that means in our restaurant and give you choices to help you achieve that,” Pita Pit USA CEO Jack Riggs tells Strom.

“There’s also been a lot of finger-pointing at the industry by the media and others, including customers, that is spurring the movement,” registered dietitian Anita Jones-Mueller, president and founder of Healthy Dining Finder, tells Strom.

The Hudson Institute describes itself as a nonpartisan policy research organization dedicated to innovative research and analysis. The mission of Its Obesity Solutions Initiative is to bring about practical, market-oriented solutions to the world’s overweight and obesity epidemic.

This is all on the heels of a report published in JAMA Internal Medicine that Baby Boomers, despite all the stories that would have us believe they are exercising compulsively and eating healthily in a last rebellious refusal to act their old age — are actually in worse condition than the generation that preceded them.

Examining data from the National Health and Nutrition Examination Survey, West Virginia physician Dana E. King finds that while fewer Boomers smoke, have emphysema or get heart attacks, conditions such as diabetes, high blood pressure and obesity are on the rise.

“Only 13% of people said they were in excellent health compared with 33% a generation ago, and twice as many said they were in poor health,” King tells NPR’s Rob Stein. “And that’s by their own admission.”

King, who is among those troubled by the implications for health care costs as Boomers get ever older, traces the problems to more fat and less exercise.

Meanwhile, Pizza Hut on Tuesday offered free mini Big Pizza Sliders pies in pepperoni and cheese varieties for carry-out or dine-in at participating locations in “one of the largest product giveaways in the company’s history,” Ron Ruggless reports in Nation’s Restaurant News.

Normally, the new “mega mini pizzas” — reportedly 3.5 inches in diameter — come nine to a box for $10, or three for $5, and customers can choose up to three toppings on each, according to a press release from Pizza Hut. A tomato- topped pie contains 230 calories; add beef, pork and Italian sausages and you’re up to 350.

The Los Angeles Times’ Tiffany Hsu reported on the Sliders, as well as McDonald’s short-term Fish McBites promotion for the Lenten repast season, on Monday.

“Pressure from the nutritional disclosure legislation has prompted the food-service industry to reduce calorie counts in meals,” Technomic EVP Darren Tristano says in a statement quoted by Tsu. “As a result, Americans are now more inclined to ‘graze’ throughout the day, seeking snacks that provide fuel between traditional meal parts.”

Grazing (from the Middle English grasen, from Old English grasian, from græs grass, according to Merriam-Webster, and first used before the 12th century,) is a practice popularized by domesticated herbivores and adapted by homo sapiens sometime in the late 20th century. But with cows now munching on “taco shells, gummy worms and fruit loops,” as Andrew Moran reports on Examiner.com, how long will it be before they’re lining up at the trough for a mash of pepperoni, anchovies and mushroom Big Pizza Sliders?


February 14, 2013

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Foodservice Interchange 2013

March 4, 2013
Allstream Centre, Toronto

Meet One of Our Speakers

Darren Tristano, Executive Vice President, Technomic, Inc. will share key insights into the evolution of foodservice trends. Learn about trends migrating from the US and Internationally into Canada as well as some home grown Canadian influences making an impact elsewhere.  You won’t want to miss learning about the newest trends for 2013 and what these could mean for your business:

  1. Snacking, small plates and sharing blur traditional dayparts. Changing dining habits are impacting all dayparts. Consumers want their meals and snacks when and where it’s convenient. Expect chefs to get more creative by paring down traditional entrées into creative small plates, looking to street trucks for snacking inspiration, and incorporating more ethnic flavours and ingredients into sharing dishes.
  2. Taking chicken to new heights. The better-burger trend has spread like wildfire across Canada. Building off the burger trend, chefs will turn to the humble chicken as the next workaday food primed for a gourmet update. Look for increasing use of high-quality birds raised locally, naturally and humanely.
  3. Veggies find more prominence on the plate. Expect to see not just more locally sourced, in-season fresh veggies siding up to proteins, but more vegetarian entrées as well.
  4. Asian breaks out. From the burgeoning ramen scene in Toronto to Japanese tapas restaurants in Vancouver, expect to see interest in the multitude of food cultures that Asia has to offer. This includes not just up-and-coming Southeast Asian dishes from Vietnam, Singapore and Malaysia, but regional Chinese and Japanese fusion as well.
  5. Specialty approach to beverages. Artisan preparation and ethnic flavours are not just hot food trends—chefs are exercising their creativity beyond the plate with beverage innovation too. Restaurants are now crafting everything from craveable small-batch sodas to exotic refreshers like South American aguas frescas. Consumers are also seeking more authenticity at restaurants, particularly when it comes to ethnic dining. We’ll see more and more food-and-beverage pairings that complete an ethnic dining experience.

Date: March 4, 2013
Registration and Networking Breakfast: 7:45 a.m. – 8:30 a.m.
Conference: 8:30 a.m. – 1:30 p.m.
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For complete details: contact FCPC – Heather Spencer, heathers@fcpc.ca or 416-510-9050


A Snack Trend With Pop: Gourmet Popcorn Takes Over

February 12, 2013

113263407Move over, CrackerJack: The hottest snack food of 2013 is gourmet popcorn. And we’re not talking that bright orange stuff that comes in the tins you get around the holidays, or the vats with the synthetic butter you get at the movies. Today’s popcorn has gone seriously decadent, flavored with everything from black truffles to the Italian spirit Campari to wasabi.

Americans eat around 16 billion quarts of popcorn a year, according to The Popcorn Board, and artisanal, handmade varieties are garnering an increasing chunk of what was nearly a $1 billion market at the beginning of the decade. The Doc Popcorn chain, which claims to be the biggest popcorn retailer in the world since it began franchising in 2009, has grown by leaps and bounds; co-founder Rob Israel told CNBC that his company has 85 locations open and 300 in development.

The Boston Globe and the Syracuse Post-Standard both report that gourmet popcorn shops are flourishing. Maybe the economy is doing better than the data would suggest, if enough of us have the discretionary income to fork over $4 or $5 for a small bag.

Oh, that’s the other thing about this trendy treat: It’s not cheap. But snackers seem willing to pay for the variety and the convenience, says Darren Tristano, executive vice president at consulting company Technomic. “The consumer can’t create it easily at home, and when they’re out, they’re willing to pay more for it,” he says. “The impulse nature… and the convenience factor of getting it fresh is certainly going to go a long way towards that price point.”

“People come to our mall stores. They will literally buy a bag, eat it, and buy another bag,” Israel told CNBC.

Gourmet popcorn is even edging out the cupcake tower at trendy gatherings, with photos of and chatter about gourmet popcorn bars popping up on wedding-planning forums, blogs, and social networking sites like Pinterest. “Elaborately spiced and flavored popcorn has been showing up at events in 2012, and caterers are predicting that they’ll see even more in 2013,” the event industry trade magazine Catersource predicts.

