Nuts: versatility, health keep sales up

May 12, 2011

Nuts, long known for health, give the salty snack aisle a role to aim for as possible meal replacements.

The salty snack aisle is on a better-for-you bent. More products have the ingredients (grains, olive oil), processes (baking) and formulations (lower sodium and fats, gluten-free) to be associated with better health rather than indulgence.

The strategy, it seems to us at F3, is to increase eating occasions and have people regard snacks as potential meal replacements – if not by themselves, then paired up with fruit, yogurt, salsa or hummus, for example. Eating like this suits today’s on-the-run lifestyle as well as weight-management regimens that call for small portions regularly throughout the day.

If perceptions shift about salty snacks, it will still take a lot to compare with nuts, the aisle’s original health food. Depending on the variety, nuts can be good sources of omega-3 fatty acids, unsaturated fats, fiber and vitamin E – and they pair well with salads, cheese and many cooked dishes. Reflecting this, many supermarkets merchandise nuts apart from other salty snacks to instead be near rice cakes, baking ingredients and other pair possibilities.

Consumers like the versatility and health aspects of nuts, as shown by the category’s 81.5% rate of U.S. household penetration, and the average annual purchase of $34.31 (prepackaged, UPC-coded products only), reports Nielsen Homescan Consumer Facts for the 52 weeks ended December 25, 2010.

Nuts do cost more per pound than other salty snacks. Yet this hasn’t halted their growth in the recession and post-recession period. Dollar sales of nuts broke the $3 billion annual threshold during 2010 on a 5.3% gain, and advanced 3.0% to $3.14 billion in U.S. food, drug and mass merchandiser stores (including Walmart) during the 52 weeks ended March 19, 2011, according to Nielsen data (also for prepackaged, UPC-coded products only).

The nuts category achieved this on a 6.2% equivalized unit volume gain (16-ounce basis) a year ago, and a 0.1% bump up in the latest year. 

Although the rate of overall sales growth did slow, a key indicator points higher.  Measures of nut sales in four-week increments show that the Thanksgiving and Christmas periods produce the highest peak performance. Both of these holiday times in the latter part of 2010 showed gains over the comparable 2009 periods. Thanksgiving dollar sales of nuts rose by 2.5% and Christmas dollar sales of nuts were up 3.7%, Nielsen data show.

Examining nuts by package form, bags comprise the largest segment at 44.2% of sales, cans account for 40.1%, jars 10.7%, and unshelled 4.9% shares.  Bags took over the lead position in 2009, and since then bag advances have been robust while can declines have been steeper.  The F3 take: bags show the product and are more portable for eating on the go.

Dollar sales of bagged nuts rose 11.1% a year ago and 8.5% in the most recent 52 weeks to $1.39 billion. Meanwhile, dollar sales of canned nuts edged downward by 0.1% a year ago and 3.1% in the latest 52 weeks to $1.26 billion, says Nielsen.