AP42 Chapter 9 Reference

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AP42 Chapter 9 Reference Background Report Reference AP-42 Section Number: 9.13.3 Background Chapter: 2 Reference Number: 4 Title: 1992 Snack Food Association State-of- the-Industry Report Snack Food Association, Alexandria, VA 1993 AP42 Section - Ravorii Laboratories, Inc., and Printpack lnc. When it comes to snacks andsauces, Flauorite seasonings taste as fresh and natural as can be. Laboratories, Inc., gives yuu a world of flauors At Flauorite, you haue the resources of nearly and earthly delights. 200 skilled employees, including teams of food We create custom flavorings,seasonings, technologists, microbiologists, and food scien- sauces, and micro-blends, designedjut for your tists, working to serue you and your customers specific needs. Our creative imagination, com- with new flauorfil opportunities. bined with the most advanced technology and For meat, poultry, seafood,snacks, sauces and equipment, will work to deuelop unique custom other processed foods.. from the familiar to the flauorings for your products. And, because we exotic.. .Flauorite's expertise can help put a world produce many ofour own ingredients, our of flauorfulimagination into your products. I;[cl(Flavorite For more inlormation call Flauorite Laboratories at We Bring Imagination To The Table ($00) 647-9314 R P Ins. TfiBLE OF CONTENTS INTRODUCTION Introduction ............................. SW-3 The 1992 SFA State-of-the-lndushy segment. This year's survey was con- Overview .................................. SW4 Report represents a substantial leap ducted by Association Research, Inc., forward in SFA's ability to accurately Rockville, Maryland. Potato Chips ........................... SW-13 measure sales in the snack industry. Becausethisnewdataismuch more Tortilla Chips ......................... SW-17 Through the years, this report has comprehensive and detailed than Corn Chips ............................. SW-20 always been the industry's best ever before,we have made some ad- source of information about snack justments in data reported for previ- Popcorn .................................. SW-22 sales, but this year additional infor- ous years so that 1991 data in this Extruded Snacks .................... SW-28 mation has raised both the quality report relates to figures from previ- Pretzels .................................. SW-30 and quantity of data to a new level. ous years. For example, figures for Nielsen MarketingResearch, based total snack industry dollar sales fig- Snack Nuts .............................. SW-32 in Northbrook, Illinois, has provided uresand poundvolume for 1987-1990 Meat Snacks ........................... SW-35 supermarket scanner dataon sales of have been revised slightly, but per- Pork Rinds ............................. sw-37 a wider variety of snack and snack- cent change figures for those years Mix/Variety Packs SW-39 related products. In addition, data remain the same. Similar revisions Party ........ from a consumer household panel have beenmadewithinspecificsnack Other Snacks .......................... SW41 has provided more detailed informa- segments, such as potato chips. Regional Trends ..................... SW42 tion about distribution outlets for Whenever possible, pound volume Snack-Related Products .........SW44 each type of snack, plus per-pound figures for previous years have been price figures for each snack for sev- retained,whilenew informationabout Survey Results ........................ SW45 eral distribution outlets. price has resulted in adjustments to Future Trends ......................... SW-50 This information, combined with dollar sales figures. results of the annual SFA member Alldollar sales figures in this report survey of US.-based snack manufac- represent retail sales unless other- This report was written by AI turers and personal interviews with wise noted. Rickard, vice president forcommuni- key executives in all segments of the Questions and comments about cations at the Snack Food Associa- industry, has allowed us to add new this report should bedirected toSFA tion, Jane Wuerthner, managing edi- charts on distribution and price to Vice President for Communications tor of Snack World, and Bill Levy, the sections on each major snack AI Rickard at (703) 8364500. contributing editor to Snack World. Photography by Lee Salsbery. De- signand production by CaroleThieme Design Studio, Alexandria, Virginia. The 1992 SFA State4the-lndushy Report is published by the Snack Food Association, 1711 King Street, Alexandria,VA22314. This summary report is available to SFA members for $10; to nonmembers for $40. Cop ies of the complete report, including supermarket scanner data and re sultsofthe 1992SFAmembersurvey, are available for $25 to SFA members and $150 to nonmembers. To order either