Crackers see strong sales in weak economy

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Even though the U.S. has left behind the recession of 2008 and 2009, the weakened economy continues to affect the baking industry, although in the case of crackers, it's had a surprisingly positive effect.

Michael Morrissey, brand public relations manager, Kellogg's, Battle Creek, Mich., sees crackers appealing to consumers in several different ways. “Crackers are tied to a few big consumer trends — the desire for healthier eating, more entertaining at home and the need for on-the-move food,” he notes. “We are seeing consistent growth across our entire snack business, with crackers being particularly strong.”

Both brand name and private label sales have experienced a boom, with the latter selling especially well as consumers continue to keep an eye on their expenditures. In keeping with their new frugal habits, consumers have been stocking up when the price is right.

“We've seen customers purchasing crackers while they are on sale or on some type of promotion, such as our buy one-get-one-free sales,” notes Maria Brous, director of media and community relations, Publix Super Markets Inc., Lakeland, Fla. This observation, coupled with the recent news that consumers redeemed a record-setting 3.3 billion coupons last year, indicates that consumers aren't abandoning thrifty living just yet.

Despite the private label boom, Publix hasn't made a deliberate effort to play up its store brand.

“We have built a loyal following to our private label brand products, and in addition, in a weak economy, private label sales are flourishing,” Brous explains. “Our private label brands are created to meet or exceed their national brands counterparts, and this creates a win/win situation for our customers — high-quality products at a savings with no sacrifice.”

Demand for lower prices

This emphasis on competitive pricing also has affected the manufacturing side of the cracker market. Joel Payne, manager for CFT product development and tech service in the bakery group of Kroger Co., Cincinnati, says demand for lower prices has changed the company's priorities.

“As the economic crisis took shape, Kroger made a concerted effort to get as many lower-priced items as possible to be easily available at all stores,” he explains. “Earlier plans had called for us to introduce some new flavors of seasoned snack crackers, but as things developed, we found ourselves filling all available internal plant capacity with existing products. Consequently, we have delayed plans to add additional cracker varieties. The more urgent current objective is to locate and qualify outside vendors to back up our plants when demand outstrips our production capability.”

Early predictions are that 2010 will see similar buying behavior by consumers, indicating it'll be another busy year for the cracker aisle.

TOP 10 Brands: Dollar and Unit Sales (millions)

Source: Infoscan Reviews, Information Resources Inc. (IRI), Dec. 27, 2009

Source: Infoscan Reviews, Information Resources Inc. (IRI), Dec. 27, 2009