Milling & Baking News - July 22, 2014 - 30

Cracker Update 

Crackers onbyfiavor innovation, health-focused offerings
re
Growth spurred forward
fl

onsumers can't get enough
crackers. In the 52 weeks ended
June 15, dollar sales in the crackers category totaled $6,825,230,652,
up nearly 3% from the same period a
year ago, according to Information Resources, Inc., a Chicago-based market
research firm. The gain came on top of
4.5% year-over-year growth in the 52
weeks ended June 16, 2013.
The upswing in the market actually
dates back more than a couple years.
According to Mintel Group Ltd., U.S.
cracker sales grew 19% from 2008-13,
and are expected to increase by 19%
through 2018.
"Similar to cookies, the strong performance of crackers can be attributed to an
expansion of health-focused offerings
that allow for lower guilt snacking,"
Mintel said. "Flavor innovation can also
be seen in the category, which increases
opportunity for eating products on their
own as a convenient, no-fuss snack."
Mintel said more than three quarters of U.S. households eat crackers,
with the standard cracker segment
significantly more popular than premium or health-focused varieties.
"High income earning households
are significantly more likely than lower



Outlook for crackers
Dollar sales in the category are expected to grow
19% through 2018

(in millions)

$10,000
$8,000
$6,000
$4,000
$2,000
0

2013* 2014 # 2015 # 2016 # 2017 # 2018 #

Mintel Group Ltd.

* estimate

# forecast

earners to purchase crackers," Mintel
said. "This is especially apparent in the
premium and health-focused segments.
While price isn't keeping low-income
earners completely out of the market,
it appears to limit participation and impact product choice. Expanding affordable cracker options, including private
label varieties and smaller packs will be
important to engaging the greatest percentage of consumers."
In the 52 weeks ended June 15, I.R.I.
said dollar sales of private label crackers
30 / July 22, 2014 Milling & Baking News

totaled $237,594,825, up 3.4% from the
same period a year ago.
Companies call on innovation
Innovation helped drive a nearly 5%
dollar sales gain and 7% unit sales increase at Kellogg Co. in the 52 weeks
ended June 15, according to I.R.I.
"The cracker business posted consumption growth of 2.7% in Q1, and we

Stacks, Nabisco Ritz Toasted Chips and
Nabisco Honey Maid were among the
company's stronger performers during
the period.
Mondelēz, through the Nabisco
brand, recently launched Ritz Bacon
flavored crackers, which combine the
classic taste of Ritz with black pepper
seasoning and bacon flavor. The launch
comes just a few months after Mondelēz

 The cracker category
Dollar
sales
Crackers
All other crackers
Crackers with fillings
Saltine crackers
Graham crackers
Breadsticks

Per cent change
from year ago

$6,825,230,652
$4,933,248,647
$880,208,346
$538,880,272
$428,728,462
$44,164,925

2.6
3.2
-0.6
0.2
6.5
-4.2

Unit
sales
2,632,836,157
1,809,772,564
401,451,763
254,614,526
151,216,469
15,780,835

Per cent change
from year ago
2.1
3.3
-0.8
-2.5
5.3
-5.0

Source: Information Resources, Inc.
52 weeks ended June 15, 2014
Total U.S. Multi-outlet (Supermarkets, drugstores, mass market retailers, military commissaries
and select club and dollar retail chains)

gained over a point of share," said John
Bryant, chief executive officer of Battle
Creek, Mich.-based Kellogg, during a
May 1 conference call with analysts.
"Innovation drove the Cheez-It brand
as the white cheddar variety and CheezIt Zingz and Grooves all contributed. In
addition, original Cheez-It posted midsingle digit gains in consumption in the
quarter. The Town House brand also
continued to do well as both the core
original variety and new Town House
Pita posted growth in consumption."
Mr. Bryant said Kellogg's intent going
forward is to "play our game," which he
described as innovation driven, in-store
execution driven, while investing back
in the sales organization.
"We have gained share in crackers for
just about every year for the last 10 or
12 years, except for the last one or two
years," he said. "And to see ourselves
back in cracker share growth, to see the
Keebler business growing low single
digits, the Pringles business driving
double-digit growth on top of double
digit-growth. There's a lot of reasons
here to see the business start to turn."
Kellogg trails only Mondelēz International, Inc. in cracker sales. Mondelēz,
with dollar sales of $1,612,694,481, experienced a 2% increase in dollar sales
and 3.4% gain in unit sales during the
52 weeks ended June 15. The company's
Nabisco Ritz, Nabisco Wheat Thins
and Nabisco Triscuit brands decreased
11%, 3% and 4%, respectively, during the period, but Nabisco Ritz Fresh

packed onion, poppy seeds, garlic and
sea salt into a cracker with the new
Everything variety of its Nabisco Ritz
Fresh Stacks Crackers.
Reformulations at Pepperidge
Over at Camden, N.J.-based Campbell Soup Co., parent of Pepperidge
Farm, Inc., Goldfish crackers helped
the company achieve "modest" sales
growth of 2% during the third quarter of
fiscal 2013, said Denise Morrison, president and c.e.o. of Campbell Soup Co.
"Goldfish Crackers grew sales on
the back of increased promotions in
a very competitive environment, and
gained momentum as the quarter progressed," Ms. Morrison said during a
May 19 conference call with analysts.
"However, we saw a significant slowdown in the overall cracker category
and a decline in our adult savory
crackers, which impacted our overall
snacks results. We have reformulated and relaunched our adult savory
crackers as Pepperidge Farm cracker
chips and expect better performance
going forward."
Ms. Morrison said Goldfish Puffs
"have done really well and are meeting
our expectations."
"Not so well were the Pepperidge
Farm cracker chips and Jingos!, which
is one of the things that we're cycling
in that business this year," she explained. "But we have reformulated
the cracker chips and have better expectations for those going forward." MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - July 22, 2014

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