Food marketing company the Sterling-Rice Group and the National Association for the Specialty Food Trade say gourmet popcorn is one of the top 10 food trends for the year. Sterling-Rice predicted popcorn will “explode” this year thanks to its “addictive” quality and its use as a vehicle for sweet and savory flavors.

Doc Popcorn’s flavors include the classics — caramel, a couple varieties of cheddar, sweet and savory buttered — as well as more unusual ones like jalapeno and cinnamon. Other popcorn purveyors push the envelope even further with flavors like bacon, buffalo and blue cheese, s’mores, spicy or salted caramel, stout beer, and cheesecake.

Aside from its versatility, the other reason behind popcorn’s newfound popularity is that the popcorn business is a relatively easy one to break into, Tristano says. The start-up costs aren’t exorbitant; the corn is simple enough to make with equipment that can fit into a kiosk or small storefront; and, as anyone who’s made a batch themselves can attest, it doesn’t take a high level of technical know-how to make the stuff.

Even though popcorn — the world’s supply of which is almost all grown here in the U.S. — was affected by the drought that afflicted the nation’s agricultural belt last year, experts don’t see that affecting its popularity, or, for that matter, its profitability. Although both retail and wholesale prices rose this fall, Reuters said, Tristano says the cost of the corn is only a small portion of a seller’s costs.

But will popcorn have the staying power of other food trends like bacon or cupcakes, or will it be a flash in the, er, kettle? “It’s a question of whether popcorn is enough to hang a retail business on for the long term,” Louise Kramer of the National Association for the Specialty Food Trade tells the Globe. ”As a popcorn retailer you have to keep it interesting and different.”


Trendspotting: Five Trends for 2013

December 10, 2012

stk310224rknConsumer demands for customisation, new flavour, better-for-you food, flexibility and speed will drive industry trends in the coming year.

The foodservice scene in the U.K. continues evolving in appealing ways, with some trends mirroring developments also seen in other parts of the world, while others are distinctly British. Looking forward, Technomic has identified five key trends expected to play major roles in the coming year, each based on consumer demand.

Customisation Encourages Experimentation

For customers, the lure of customisation is control. Restaurant-goers increasingly want more command over nearly everything on the menu, from ingredients and portion size to flavour combinations and healthfulness. They also want value and convenience, both of which are satisfied through a flexible menu. Operators who incorporate a service model of customisation into their concepts will propel themselves ahead of their competitors by creating unique, customer-created food and drink.

Think made-to-order meals à la Chipotle Mexican Grill. Five Guys Burgers and Fries is entering the U.K. from the States, seeing a market for its small menu of burgers that can be customised with dozens of toppings, as well as different rolls and proteins. Home-grown player handmade burger Co. taps the same opportunity, promising “our burgers are made to order, so if you would like to change any of the ingredients in your burger, please let out team know, and they’ll be happy to do that for you.” That’s after guests peruse the 40-some burgers already on the menu.

These operators recognise also that it’s safer for customers to experiment with a new flavour or ingredient if it comes along with something that they are already familiar with. It’s easier to add a chimichurri sauce to a burger, for example, than to select a foreign dish with a name that’s hard to pronounce.

Expect to see more operators branching out with creative approaches to build-your-own dishes, offering mix-and-match combo meals, and even making customisation a cornerstone of their concept.

Ingredients from Two Extremes

The U.K.’s current crop of leading independent chefs is striving to understand and cater to consumers’ disparate desires for both super local foods and authentic global foods on the same menu. Concepts that can satisfy both cravings in innovative ways will be the most successful.

Technomic’s recent U.K. Ethnic Food & Beverage Consumer Trend Report found that eight out of 10 U.K. consumers purchase ethnic foods and flavours away from home at least once a month, and half of consumers who live in London do so once a week or more often. Additionally, three in 10 U.K. consumers say they are eating ethnic food more than they were a year ago.

Younger consumers are even more likely to enjoy global food and flavours. At the same time, we generally find that younger people are also more likely to say they care about issues like sustainability and local purchasing.

Some restaurants are already using local ingredients in global preparations, such as Bohemia Bar & Restaurant, whose Roast Fillet of Local Line-Caught Pollack gets Asian influence from sweet-and-sour purée and hoisin sauce; and The Mistley Thorn, which offers Griddled Local Wild Bass “à la Niçoise.”

Watch for local British ingredients highlighted in street foods such as Middle Eastern falafel and Mexican tacos. Not only will such items excite diners’ palates, but they are also an opportunity for chefs to pioneer new flavour combinations and dishes without spending a bundle.

Stealth Health

Although healthy eating is an established trend, the stealth-health movement—in which chefs replace salt, fat and sugar with healthy, bold flavours without promoting it to consumers—is gaining ground.

On one hand, because consumers now expect healthy options in all restaurant types and segments, chefs need to comply by offering such without sacrificing flavour. Creating healthy yet satisfying meals is chefs’ new battle. On the other hand, there are still many consumers who say they want to eat healthful foods, and even say they do eat them, but when it comes time to order their meal at a restaurant, they don’t consider calories, nutrients or how much the ingredients were processed. In fact, those same consumers may perceive “better for you” items to have less flavour.

Some menu developers have decided that it’s to the benefit of all diners—if not their responsibility—to offer plenty of dishes that are made with healthier ingredients and preparation methods. Thus, even those consumers who neglect their health when eating out will eat healthier.

Next year will bring a surge in stealth-health ingredients, including superfoods like beans, dark-green vegetables, salmon, soya, walnuts, yoghurt, tea and blueberries, as well as standard dishes with a healthier spin.

Keep in mind that many concepts are unabashedly proud of promoting the quality and healthfulness of their food; witness Apostrophe and its Superfood Salad with sprouting broccoli, sweet potato, broad beans, kidney beans, beetroot, red onion, baby spinach, roasted pumpkin seeds, soya and balsamic vinegar. Apostrophe is one of the restaurants that have listened to their consumers in order to provide what they want. Regardless of menu trends, that is a smart tactic.

Snacking Matures

Consumers no longer have three meals a day, seven days a week. They skip meals, nosh throughout the day, and have breakfast food for a late-night snack. Eating patterns are inconsistent by the day and even within each day. And they want foodservice outlets to be prepared to accommodate.

Restaurant operators are expanding their snacking menus to boost traffic between dayparts, particularly from younger consumers. Retailers that have long dominated the snack market are now competing with restaurants to hold share of consumers’ snack pounds. As the snacking daypart grows up, so will the types of snacks on offer. Between-meal bites are maturing into gourmet offerings with the addition of high-quality ingredients and innovative flavour combinations.

