Snyder of Hanover's Michael Warehime
Receives Circle of Honor Award

SFA's prestigious Circle of Honor Award was presented to Snyder of Hanover Board Chairman Michael Warehime during the opening session of SNAXPO 2009 March 30. 

Warehime was honored for his lifelong commitment to the snack food industry. “All of us in the snack food industry truly appreciate the contributions that Michael Warehime has made to our industry,” said SFA outgoing Chairman Daryl Thomas, Vice President of Sales & Marketing, Herr Foods Inc.

During his remarks, Warehime urged SFA members to be actively involved in their association, particularly in today's challenging times.

New SFA Chairman Installed

Terry McDaniel, President & CEO, The Inventure Group, Inc., was installed as the 2009 Chairman of the SFA Board of Directors during SNAXPO, succeeding Daryl Thomas, Vice President of Sales & Marketing at Herr Foods, Inc.
McDaniel credited Thomas with helping to make SFA stronger over the past year and said his priorities will be to further strengthen the association's government affairs initiatives, improve programs and services, initiate strategic options for the future, and improve member communications.

Both McDaniel and Thomas urged SFA members to register now for the Day in DC Spring Summit May 13-15 at the University Club in Washington, DC.

"Change is coming and the new administration has put us at odds with many issues," McDaniel said.

Key issues to be addressed at Day in DC include the Employee Free Choice Act, which SFA strongly opposes, new food safety legislation, reauthorization of the Child Nutrition Act, Dietary Guidelines for 2010, efforts to reduce the impact of biofuels on food costs, restrictions on foods available under federal nutrition assistance programs, and many others.

Attendees will meet with members of the House and Senate and hear from key officials about developments in the Obama Administration and Congress. For more information, please contact Jim McCarthy at 703-836-4500, ext. 201.

State of the Industry Report: Focus on Value

While many consumers face tough times economically, snack foods are still important, although increasing numbers are searching for the best value.

That was a key conclusion of the 2009 State of the Snack Industry report presented March 31 at SNAXPO by Sally Lyons Wyatt, Senior Vice President, Information Resources Inc. (IRI).

After snack purchases declined most of 2007 and into the first quarter of 2008, Wyatt said they increased by 1.1 percent in the fourth quarter of 2008 over the same period in 2007. Still, she said, 79 percent of consumers say they want the best value when they purchase their snack products.

“Everybody is trying to make each dollar count and is making sure that what they buy provides value for their families,” she said. “There is no question that the economy has had a significant impact on what consumers value and how they shop.”

IRI surveys show that 26.5% of consumers say they are snacking less frequently and that 47.5% report they are cutting back on what they spend on snacking. 54.3% say they are buying what’s on sale instead of their favorite brands. In addition, 46% of shoppers say they have increased private label purchases. Private label volume increased 8% and dollar sales were up 6%, according to IRI.

However, IRI numbers show that salty snacks and cracker volume declined only 1% over the past year, and that snack nut volume remained even.

While Wyatt said consumer interest in healthier-for-you snack products continues to grow, she cautioned manufacturers not to ignore their indulgent brands. “Snacking frequency is rebounding,” she said, “with indulgent regaining traction. 47% of shoppers say they want to eat what tastes good rather than what’s healthy, and two-thirds of snack purchases still are in indulgent snacks.”
Presentation slides.

NPD Report:
Consumers Seek Convenience, Low Prices

NPD Group Vice President Harry Balzer told a SNAXPO audience March 31 that while many Americans are looking for the lowest price possible when they buy food, convenience and taste are still important.

“It’s about value and me not cooking,” Balzer said. “Americans want conveience, fast, and fresh.” He predicted that “the next century will be about packaged meals.”

Balzer said 47% of Americans surveyed by NPD say they are trying to avoid snacking entirely, and that last year's fastest growing snacks included candy, gum, fresh fruit, chips, pretzels, ice cream, cookies and crackers.

While better-for-you snack purchases increased from 23.5% in 2006 to 27% last December, taste, is the most important reason why Americans purchase snack foods, Balzer said. Despite increasing obesity in the U.S., Balzer said dieting trends are at an all-time low.

“Health today is about adding,” he added, noting the popularity of products that offer whole grains, dietary fiber, antioxidants, omega 3, and probiotics. He also pointed out the increasing popularity of natural and organic, with consumption of those products increasing from 12.6% in 2004 to 25.2% in November 2008.

Presentation Slides

Ambassador Burns:
It's All About the Economy.

Former U.S. Ambassador R. Nicolas Burns, in the March 30 SNAXPO keynote presentation, said the dominant challenge for the new Obama Administration must be to return the nation to prosperity. "It's all about the economy. That's the whole battle," he said.

