Pandemic fuels peanut butter, snacking peanuts, as US per capita consumption rises to all-time high
“A 3.2% increase in peanut consumption is pretty significant given what a mature market this is,” said Bob Parker, president and CEO at the National Peanut Board, who told FoodNavigator-USA that US retail sales of peanut butter were up 75% year on year in March and up almost 20% YoY in April.
While peanut candy and in-shell peanuts (a fan favorite at sports stadiums) “experienced declines during the first months of the pandemic due to closures and restrictions, they ended the year [the peanut marketing year ends July 31] with increases,” said Parker.
Peanut innovations
As for new innovations and applications, JIF and SKIPPY have both launched new squeezable and no sugar added products, noted Parker, while peanut baby foods—a category that didn’t exist five years ago—is also a growing opportunity, with large food brands entering the space, including Gerber’s recent launch of a peanut puffs line, Happy Family Organics baby food with peanut, and Earth’s Best peanut puffs.
"While the entire peanut butter category has seen growth as kids stay at home, the SKIPPY brand has thrived and outpaced the competition. We've also launched numerous new innovative products which are seeing early success.
"SKIPPY Squeeze, SKIPPY No Sugar Added, and SKIPPY Peanut Butter Blended with Plant Protein, each deliver a unique consumer proposition and are helping extend and grow this iconic brand."
Jim Snee, CEO, Hormel Foods, Q3 earnings call, August 25, 2020
Elmhurst 1925 drops peanut milk; Smucker drops JIF Power Ups
Not every recent peanut-fueled innovation has been a hit out of the blocks however.
JM Smucker - which posted a 14% increase in sales of JIF branded products in Q1 - recently discontinued JIF Power Ups granola bars (launched in 2019 as an attempt to extend the peanut butter brand into the snack category) amid disappointing sales.
Peanut milk, another new application area for peanuts, also failed to resonate with shoppers, with Elmhurst 1925 confirming that it dropped its Milked Peanuts line last year.
Launched in early 2018, the ‘milked peanut’ beverages offered more protein, less sugar, a creamier mouthfeel and a shorter cleaner label than other nut milks, and was one of the most eagerly anticipated launches in the category, given the mass market appeal of peanuts vs some of the more niche offerings in this space.
However, VP of Marketing Heba Mahmoud confirmed that milked peanuts had been dropped early last year: “Allergen concerns were a contributing factor but mainly, we saw there was a strong demand in other nut- and oat-based products and we decided it was best to focus our efforts where our consumers wanted it most.”
But she added: “We are always exploring new opportunities and we may bring back the product someday.”
Aflotoxin challenges
On the peanut farming front, aflatoxin (mold) had caused major headaches for the 2019 crop last year owing in part to extremely hot and dry weather late in the growing season, said Parker, who noted that a lot of peanuts had been sent to China and crushed for oil (instead of going into the domestic food and snacking market).
While aflatoxin is an ongoing issue for non-irrigated crops (around half the acreage in the US), this year’s crop (being harvested now) is looking far more promising, he said, noting that acreage is up significantly in 2020. Work is also progressing on marker-assisted breeding to conventionally breed new peanut varieties that are more drought tolerant, he added.
As for how the constraint on supplies in 2019 had impacted prices, he said: “All the big manufacturers buy forward, so we didn’t see huge price increases on the shelf, although spot prices for raw shelled peanuts shot up.”
Speaking during J.M. Smucker's Q1, 2021 earnings call in late August, CEO Mark Smucker said: "We have seen some cost increases on peanuts, largely because of crop quality, but we were able to partner very closely with our retail customers in order to manage that in a very judicious way, making sure that we are able to pass along our cost in an appropriate way, of course."