More restaurants will be adding full snacking menus while others will look to discounting snacks during off-peak hours. Trends to watch include around-the-clock snacking, ethnic snacks and bite-sized offerings. Some new offerings that have already debuted in the U.K.: Cheddar Cheese Bites from Burger King, Cheese & Onion Bites from McDonald’s, and Jalapeño Bites from Southern Fried Chicken.

Swift-Service Concepts Cater to Hurried Diners

Convenience is top-of-mind for today’s consumer. Fast-paced diners want quick, portable and inexpensive meals that don’t sacrifice quality. Expect to see an upsurge in food trucks, quick-service and fast-casual restaurants increasing takeaway options and meal deals for on-the-go consumers.

Also expect to see a rise in express-version spin-off concepts from established sit-down restaurants. Some examples that we’re seeing already include Little Chef Express from Little Chef; Café Rouge Express from Café Rouge; Ed’s Shakes ‘N’ Hotdogs from Ed’s Easy Diner; and Giraffe’s Burgers & Cocktails by Giraffe, a replacement for its Giraffe’s Guerilla Burgers brand.

Key Takeaway

The trends driving restaurant growth and innovation are all driven by consumer demands for customisation, new flavour, better-for-you food, flexibility and speed. It’s worth noting that it’s a rare restaurant that would follow all of these trends. Trying to be all things to all people is generally a losing proposition in today’s environment. Savvy restaurant operators will examine and heed the trends, but follow the lead of their own customers and those they are trying to attract.


The Donut’s on Us Today, Say National Chains

July 13, 2012

Published: Friday, 1 Jun 2012, By: Katie Little, News Associate

There may be no such thing as a free lunch — but if you’re eyeing a free donut today, you’re in luck.

In honor of National Donut Day, Dunkin’ Donuts and Krispy Kreme Doughnuts are running in-store promotions on Friday and taking part in the opening and closing ceremonies at their respective stock exchanges, the NASDAQ and the New York Stock Exchange.

At participating Dunkin’ Donuts locations, customers can score a free donut of their choice with the purchase of any beverage. On Twitter, the company will also post donut trivia questions, and users who answer correctly will be entered for a chance to win one of six $50 gift cards.

Meanwhile, Krispy Kremes in the U.S. and Canada will give away a free donut of any variety with no purchase necessary.

The Nasdaq, whose opening bell Dunkin’ rang this morning, has unofficially changed its name to “NASDDAQ” and incorporated the company’s pink and orange ‘D’ letters along with a sprinkled donut into its logo. Krispy Kreme will stop by the NYSE to ring the closing bell.

In New York City, Entenmann’s Bakery will hand out free donuts at Madison Square Park and present a $25,000 check to The Salvation Army, which will be providing free coffee to celebrants.

National Donut Day was first established by the charity in 1938 in Chicago as a way of honoring the “Donut Lassies” who served soldiers the treats during World War I and helped raise money during the Great Depression.

The events’ organizers will also share a proclamation letter from Mayor Bloomberg in honor of the holiday. The event comes just one day after Bloomberg announced a proposed ban of the sale of sweetened drinks larger than 16 fluid ounces at restaurants, movie theaters and delis. If approved, the controversial plan could be implemented as soon as next March.

Despite their confectionery names, these companies rely on more than merely donuts to fuel their businesses.

“I think what we have seen is chains like Krispy Kreme, Tim Hortons and Dunkin’ Donuts that have shifted from being traditional donut chains to serve broader occasions and day parts,” said Darren Tristano, executive vice president at Technomic.

Despite the strength of the cupcake trend, Tristano said that sales in the donut industry have been relatively stable. He added that this continued donut popularity speaks to the rise of snacking and eating during off-peak occasions.

Dunkin’ has responded to this demand by expanding its line of bakery sandwiches. Michelle King, Dunkin’ Brands’ director of global public relations, said breakfast sandwiches are already popular with customers, who have been purchasing them throughout the day.

“All are familiar with a twist and cater to our busy guests who are snacking more frequently throughout a ‘clockless day,’ ” she said about the new sandwiches.

Although Dunkin and Krispy Kreme carry many similar products, Dunkin has enjoyed stronger sales and location growth compared to Krispy Kreme, according to Technomic estimates. At Dunkin’, U.S. sales grew 23 percent from 2007 to last year while Krispy Kreme sales fell 13 percent during the same period.

Part of Dunkin’s success is due to the popularity of its coffee product.

“In fact, we don’t even classify them as donuts anymore,” Tristano said about Dunkin’. “We have them in the coffee café category.”

Companies place added emphasis on coffee since it typically carries a higher margin than items, such as donuts. Customers who incorporate a restaurant serving coffee into their daily routine often go to that chosen store every day and may purchase additional items while there. “By providing coffee and other products in addition to donuts, industry operators hope to attract consumers to their stores more frequently,” said Agata Kaczanowska, lead industry analyst at the research firm IBISWorld.

In September, Krispy Kreme announced the launch of three signature coffee blends. The company has also stepped up its expansion efforts internationally; it recently announced new development agreements in India and Russia.

This international push follows declines in U.S. store locations in both 2008 and 2009, according to Technomic data. The company added one net domestic location last year.

“The issue with Krispy Kreme was that they broadened so much, you could get them at the grocery stores, the convenience store, so why would you get them at the restaurant?” Tristano said.

In addition to promoting coffee to drive sales, donut shops are reacting to another trend to boost revenue, Kaczanowska said.

“Another tactic that donut stores are using to boost consumer interest is offering smaller donuts, which have fewer calories and less fat,” she said. “These appeal to health-conscious consumers that may indulge more often when smaller portions are offered.”


A Snack Retrospective

June 25, 2012

Here’s a glance at some of the breakthroughs, events, products and happenings that took place in the snack food industry within Snack Food & Wholesale Bakery’s 100-year existence and even a ‘tidbit’ before.

By Lauren R. Hartman, April 23, 2012

 According to the website, ideafinder.com, we consume more than 4.3 billion lb. of snack food a year, which could be why snacks may soon end up becoming America’s favorite meal. What an interesting time for Snack Food & Wholesale Bakery to celebrate its centennial anniversary. Coincidentally, the Snack Food Association (SFA), Arlington, Va., an international association that has manufacturing members, including snack manufacturers and suppliers to the snack industry in more than 50 countries around the world, is celebrating its 75th anniversary in 2012. We congratulate the SFA on an incredible job. The association has provided us with myriad details about the past of snacks. With the amount of space available here, we can only briefly describe a few of the numerous events, milestones, breakthroughs and other happenings in snacks, that have experienced an incredible ride through the last 100 years and beyond.   

We can’t really describe what has taken place over the last 100 years in snacks without going back a bit farther in time. A global industry today, the snack food business, with all its pop, flavor, chewiness and of course, crunch, has billions of fans who might not have ever paid attention had fate not intervened nearly 160 years ago in the resort area of Saratoga Springs, New York, and 75 years ago in Cleveland.

