Pasta Chips, Bow Ties, on course to generate revenues of $15m in 2017

From edgy to mainstream: Finding the sweet spot in the snacks market

By Elaine Watson

- Last updated on GMT

Jerry Bello on Pasta Chips, snacking trends, placement
Snack brands that want to break through the $2-3m revenue barrier have to appeal to mainstream shoppers as well as trend-setters in New York or L.A. says serial snacking entrepreneur and CPG veteran Jerry Bello, who says his latest innovations – Pasta Chips and Bow Ties – are on course to generate combined revenues of around $15m in 2017.

Bello – who got the inspiration for Pasta Chips (‘slightly under-seasoned’ flat chips that pair well with cheese, meat or dips) on vacation in Tuscany in 2011​, and first brought them to market in late 2013 – has already secured shelf space for the chips in the deli area of 15,000-20,000 stores, and is confident Bow Ties (slightly over-seasoned’ 3-D puffed snacks, which launched in late 2016) could be equally successful.

While the chips are novel, they are accessible to the mainstream consumer, added Bello, co-founder of Sensible Portions (Veggie straws, Pita Chips) and an investor or partner in scores of brands from Sneaky Pete’s and Sheila G's Brownie Brittle to Thrive Frozen Nutrition and Drink Chia.

For a snack company to be viable it has to be scalable, and I’m feeling a tension right now with all these new companies trying to get to $10m, $12m or $15m but getting stuck at $2-3m because their concepts appeal to people in L.A. or New York, but they’re not mainstream-accepted yet.”

How do you get beyond $2-3m?

He added: “I’m seeing a lot of interesting snack companies that are doing between $700,000 and $2-3m that are trying to raise funds right now, so it’s going to be really fascinating to see which ones will break out.

“If you are happy with building a $2-3m business then you can do that with the more edgy stuff, but if you want to build a $20m, $30m, $50m brand you need to dial things in a little bit.”

Price is also an issue, he said. “Take meat snacks. KRAVE did a great job opening people’s minds to new possibilities and all these artisan brands are chipping away at Jack Links now, but not everyone can afford to pay $6-7 for two ounces of meat, so things could start to plateau.”

As for edible insects, he added, “I think it’s a decade away ​[from the mainstream], so I think it will grow slowly over time, which is a big challenge if you are trying to build a scalable business right now, although I think at some point insect proteins could become a necessity for humankind.

“I think beans and plant-based protein are going to be first ​[to hit the mass market], before crickets.”

pasta chips 2017

Pasta Chips​ - which have a lighter texture than pita chips - contain 60% less fat than regular potato chips and 20% less fat than pita chips, with 4g fat, 120 calories and 3-4g protein per 1oz/28g serving. The ingredients vary according to the flavor, but include durum semolina [durum wheat flour used for making dry pasta], olive oil, potato starch, seasoning and canola oil.

Incremental innovation

So how do you find the snacking sweet spot?

In some cases, success could come from taking an existing, familiar concept (chocolate bark, marshmallows) and creating a new usage occasion through packaging and novel flavor combinations (barkThins​, SMASHMALLOW​)​, he said.

Similarly, adding a new twist to an established snacking concept – cookie dust to ready-to-eat popcorn, for example – could be a winner, he added (ie. you don’t have to come up with the snacking equivalent of the next iPhone to succeed).

“There’s always room to nibble one or two clicks to the left or right of a mainstream offering, so consumers are somewhat familiar with the category and you’re just asking them to go one step to the left or right.”

pasta bow ties
Pasta Bow Ties launched in 2016

I love finding things in other cultures and bringing them here

Another effective strategy is identifying something that’s worked in another market​ and adapting it for the American palate, he said: “I love finding things in other cultures and bringing them here because they have already been consumer tested; Veggie straws were based on something I saw in Europe, for example.”

Regardless of whether you’re going for blue-sky innovation or something more incremental, however, the proposition has got to be distinct and engaging, he stresses.

veggie pasta chips

“Selling snacks for function alone doesn’t work, so you can’t just be about protein, for example. Maybe if there are two snacks and all other things are equal, the one with more protein or the non-GMO label might win out, but you can’t build a brand around these attributes.”

Store placement for snacks

When it comes to store placement, meanwhile, lots of new opportunities are opening up, he said: “You see more snacks being merchandised in the deli now, which is a good spot with great visibility; while brands such as Brownie Brittle work well in bakery; and produce is another emerging area for snacks now as well.

“We’re also seeing new snack products in the dairy set and refrigerated/fresh snacking sets​ in part because of HPP ​[high pressure processing], which is permeating many different product categories now​, so it’s a very exciting time.”

Retailers are also playing around with different ideas in the center of the store, with some folding ‘natural’ sets – which weren’t generating the foot traffic some retailers had anticipated - back into the mainstream snacks aisles, for example, he said.

Merchandising: It’s like the Wild West out there

Finally, in a high-turn category such as snacks, ensuring your wares are merchandised properly is mission critical, said Bello, who recently embarked on a DSD experiment with a news group in Northern California that had not hitherto specialized in snacks.   

“Even within a chain there can be 70-80-90 different configurations, sometimes the snacks are put wherever retailers can fit them, and the amount of facings you get varies, so you might have four authorized SKUs but find you've only got one or two if you actually go into the store and check.

“You could have a mandate from the buyer and still only get 30-40% buy-in from the deli people; it’s like the Wild West.

“When we have four SKUs and the merchandising is good, our sales are double or triple what they are if we are kind of left unattended, so it really pays to get this right.”

snacking innovation summit graphic2

What are the emerging trends in snacks?

From sprouted mung beans to Japanese-inspired onigiri, the snacks market is a hotbed of innovation. But what’s next? Hear from Peeled Snacks, Dang Foods, Field Trip Jerky, Protes and board advisor and guru Brad Barnhorn at our FREE-to-attend online Snacking Innovation Summit on Feb 15​.

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