A fresh approach to nuts

June 16, 2014

As nuts extend rise past $4B sales, more cohesive merchandising could enhance performance.

Originally published in Fact, Figures & the Future

Since consumers aim to eat healthier these days, F3 poses this question:  Would nuts – those compact storehouses of protein and monounsaturated fats – sell more and harvest a stronger wellness image if displayed in its own department, perhaps near better-for-you foods rather than its frequent treats-type neighbors?

To be thought of more seriously as a power snack, or as a meal accompaniment on salad or center-plate, nuts may sway consumers and move more volume if tested with different foods nearby.  Think walnuts on greens, slivered almonds on seafood, or different pairings with cheese and wine to augment a permanent home – and help balance nuts’ image with what shoppers often see amid baked goods and other dessert/treat items. 

At Trader Joe’s, for instance, see-through bags of nuts are shown in a permanent home just steps from the front-end.  They are alongside dried fruits, up the aisle from cereals and frozen seafood, and directly face power bars, vitamins and supplements. That’s health territory.  Nevertheless, nuts at Trader Joe’s are about taste as well as nutrition – some varieties are flavored (wasabi, for instance) and others are combined (other trail mix components, dried cranberries, raisins, for instance).  The store also displays nuts frequently on high-impulse stands at the checkout lines. 

F3 urges supermarkets weighing a new way to merchandise nuts to also consider the consistency of their pricing.  Our own store observations show wide variations in pricing per pound, depending on package form (laydown bag, multipack, canister, can), product form (whole, halved, slivered, bits), and in-store location.  As consumer spending picks up, we believe nuts could appeal more to health-driven shoppers and become a retail focal point – once stores and brands find the sweet spot in positioning and pricing.  

The timing is right for a fresh approach to nuts, which continue their sales climb past the $4 billion threshold.  According to IRi multi-outlet data for the 52 weeks ended April 20, 2014, dollar sales in supermarkets, drug stores, mass-market retailers, gasoline/convenience stores, military commissaries, and select club and dollar chains grew 4.19% to $4.23 billion.  This occurred on a 2.63% unit sales rise.  The average price per unit was $3.31, up a nickel from the same period a year earlier.

Private label holds the leading share (28.03%), followed by Kraft Foods (26.34%), Paramount Farms (13.76%), Blue Diamond Growers (9.51%), and Frito-Lay (4.71%), the data show.  Of these top 5, private-label dollar sales grew the most in the 52 weeks, by 8.85% to $1.19 billion.  By comparison, Kraft Foods grew 1.70% to $1.1 billion, Paramount Farms slid 1.97% to $582.0 million, Blue Diamond Growers advanced 16.67% to $402.2 million, and Frito-Lay rose 10.02% to $199.1 million, the IRi figures show.

Meanwhile, snack product manufacturers are trying to capitalize on the health draw of nuts.  More than 37% of global snack food product launches in 2013 include nuts and seeds; the U.S. figure is 32%, according to Innova Market Insights data reported by FoodBev.com and subsequently by the National Association of Convenience Stores.   Consumers show rising interest in value-added products such as natural, flavored and premium packaged snack nuts, said the account, quoting Lu Ann Williams, Innova’s director of innovation.