Inventions and accidental discoveries

If you can’t eat just one potato chip, blame it on chef George Crum. He reportedly created the salty snack in 1853 at Moon’s Lake House near Saratoga Springs, New York. Fed up with Commodore Cornelius Vanderbilt, a frequent customer, who continuously sent his fried potatoes back, complaining that they were soggy and not crunchy enough, Crum sliced some potatoes as thin as possible, fried them in hot grease, then doused them with salt. Bingo.

Vanderbilt loved them, and “Saratoga Chips” quickly became a popular item at the lodge and throughout New England. Eventually, the chips were mass-produced for home consumption, but since they were stored in barrels or tins, they quickly went stale. Then, in the 1920s, Laura Scudder of Anaheim, Calif., invented an airtight bag by ironing two pieces of waxed paper together, which kept the chips fresh longer. Today, potato chips are packaged in metalized polyester or foil bags or paperboard containers. The chips come in a variety of flavors, including sour cream and onion, barbecue, salt and vinegar and even some that taste like hot dog relish.

In the 1890s, William Tappenden, an entrepreneur in Cleveland, decided to make a business out of cooking and distributing potato chips. Tappenden mastered the art of cooking paper-thin chips on his kitchen stove and soon started delivering them to local grocery stores in a horse-drawn carriage. Business picked up, so he turned his barn into a potato chip factory.  Competitors across the country quickly copied Tappenden’s concept, and the snack food industry was born.

What’s more, around 1886, Charles Cretors of Chicago, developed a gasoline-powered popping machine, which also doubled as a peanut roaster, paving the way for popcorn to become a viable snack product. C. Cretors is still thriving today. Still located in Chicago, the multi-billion-dollar concession business is widely credited as being the catalyst for creating modern concessions with its popcorn machine patent. “Today, we are the leading designers and manufacturer of concession, foodservice and food processing equipment,” the company states. As Charles Cretor said, “We invented the popcorn machine, then just kept going.”

In 1906, three years after the Wright Brothers’ first flight at Kitty Hawk, North Carolina, Amedeo Obici, a young Italian immigrant, cofounded Planters Peanuts, and developed a process for commercially roasting shelled peanuts. Little did Obici know, but his small business would one day blossom into one of the world’s grandest nut companies.

Cracker barrels

On November 11, 1901, the Biscuit & Cracker Manufacturers’ Association (B&CMA) was established in Cincinnati, during the era of the nostalgic cracker barrel. The time was aptly characterized by B&CMA’s “Biscuit Boy” logo and trademark. The B&CMA continues today as an international trade organization that represents the entire scope of companies involved in the manufacturing of biscuits and crackers as well as suppliers to the baking industry. Its mission is to bring unparalleled educational training programs and networking opportunities to its members.

A great deal has changed at Lance (now Snyder’s-Lance, Inc.) over the years since Phillip Lance began selling roasted peanuts for a nickel bag in Charlotte, N.C., in 1913. What began as 500 lb. of unwanted peanuts and Lance’s dream has bloomed and evolved into a multi-million-dollar national company that produces 16 varieties of sandwich crackers that are baked fresh with peanut butter and real cheese fillings, or nuts, cookies, popcorn, cakes and many other snack foods. Likewise, Snyder’s of Hanover, Hanover, Pa., got its start in 1909 when Harry V. Warehime, founder of the Hanover Canning Co., and Snyder’s parent company until 1980, began producing Olde Tyme Pretzels.

Years later in the 1920’s, Eda and Edward Snyder II began frying potato chips in a kettle at their home during the summer and peddled the snack door-to-door and to fairs and farmers’ markets. Their son, William V. and his wife Helen, made angel food cakes in their basement for local stores, and in 1924, the families combined their home businesses and Snyder’s Bakery was born.

And who can forget Ritz Crackers? The premium snack cracker brand was introduced by NabisCo in 1934, according to the website, foodtimeline.org. It says that based on records of the U.S. Patent and Trademark Office, the National Biscuit Company (Nabisco) introduced this stylish cracker, but it actually got its start in 1801. That was when retired sea captain John Bent adapted a hardtack recipe.

Bent took a hardened “biscuit” (an English term for cracker) and added leavening agents until it became flat and crisp. Bent’s family baked the biscuits while he traveled the countryside, selling crackers from his wagon. The basic cracker recipe was refined four years later by the Kennedy Biscuit Works, which used spongy dough for a lighter consistency. In 1898, Kennedy Biscuit Works and dozens of other bakeries across America joined forces to form the National Biscuit Company. NabsiCo perfected the recipe in 1934, according to reports. The result was a smooth, flaky cracker hinting of butter.

Unlike other crackers that were pale and square, these creations were golden and rounded, with serrated edges. A company-wide cracker naming contest yielded the name Ritz, presumably after the posh Ritz-Carlton Hotel. Nabisco’s North Philadelphia bakery began producing them and they were introduced at markets in Philadelphia and Baltimore. By 1935 Ritz was distributed nationally. Some of Ritz’s appeal lies in its relatively low price and mass production by Nabisco, the only baking manufacturer with the facilities to distribute nationwide at that time. Nabisco was able to price a box of Ritz crackers at an affordable 19 cents. The circular shaped/buttery-tasting crackers today come in many varieties, such as whole wheat, low-sodium, brown sugar cinnamon variety, garlic butter and many more.

Cheez-It  cheesy snack food crackers manufactured by the Kellogg Co., Battle Creek, Mich.,  through its Sunshine Biscuits Division, are roughly 1-in.-sq. crackers made with wheat flour, vegetable oil, sharp yellow cheese, salt, and spices. First sold by Green & Green Co., Dayton, Ohio, in the 1920s, the crackers and business were later bought by The Sunshine Biscuit Co., (founded in 1902 as the Loose-Wiles Biscuit Co.). A big hit, the sales-leading crackers attracted the Keebler Co., which acquired Sunshine in 1996, and then Kellogg bought Keebler in 2001. Cheez-It crackers are still sold under the Sunshine label. Maker of the famous creme sandwich cookie, Hydrox, Sunshine’s product line in the 1960s was so large, the company would say, “you can enjoy a different Sunshine product every day of the year.” 

Power of the potato

But while crackers had an honorable place in history, potato chips came on just as strong. People loved them. The SFA says that the many original snack entrepreneurs included Daniel Mikesells of Dayton, Ohio, who started Mike-Sells, Scudder, Bill and Sallie Utz of Utz Quality Foods in Hanover, Pa., the Arnold family of Bristol, Tenn., which started Moore’s Potato Chips and Earl Wise, Sr. of Berwick, Pa.