Burns called for more regulation of Wall Street, but cautioned that the "pendulum" must not swing too far. "Eventually, it will be the small businesses and the corporations of this country that will get us out of this economic crisis," he said. "The government cannot direct the economy. The biggest challenge is to get the balance right and give the private sector enough rope to create wealth."

A 27-year career diplomat, Burns served in the administrations of George H.W. Bush, Bill Clinton, and George W. Bush.

Chamber Economist:
Recession to Last Until Q4 '09

Dr. Martin A. Regalia, Vice President of Economics and Tax Policy at the U.S. Chamber of Commerce, said Monday at SNAXPO he expects the nation to climb out of recession during the fourth quarter of this year.

"Consumption is a driving force of the economy," he said, noting that with real disposable income declining and job losses continuing Americans are slow to purchase new products. Dr. Regalia warned that President Obama's proposal to increase taxes on upper income individuals would hurt the economy.

He said it was essential for the government to assist troubled financial institutions "as distasteful as it may be," and that it is "paramount" that the Administration's efforts succeed. Regalia criticized the Obama budget proposal as too costly and said taxing companies doing business abroad would make them weaker and cost even more jobs in the U.S.

DSD Benefits Explained at SNAXPO

Rick Heller, Clarkson Consulting, the lead authors of a Grocery Manufacturers Association study on direct store delivery (DSD), told SNAXPO attendees that DSD offers significant advantages in terms of efficiency, merchandising, and speed-to-shelf over products distributed via wholesalers.

Heller said DSD supply chains are two to five times faster in sensing demand and replenishing store shelves and that the process allows manufacturers to get new products on store shelves in time to take advantage of sales and marketing efforts.

The GMA study showed that the top 10 DSD products grew by 14.90% in 2007 compared to 9.80% for all other brands.

SNAXPO Attendees Get Acrylamide Update

Industry initiatives to reduce acrylamide were discussed in a special educational session and attendees were advised to continue efforts to minimize acrylamide formation in their products. The session updated a special day-long session presented by SFA last December.

Martin Hahn, a partner at Hogan & Hartson, SFA’s Washington counsel, said that under California’s Proposition 65, which requires a warning notice when a product contains a listed chemical known to cause cancer, products with more than 275 ppb of acrylamide may be subject to the labeling requirement.

Dr. Matthew Kleinhenz, Associate Professor at Ohio State University, said it is possible to obtain potato varieties less susceptible to acrylamide than others.

Jerry Vogel, Group Vice President, Frito-Lay, Inc., outlined long-standing efforts of his company to minimize acrylamide in their products.

10 Reasons Why LEAN Implementations Fail

According to Mattie Watson, partner at WCM Associates, 75% of all Lean implementations fail.

The top three reasons, which she told SNAXPO attendees are fatal to success:  lack of top-down management leadership and support, lack of communication, and lack of middle management buy-in. Lean is a business system for organizing and managing product development, operations, suppliers and customer relations.

Businesses and other organizations use Lean principles, practices, and tools to create precise customer value with less human effort, less space, less capital, and less time than the traditional system of mass production. For more information about Lean, visit www.lean.org. 

Business Brisk on SNAXPO Show Floor

More than 100 exhibitors took advantage of SNAXPO to open the door to new business opportunities and relationships with the top snack industry companies around the world.

"The traffic has been excellent," said Brian Nickerson, research and development manager for Continental Ingredients Wednesday morning.

"The people coming by are genuinely interested and are looking to expand their business. The principal focus has been on healthier products." Said Ryan Morris, a food scientist at WILD Flavors, Inc., "This show's awesome. We come here every year. I like to see what's new and the different flavor concepts and new products."

For Rob Glover, Key Account Manager at Parker Dominick Hunter, which produces nitrogen generators, this year’s SNAXPO was his first. “It’s been a success for me because of the networking with other exhibitors and attendees, generating leads and speaking with other businesses that tie into what we do,” he said.

“It’s been a great show,” commented Archie Jones Jr., Regional Manager-Latin America at Aeroglide Corporation. “The quality of the traffic has been outstanding and it’s been worth the investment. We have seen upper management and even ownership personnel from quite a few companies.”

“We were able to make new contacts with a number of international business people and there is a high level of interest,” said Land O’Lakes’ Kevin Andrews. “We’ve been able to build and expand our contact base, and some of the first-time people I’ve met say they are looking forward to attending next year’s show in Fort Worth.”

Savor Seasonings’ Jeff Higgins said he found “a high concentration of good prospects” at SNAXPO 2009. “I’ve been able to generate a lot of good quality leadsl,” he said.

“I give it a thumbs up,” said Michael Gilmartin, President, Commercial Creamery Company as the show wound down. “We’ve had good traffic, and the format was excellent.”