report, send a check for the price Of the report, plus $2'50 lor THE SPONSORS: Dick Botsch (left), vice president of business development lor shipping and to sFA at the Printpack Inc.; Phil Rogers (center),vice president of sales and marketing for Flavorite above address. Laboratories, Inc.; and Bill Wagamon, industry director, snacks, for Hercules Incorpo- rated, represent the three SFA Associate Member company sponsors of this report. An @ 1992 Snack Food Association interview with the chief executives of these companies is featured on page SW-10. I sw-3 food industry executive questiolied by the magazine. SNflCKS ON mE MOVE One thing is clear: Club stores and mass merchandisers arc growing. In fact, according to the Membenhip 1991 Dollar Sales: $13.43 Billion (+5.6%) Warehouse Clubs lndushy Overview. 1992, areport on theclubstore indus- 1991 Pound Volume: 4.92 Billion (+6.5%) try,salesintheseoutletswill hit $34.7 billionin 1992,upfrom$13.9 billionin A year rarely passes without a phoned sales from traditional super- 1988. According to James M. Degen & plethoraof activityinthesavorysnack markets and grocery stores by offer- Company. Inc.. a Santa Barbara. Cali- industry. 1991 was no exception. ing lower prices. fornia,marketingconsultingfirm that While other product categories suf- For example, the average price per has been studying the membership fered from the recession, the snack pound of potato chips in supermar- club warehouse concept since 1980, category was on the move, posting a kets was $2.61, compared to $2.14 in clubstoresareforecasted togrowto 6.5 percent gain in poundvolume and club stores. For tortilla chips, super- sales of $78 billion in 900 club units offering consumers a variety of new markets averaged $2.23 per pound, by 1996. products. compared with $1.75. in clubs. The In the snack industry, warehouse 1991 was probably the most com- differencefor pretzels was almost 70 clubsaccountfor4.1 percentof pound petitive year in the history of the cents, while for snack nuts it was 76 volumeand 3.0 percent ofdollar sales, snack industry, reflected in low prices cents per pound. Needless tosay, the while mass merchandisers sell 8.2 and heavy promotions assnackmanu- lure for consumers is price. percent of pound volumeand account facturers continued tojockeyforpre According toSupermarket Business for 7.1 percent of sales dollars. (The cious market share. magazine, club stores are undercut- effect of these stores on the snack Perhaps J. Wesley Felton, presi- ting supermarkets by at least 25 per- food industry is also explored in the dent of Grannv Goose Foods in Oak- cent on avarietvof items. Suoermar- February 1992 issue of Snack World land, California, sums it up best: in the article, “Reaching ‘Critical “Whatever -.YOU promote moves.” I I Mass’ in the Snack Food Indus- It seems price slashing took its try.’? toll on the snack food industry, I It‘s no wonder. therefore, that dropping overall profits from 10.5 thegrowing presenceof mass mer- percent hefore taxes to 8 percent, chandise and warehouse club according to companies respond- stores is gaining attention in the ingtoSFA’s annual survey of snack food industry. In PepsiCo, Inc.’s manufacturers. Profits for full-line annual report, mass merchandis- snack companies (companies sell- ers and warehouse club stores ing five of six major snack prod- were cited as the fastest-growing ucts) averaged 6.8 percent. channels for Frito-Lay products, FdGi-i ii~~r~iue~Liie currrpeii- which nave strong positions in ii tion in the West as relentless. “If mart and Wal-Mart. “We won’t be anything, it’s gotten worse,” he satisfied until there’s a Frito-Lay remarks. “Two years ago, I snack within easy reach of eveiy thought it might slackoff. Ayear man,woman, and child in the coun- ago, I had the same hope. Now I try,” reads PepsiCo’s annual re don’t see any end in sight.” port in outlining Frito-Lay’s distri- Extensive pricecutting in thein- bution goals. dustry was reflected in the rela- The Columbus, Ohio-based tionship between retaildollarsales Borden Snacks and international growth and pound volume in- 0Dollar Sales (Billions) Consumer Products Division also creases. Dollar sales rose 5.6 per- announced it has plans to expand cent, but was outpaced by pound 0Pound Volume (Billions) its position through alternative volumegrowthof6.5 percent. Still, outlets toincludeclubstores,con- competition. Supermarket executives are disgruntled that they don’t have Percentages indicate change from 1990 access to the same deals and special m snad< akz packaging afforded discount retail- Retail Dollar Sales (Millions) 0 Pound Volume (Millions) ers. Some supermarket chains are re taliating by establishing “maxi pack -$4,342 ti.1% sections where largesized bags sold in warehouse club stores are dis- played
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