All of the many chip makers or inventors had fascinating stories to tell about starting a potato chip business. Most often, things were developed by accident or came to be because of mistakes that worked. For example, in 1921, Earl Wise, Sr., who ran a small deli in Berwick, Pa, made a discovery that was really plain old luck. Wise had an abundant supply of potatoes, which he feared would rapidly rot. His sister suggested that he turn them into potato chips, which he did in his mother’ kitchen, and then sold at the deli and to other merchants. Wise’s products eventually became a dominant brand on the East Coast.

Only four years after Wise made his first potato chip, he opened his first production plant, a 32×75-ft. concrete building that he continued to expand over the next two decades until 1944. That was when the plant was destroyed in a fire that brought production to a halt. After eight months, a new state-of-the-art production facility was built and expanded for the remainder of the decade.

Utz Quality Foods also got started in 1921, in the kitchen of Bill and Salie Utz’s home in Hanover, Pa. Bill and Salie originally sold chips at small grocery stores and farmer’s markets and the company used a slogan, “Farmer’s Market Fresh,” in its ads for many years. The company still maintains a small-town image every chance it gets. It churned out 50 lb. of potato chips an hour. The company was incorporated in 1947 and two years later, purchased a 5-acre tract of land to build a 67,000-sq.-ft. production facility. Utz also installed two 600-lb./hour potato cookers and was on its way to continued growth and expansion.

“We want people to know that it’s a family-owned, long-term operation from a little town in Pennsylvania that puts out high quality products in limited distribution,” said Tom Dempsey, vice president of sales and marketing back in 1994 for a cover story at the time with Snack Food & Wholesale Bakery. Today, Mike and Jane Rice represent Utz’s third generation of family leadership. Mike’s grandparents are Bill and Salie Utz.

By the middle 1930s, potato chip plants were scattered all over the country. All of them were small or regional businesses. And many soon added other snacks to their lineup, including pretzels, popcorn and peanuts, all of which had emerged commercially since George Crum’s invention.

Preliminary on pretzels

Most details about the origin of another of America’s favorite snack foods—pretzels—is loosely based on myths and folklore rather than documented facts. According to foodtimeline.org, hard-baked bread and flour goods actually originated in ancient times, when biscuits (which means “twice baked”) helped fuel the Romans. Food historians and Catholic scholars generally agree that, from early times, pretzels held a special place in Lent. The word “pretzel” is from German, and is believed to refer to the Latin word pretium for “reward.” Others trace the roots to the Latin word, brachium, meaning arm, according to the Encyclopedia of American Food and Drink.

Julius Sturgis established America’s first commercial pretzel bakery in 1861. He operated a bread bakery in Lititz, Pa., and legend has it that a wanderer who had hitched a ride on a train that ran behind the bakery followed the smell of freshly baked bread, looking for a job and something to eat. Julius couldn’t offer the man a job, but extended his hospitality and invited the man to sit down at the family dinner table. In exchange for the kindness, the man gave Julius a pretzel recipe.

The Julius Sturgis Pretzel Bakery says that specific details are sketchy, and it’s not sure how the story came about, but what is known is that after 11 years as a baker, Sturgis stopped making bread and established the first commercial pretzel bakery in America. Chocolate-covered pretzels proliferated in the 20th century. Early dipping items featured nuts (peanuts, pecans), fruits (pineapple, strawberries, cherries) and biscuits/biscotti. Display ads in the early 1930s for Benzel’s Large Chocolate Coated Pretzels indicate that a dozen cost only 10 cents.

Other pretzel pioneers include Jacob Bachman, Reading, Pa., founder of the Eichler bakery (later Anderson bakeries) in Lancaster, Pa., The Wege Co., Hanover, Pa. and Reading Pretzel Machinery Co., which launched the first automatic pretzel twisting machine in 1933, four years after a continuous cooker was developed for the potato chip market. Before this time, commercial pretzel production was often performed on a cracker-cutting machine.

Make way for a new crunch

In 1930’s, snacks included the four p’s—potato chips, popcorn, pretzels and peanuts. Then a different kind of chips came on the scene: Corn chips. The crunchy, salty, thick chips were commercially introduced by I.J. Filler, a traveling salesman who developed the idea for corn chips while eating at a small Mexican restaurant in San Antonio. Filler received a patent for corn chips in 1933.

A year earlier, 26-year-old Elmer Doolin also walked into a small restaurant in San Antonio, and purchased a nickel sandwich and a five-cent plain package of ribbon-shaped corn chips. He liked the taste and looked up the manufacturer, who turned out to be a homesick man from Mexico. The story goes that Doolin borrowed $100 and bought the man’s recipe, rights to his 19 retail accounts and his production equipment: A hand-held potato ricer. Frito’s were born. By 1935, Doolin was in Dallas and was becoming the king of corn chips, but he recognized the power of potato chips, and also introduced them into his growing enterprise.

About the time Doolin was discovering the corn chip, Herman Lay lost his job with Sunshine Biscuit Co. in Atlanta and took a job as a route salesman’s helper, selling peanut butter sandwiches. When the company’s founder died, Lay, who had become a distributor, bought the company and established a bonafide snack food enterprise, including potato chips. Frito-Lay was on its way. That’s when H.W. Lay & Co. became one of the largest snack food companies in the Southeast, and merged in 1961 with the Frito Co. to become Frito-Lay, Inc. LAY’S brand potato chips are still what Frito-Lay North America presently says is America’s favorite potato chip. Today, Frito-Lay brands account for 59% of the U.S. snack chip industry.

The Dallas-based company presently has more than 45,000 Frito-Lay employees in the United States and Canada, dozens of brands, including Cheetos, Sun Chips, Santitas, Ruffles, Rold Gold and more.

Cracker Jack, a snack consisting of strong molasses-flavored candy-coated popcorn and peanuts, was purchased by Borden in 1964 after a bidding war between Borden and Frito-Lay. Borden then sold the brand to Frito-Lay in 1997. Cracker Jack, known for being packaged with a prize inside its box, was first produced by Frederick “Fritz” William Rueckheim and his brother Louis, for sale at the first Chicago World’s Fair in 1893. At the time, the mixture was simply called, “Candied Popcorn and Peanuts.”

Rueckheim devised a way to keep the popcorn kernels separate in 1896. As each batch was mixed in a cement-mixer-like drum, a small quantity of oil was added—the amount is a trade secret. In 1908, the song “Take Me Out to the Ball Game,”  written by lyricist Jack Norworth and set to music by Albert Von Tilzer, gave Cracker Jack free publicity when it was released with the line, “buy me some peanuts and Cracker Jack!”

Cultivating the chip business

According to the SFA, the young snack industry was growing rapidly, but the business was fragmented with no overall focus. Harvey F. Noss, a Cleveland advertising salesman whose family owned a local potato chip, ice cream cone and pretzel manufacturing company called Num Num Foods, changed that.

