As Americans continue to trade traditional meals for smaller eating occasions throughout the day, the $7 billion market for US crackers (as of 2013) is benefiting from this shift in eating habits, especially those touting healthy ingredients in their snacks and salty snacks, according to "Crackers: US Market Trends," a report by market research publisher Packaged Facts.
Packaged Facts estimates that total US retail sales of crackers will increase by $2 billion, to $9.3 billion, by 2018, due in large part to this shift in consumer habits, alongside growing interest in healthy snacking.
Since 2004, the number of consumers categorized as “healthy snackers” has swelled from 29 million to 41 million, or from 14% to 18% of the population. This group forms the core of a key consumer segment that is driven by health and wellness concerns and drawn to snacks derived from healthy ingredients such as vegetables, legumes, high-protein foods and ancient grains.
In turn, major manufacturers have begun rolling out an ever-expanding line of innovative products to challenge consumers’ notion of what constitutes a snack—and in the process countering soft sales and slow growth in product segments such as potato chips and cheese snacks. Smaller players are grabbing market share with creative, artisanal products that satisfy customers’ desire for authenticity.
Heavy cracker users accounted for 90% of growth over last decade
For the report, Packaged Facts defines the market for crackers based on major product types, including crackers with fillings or sandwich crackers; graham crackers; saltines; and “all other crackers,” a category comprising cheese-flavored crackers, crackers made with various grains, flatbreads and so-called crisps. The report also analyzes consumer behavior related to the categories of crackers tracked by Experian Marketing Services’ National Consumer Study (NCS), which include butter- and cheese-flavored crackers; grain crackers, including those made from oats, wheat and rye; other flavored crackers, such as those with onion and barbeque flavors; graham crackers; and saltines.
Since 2008, the US crackers market experienced cumulative growth of 21.4% and compound annual growth of 4%. Although the total number of households using crackers increased only modestly between 2004 and 2013, the proportion of those using relatively high volumes of crackers grew more significantly. The percentage of households using 12 or more bags grew from 41.2% to 44.6% and increased by 17.4%, from 14.5 million to 17 million.
These high-volume users of crackers represent one of the key factors in the performance of the market for crackers, a phenomenon that also can be seen in the market for salty snacks. Households consuming 12 or more bags of crackers accounted for nearly 90% of the growth in household consumption of crackers during the period.
Connecting crackers to health and wellness
A 2013 report from The Netherlands-based Innova Market Insights found that new product launches in savory crackers are increasingly positioned on a health platform of some kind. On a global basis, Innova Market Insights determined that more than 40% of launches of savory crackers take this approach but in the US 80% of new cracker launches are based on a health platform.
Smaller manufacturers step up game with authentic, health-minded options
Although Mondelez and Kellogg Co. rank No. 1 and No. 2, respectively, both have lost mass-market share for the year ending Sept. 8, 2013. Despite overhauling its 110-year-old Triscuit brand with extensions to the Brown Rice line with flavors such as red bean with roasted red pepper and sweet potato with roasted sweet onion, Mondelez is facing increasing competitive pressure. And although Kellogg charted growth in its snack division in 2012 due to “strong crackers consumption behind the
launch of Special K Cracker Chips and Cheez-it innovation,” 2013 sales data revealed that the Special K cracker brand was down 16.4%, while dollar sales of Cheez-it were essentially flat.
Indeed, many successful marketers of crackers are small, family-owned companies bringing creative, healthier options to the marketplace. Packaged Facts expects that this phenomenon will generate growth in the market for crackers as it has in other segments of the market for snacks.
Snyder’s-Lance Inc., led by its recently acquired Snack Factory brand, registered a double-digit dollar sales increase and saw its market share increase by 0.5 points. The smallest marketers of crackers (those with dollar sales of less than $42 million) recorded an aggregate dollar sales increase of 6.2% and an increase in market share of 0.3 points. In the “all other crackers” category, for one, Boulder Brands Inc.’s Glutino brand rode the wave of growing consumer interest in gluten-free and posted a 67.2% dollar-sales gain during the period.
It was more of a mixed bag for private label crackers, which posted gains in the traditional categories of saltines (29.7%), graham crackers (23.7%) and breadsticks (25.2%). Yet they achieved only 4.3% of dollar sales for “all other crackers” and 7.6% of the market for crackers with fillings.
Gluten-free, hot & spicy, crossover into ‘snacks’
Among trends to watch, gluten-free is becoming a must for cracker manufacturers, with Mondelez (Nabisco Rice Thins) and Partners, A Tasteful Choice Co. among those offering gluten-free selections. Hot and spicy flavors continue to attract consumers as well. After uncovering “an increasing desire for flavors that excite the senses with bold, ethnic flair” last year, Kellogg Co. responded by launching Zingz crackers in chipotle cheddar and queso fundido flavors. Manufacturers are also blurring the boundaries between crackers and salty snacks with crisps and other hybrid offerings, such as Mediterranean Snack Foods’ HummuZ Crackers, which are billed as “lighter than a cracker, sturdier than a chip.”
And yet, even though the market for crackers is being transformed by rapid innovation and new competitors, old-fashioned and comforting crackers still endure as market mainstays. For instance, more than 40% of households use saltines and 23% use graham crackers.