With Crum and Tappenden being two of the three principal players responsible for the creation of the snack food industry, the third was Noss, says the SFA. Noss persuaded other Ohio-area chip manufacturers to join forces in a loose-knot organization called the Ohio Chip Association. The group developed a radio advertising campaign and other promotions to sell potato chips. But Noss thought about what a national organization of chip manufacturers could do for the future of the rapidly growing industry as far as public relations, marketing and other services were concerned.

Noss and his colleagues expanded their regional organization into the National Potato Chip Institute (NPCI), which would later become the SFA. They held the group’s first meeting in Cleveland, with Noss as the first president. Noss eventually became the association’s paid leader, and the NPCI developed programs to educate consumers and retailers about potato chips, developed quality standards for manufacturers, adopted a package quality assurance seal for members and a series of literature that discussed the nutritional value of potato chips. 

That same year, the SNAXPO show got its start, and has been putting the power of exhibitors to work for all attendees ever since. The show has become the world’s largest, most comprehensive event devoted exclusively to the international snack food industry, bringing together owners, executives and buyers from every segment of the market. The SFA notes that SNAXPO 2012 exhibition and conference in Phoenix welcomed some 1,500 domestic and international snack food management professionals.

The Heinz 57 of the Southwest

With World War II looming, and rations of various products like sugar on the horizon, there came numerous government restrictions, including controls on private and contract haulers and limits on production of shortening and oil. The fear that the potato chip industry might have to cease production for the duration of the war was also a reality, as the product wasn’t considered “essential.”

The SFA points out that a special committee led by Noss put together a list of reasons why potato chips were essential, and went to Washington D.C. to sell the idea to the bureaucrats. By the time he headed home, the potato chip industry was not only deemed “essential,” the NPCI’s members were allowed to obtain enough raw materials, gasoline and tires to continue producing. When the war ended in August, 1945, the industry geared up for a big push, but there were still lingering technical problems.

Hand cooking was giving way to continuous fryers, though manufacturers were still packaging chips and other snack products by hand. Daniel Woodman, working as a consultant to Herman Lay, developed the first pre-formed bagmaking machine and soon, the snack industry was well on the way to automating its packaging functions.

By 1947, David Pace, founder of Pace Foods, San Antonio, Texas, began bottling syrups and sauces in the back of a liquor store. “He had a laundry list of products,” recalls Rod Sands, president of Pace Foods in 1994, when SF&WB covered the company in a feature story. “He had queso, jams jellies and different kinds of hot sauce. He wanted to be the Heinz 57 of the Southwest.”

In the early 1970s, Pace analyzed his business, which was still in a startup mode, and saw that his Picante sauce provided about 80% of sales, and he actually discontinued all other products. Sands found this a bold move. “I find it remarkable,” he was quoted in our pages as saying. “That’s hard to do when you’re in a startup mode.” But going forward as a specialist in Mexican sauces, it proved to be the right idea for David Pace. The company today uses more than 25 million lb of fresh jalapenos each year and the same recipe David Pace created more than 60 years ago.

Like Pace, James Stauffer Herr wanted to pursue his own idea of the American dream. He left his father’s farm and with $1,750, purchased a small potato chip company in Lancaster, Pa. In 1947, the business moved into a vacated tobacco shed on the Herr family farm. As he learned more about the business, Jim Herr developed new and better cooking processes and a delicious snack food became even better. As demand for Herr’s potato chips grew, so did the company. A few years later, Jim Herr located a 3,600-sq.-ft. bakery facility available for rent in the small town of West Willow, Pa. The bakery, along with an adjacent house, became workplace and home for Jim and his wife Mim. The company would eventually become one of the nation’s leading regional chip players.

Packaging plays key role

On the packaging side of things, Cellu-Craft, Inc., founded in 1937, in Brooklyn, N.Y.,  as a small printer of packaging materials, and has logged many milestones over the years, according to the SFA’s book, 50 Years: A Foundation for the Future. By 1974, the company expanded twice, tripled its volume and continued to expand through acquisitions and organic growth. The firm purchased the assets of Vision-Wrap Co. in 1978, which increased production capacity substantially.

Aseeco Corp. developed sanitary bulk material handling machinery and conveying systems some years later, including a sanitary bucket elevator conveyor call the Aseeco-Lift, which quickly became a standard of the food industry. Curwood Co. also grew from a three-person packaging film producer with just one extruder/laminator to a comprehensive flexible barrier packaging resource, providing various snack food packaging materials. The company became a wholly-owned subsidiary of the Bemis Co. in 1965 and remains so today, but is now a world leader in high-barrier packaging materials and systems for food, beverage, household, industrial and personal care industries.

TV and snacks go hand in hand

What really exploded the growth of potato chips and other snacks and put them on the national map was television. In 1950, Americans owned 1.5 million TV sets. The figure continued to grow until most households had multiple sets in the mid to late 1960s. The impact on the industry was amazing. Folks sat around the tube, watching the fights, football and Milton Berle, munching snacks.

Two new snack products were introduced in the early 1950s: Cheese flavored, extruded corn puffs; and pork rinds. There were now six major salted snack products available to retail customers.

Bellville Marking Corp. started business in 1959 as an ink and printing products supplier. The company invented reciprocating ink coders with a patented ink cartridge for vertical form-and-fill packaging machines that could print dates and prices on film for snack packages.

Cornnuts was a family business selling a toasted corn nugget-like product to local bars and taverns around Oakland Calif., in the late 1940s. The crunchy, nutty-tasting snack, which is fiber-filled kerns of corn, had really caught on. Through World War II, shipments of imported Cuzco corn, from which the company used to make its product were cut off, and it discovered a small kernel corn to use instead at that time. Supplies of the larger imported corn were re-established in the mid-1950s, but by that time, company geneticists created an oversized, domestic corn hybrid, that was four times larger than ordinary domestic corn kernels. Since 1969, the Cornnuts’ crop has been grown in California and Ohio, and the product is sold in supermarkets, vending machines and bars across the United States and many other countries.

The 1950s was a golden era for in the snack food industry. A population explosion was taking place in America—there were 18 million more people than in 1940, says SFA. And they had an undeniable appetite for snacks. Though potato chips were still the best seller, pretzels were expanding, popcorn sales in theaters and small outlets were at an all-time high, and there was a bigger market for packaged popped corn and caramel corn.

Meanwhile, as the Frito Co. acquired several large regional players, Herman Lay was busy building plants throughout the Southeast and buying up pretzel and potato chip plants as far West as Los Angeles. In 1961, the industry was stunned when The Frito Co. and H.W. Lay Company merged to create what was a $135-million corporation that forever changed the face of snack foods. However, Elmer Doolin never lived to see the accomplishment, having died in 1959, at the age of 56.

Swinging Sixties changes

SFA notes that by the middle of the 1960s, snack sales had reached nearly $750 million in America. In 1961, at a historic meeting in Frankfurt, Germany, the European Regional was formed as a part of what now had become the Potato Chip Institute International or PCII. By 1964, the European regional had 88 members. Incredibly, Noss was also invited to Russia, behind the Iron Curtain, to talk about potato chips. In 1978, the Regional would become an independent group called the European Chip and Snack Association, which is now called the European Snack Association (ESA).

In 1964, Herr’s made a major packaging move that helped revolutionize sales. For years, its chips were sold in wax paper bags for 5, 10 and 15 cents each, depending on the size. A twin-pack (two bags inside a larger cellophane package) was also available at about 49 cents.

Another new product would quickly push sales past the billion-dollar mark. One day in 1964, Arch West., marketing vice president for Frito-Lay, toured some retail outlets in Southern California. At one store, he noticed a number of greasy kraft paper bags on a Frito-Lay rack. Inside the bags he found little pieces of toasted tortillas. His first reaction was that if people were buying those, maybe Frito-Lay should be making it.

West decided to go to Alex Moralis of Alex Foods, a tortilla maker whose company made tortillas for Frito-Lay’s Disneyland restaurant. West wanted to determine whether tortilla chips could be produced on automatic equipment. Moralis said yes, and several months later Frito-Lay gave birth to the Doritos brand of tortilla chips in the west and southwest, to tremendous response. Doritos were rolled out nationally in 1966, and virtually every snack manufacturer jumped on the bandwagon. Very quickly, tortilla chips became America’s second favorite snack.

A year earlier, PepsiCo International merged with the growing Frito-Lay Co. to create a beverage-snack giant, and the snack industry was blooming all over Europe and many other countries. Harvey Noss visited European snack companies frequently, the SFA reports, looking for new members to the association.

The ‘pop’ of popcorn

Orville Redenbacher, who began growing popping corn at 12 years old, saved enough money to go to college with his first popcorn business. By the 1940s, he was raising popcorn for the supermarket trade, and in 1965, he and business partner Charles Bowman, perfected a hybrid popcorn that was light and fluffy, had minimal hulls and left few unpopped kernels. The tasty product also achieved a 44:1 volume ratio of popped to unpopped kernels. Four years later, Redenbacher launched his first popcorn brand, Red Bow, and was on his way to popcorn fame.

He put the “lighter” and “fluffier” challenge to the test in TV commercials in 1976 and the product and Redenbacher became a sales success. His famous slogan, “You’ll like it better or my name isn’t Orville Redenbacher,” was a winner, and the product quickly made him a popcorn king and legend. ConAgra Foods bought the Orville Redenbacher brand in 1983 and later launched various line extensions, such as SmartPop 94% fat-free, Cheddar Cheese and Spicy Nacho, which popped up hot and fresh in the microwave. Redenbacher passed away in 1995, but his innovative popcorn legacy lives on.   

Gas lines, ecology, snack explosion

By the 1970s, America faced a serious oil shortage. Gasoline prices soared and packaging of potato chips was evolving from glassine and paper bags to foil bags. Paperboard boxes and canisters were becoming increasingly expensive. Foil prevented light penetration and did a better job of keeping chips fresh over a longer period. But the switch was rather difficult and expensive for some companies, and the additional cost for foil was significant. Companies like Herr’s were convinced that consumers would prefer a product that stayed fresher longer.

In addition, Jack and Rosemary Shearers bought a snack food distributorship in 1974. A fourth generation of Shearers, sons Bob and Tom joined the family food business and expanded their route sales fleet. By 1979, the Shearers wanted to offer  customers a more complete line of snacks. Unable to find products that met their high standards, the family began its own snack food manufacturing operation, and made their first “hand-cooked” kettle potato chips in a small rented facility on Harrisburg Avenue in Canton, Ohio. The Shearers hand-cooked the chips, packaged them in 1-lb. plastic bags and sold them under the Kettle-Cook’d  label. Customers were excited by the new product and quickly added it to their shelves. In fact, kettle chips have became so popular that new product introductions occur to this day.

Yet early in the 1970s, the SFA says that the snack food industry faced two threats—the first real challenges it experienced since World War II.  Potato chips, now a billion-dollar category, were being characterized by the nutrition community as “junk food.” PCII mounted a spirited campaign, hiring nutritional consultants to fight back. One key phrase in the campaign pointed out that “there were no junk foods, only junk diets.” Potato chips and other salted snacks had a place in a responsible diet. But the decade was a time when “health food” became a trend, and “growing or baking your own” was catching on. By the end of the decade, with the association’s influence, a large percentage of snack food products contained a nutritional profile on packages.

Government involvement

With mounting government legislation and regulation affecting the food industry, the SFA says that it moved its headquarters from the Cleveland area in the late 1970s and set up shop in suburban Washington D.C. to be closer to the action.

The second threat was also due to the industry’s growth. As the snack industry ballooned, so did retail food marketing. Traditional small food markets were morphing into larger and larger supermarkets that eventually grew to be 60,000 sq. ft. and more. Snack food sections of stores became cavernous, often stretching the width or length of a store. Convenience stores were beginning to scatter across cities and nearly every neighborhood. Then there was the advent of mass market retailers like Walmart and Kmart (and later, Target), which began to cannibalize business from many of the established product categories, such as toys, small appliances, clothing and others, including snack foods.

But a controversial breakthrough came from Proctor and Gamble and General Mills, both of which introduced chip-like products made from dehydrated potato flakes. P&G called its product Pringles,and General Mills called its Chippos.The SFA says the problem was that they also described their products potato chips, and potato chip manufacturers “took great umbrage.”

Many chip makers apparently feared that the uniform new chips would carve into the regular chip market. In a lawsuit filed on behalf of the industry, a federal court ruled that the new products could be called potato chips as long as a disclaimer was prominently displayed on the package that they were made from dehydrated potato flakes. Proctor and Gamble eventually built Pringles into a major brand and became an important member of the association. 

Instant information

The bar code was adopted for packaging in supermarkets and drugstore chains, giving retailers and snack food manufacturers instant information on product movement. More computerized  management systems were being developed to help the industry handle more and more information and facilitate their operations. The SFA says it helped to spread the word on how these new developments could help make  operations more efficient and profitable.

Waste disposal and inflation were creating mounting problems in the early 1980s, and states were enforcing environmental laws and stricter waste disposal legislation. Recycling was a term heard more in the later part of the decade. Interest rates were at 13- and 15% and oil prices were escalating. Yet the SFA celebrated its 50th anniversary in 1987, and both the multi-billion-dollar industry and the association were strong. Manufacturers, packagers and consumers were still hopeful for the future. But in the course of a decade, the world would be rocked by revolutionary developments that changed the landscape of snack food marketing and the retail food business.

The snack food industry also consisted of one national full-line company, Frito-Lay, and many strong regional companies across the country early in the decade. The SFA says that two of them decided to challenge Frito-Lay as the dominant national snack food company. One was Borden’s, a multi-faceted food and dairy company, which purchased Wise Foods in 1964 from the Earl Wise family.

The other was Anheuser-Busch of St. Louis, the “King of Beers.” Borden bought numerous regional snack food companies in the 1980s, boosting its snack food volume to more than $1.5 billion. Anheuser-Busch, on the other hand, with its beer distribution business as its flagship, began building a snack business, literally from the ground up, and eventually reached national status with its Eagle Brand Snacks. The SFA says that the three-way battle between Anheuser-Busch, Borden and Frito-Lay and regional chippers in the middle played right into the hands of retailers, many of which benefitted by selling snack food aisle shelf space by the facing to the highest bidder.

But the war didn’t last. By 1993, Borden couldn’t find a buyer for a national “super” brand it was trying to create, and it began disassembling its national network. Thus, most of the companies it acquired earlier eventually disappeared from the landscape. Anheuser-Busch left the snack whirlwind in 1996, after spending millions overall, and ended up selling its four plants to Frito-Lay. In the meantime, the Food and Drug Administration issued a requirement for nutritional labeling to be applied to most foods regulated by the agency, including snacks. The SFA reports that it helped educate its members about the ins and outs of the new regulations and that’s why snack companies had few troubles meeting the May, 1993 deadline. The act also set a January 1, 2006, deadline for trans fatty acid labeling.

Thinking outside the ‘big box’

Walmart was beginning to emerge from Bentonville, Ark., as Sam Walton continued to nurture his stores until there were nearly 1,200 of them by its 25th anniversary in 1987, with sales of $15.9 billion.

By the early 1990’s, Walmart was ready to move across the country as America’s largest food retailer, and later focused on the world.

By 1994, the industry was undergoing tremendous changes. The three Rs—reduce, reuse, recycle—were created for packaging. More new flexible snack food packaging structures were developed. The industry was going more global, as evidenced by the tremendous increase in Latin American exhibitors at the SNAXPO show that year. It was also becoming less family-oriented and more corporately controlled. This is according to SF&WB editor at the time, Wendy Kimbrell.

With the influx of Hispanics coming to the United States, it wasn’t surprising that Frito-Lay came up with a baked, low-fat version of Tostitos tortilla chips in 1994. Original Tostitos were introduced in 1979 and were distributed nationally starting in 1981. Made from all-white corn, Tostitos were meant for dipping in salsa and other dips. Sales grew quickly, and in 1985, the brand was Frito-Lay’s fifth-largest, according to Wikipedia, generating annual sales of $200 million at that time. Tostitos became a long-term success and is even more popular today.

Proctor & Gamble created a fat-free substitute called Olestra,which was approved as a food additive by the FDA. In 1998, Frito-Lay introduced no-fat WOWchips.

In 2004, the New York Yankees baseball team replaced Cracker Jack with the milder, sweet butter toffee flavored Crunch ‘n Munch at home games. After a public outcry, the club immediately switched back to Cracker Jack, according to Wikipedia.

Walmart’s impact on the country and on retailers was relentless. It used to be that the marketing people worked with consumers to find out what they wanted, designed products, advertised them and people bought them. Walmart changed all that. Walmart also changed who made the decisions in the supply chain to American consumers. Later, in 2009, Frito-Lay’s development of SunChips brand multigrain snacks coincided with Walmart’s sustainability mandates. The product was rolled out in compostable packaging bit by bit between 2009 an 2010, with a fully compostable bag out on Earth Day, 2010. Frito-Lay dropped the biodegradable bag within 18 months after it was the target of viral social network attention because of how noisy it was.

Snacks still to come

But with all of the trials and tribulations in the business, it’s very safe to say that snacks are not going away any time soon. In fact, it’s quite the opposite. Today, sales of iconic brands such as Procter & Gamble’s Pringles chips, to Kellogg Co., are more and more common. The Pringles business was sold for a whopping  $2.695 billion. Kellogg established a strong U.S.-based snacks business when it purchased the Keebler line more than a decade ago. Pringles will fit in well with its core strengths in brand building and innovation. Kellogg also now owns high-quality snacks such as Cheez-It crackers.

What’s more, snacking a few times a day or more is a growing phenomenon. Restaurants and others are capitalizing on expanding snacking occasions by offering quick, portable, smaller-portioned, low-priced food in a myriad of ways to keep gaining market share of snack purchases.

Restaurants now claim 22% of consumers’ snacking occasions, up from 17% in 2010, according to food industry consultant, Technomic, Chicago. “Recent consumer research indicates that snacking is becoming a larger part of consumers’ daily lives,” says Technomic executive vice president Darren Tristano.

Technomic’s recently released “Snacking Occasion Consumer Trend” report finds that more than a third (37%) of consumers have broadened their definition of snacks to include more types of foods, beverages and restaurant fare. Impulse purchases of snacks are up from two years ago. The study also reports that 62% of purchasers said most of the snacks they bought for away-from-home consumption were impulse purchases. More than 33% of consumers expect to eat more healthful snacks in the coming year, indicating greater importance for operators to offer and promote better-for-you snacks.

In March, PepsiCo said that its potato chips have gone global. The company’s Banner Sunpotato chip brands generated more than a whopping $10 billion in annual global retail sales anchored by Lay’s, the world’s largest food brand (Banner Sunalso includes brands such as Walkers, Smith’sand Sabritas). The Banner Sunlogo, which appears on its packaging, has grown into a symbol for quality potato chips around the world, the Purchase, N.Y. company says. Lay’sand Walkersare among PepsiCo’s portfolio of $22-billion food and beverage brands, a number that has doubled since 2000, further illustrating the strength of the company’s worldwide food and beverage business, and proof positive that snacks are a powerful market segment now and for many, many years to come.

Despite the ongoing economic difficulties the country has faced since 2008, new product activity in the global snack food industry appear to surge on, unabated. Figures reported by Innova Market Insights in March showed a strong double-digit increase in 2011. Savory and salt snacks accounted for just below two-thirds of the total, with snack nuts and seeds taking up the remainder. The amount of snack manufacturers in the national footprint of producers is shrinking, but the volume of snacks produced and consumed continues to set records.

Snyder’s of Hanover has quickly climbed the ranks to be the nation’s top pretzel producer. Wise eventually wound up in the hands of Palladium Capital Partners of New York in 2000.

The SFA says that a lot of credit for the tremendous growth and success of the industry is due to the entrepreneurial spirit of the snack manufacturers. But a great deal of credit must also be given to vendors in the industry, who have worked hard and diligently to bring technological breakthroughs to the table that have helped improve the quality, productivity, accuracy and shelf life of many snack foods. We hope they all celebrate our 100 years with us.