The big business of smaller bites

The appetizers that once came before the meal are increasingly becoming the meal, as more consumers opt for smaller, frequent snack-size meals throughout the day instead of sticking to the traditional three squares.

Almost half of American consumers now snack twice a day, compared with about one quarter a year ago, according to a recent survey from Technomic, and 37% have widened the category to include more types of food, drink and restaurant menu items. Restaurants, including McDonald’s, Burger King, The Cheesecake Factory and California Pizza Kitchen, are adding smaller, less-pricey menu options to grab a bigger slice of the growing group of grazers.

Last week, Burger King launched two items — chicken strips and snack wraps — aimed at snackers, BurgerBusiness reported, a move that followed on the heels of McDonald’s successful launch of Chicken McBites, which helped boost the chain’s February sales 11.1%.

Technomic also reported that restaurant chains are:

?Offering more small plates and snack items on their late-night menus to appeal to younger guests.
?Upgrading sliders from simple snacks to smaller versions of full-sized gourmet burgers.
?Responding to consumers’ growing demand for healthier foods with better-for-you snack choices.
But restaurants aren’t the only ones jumping onto the snack bandwagon. Convenience store chains have been boosting their grab-and-go options and consumer packaged goods companies, including PepsiCo’s Frito-Lay, Kraft Foods and Kellogg, are upping their investments in developing snack items, according to a Dow Jones report.

In addition to the growth of snacking in the U.S., developing countries are ripe with potential as more women enter the workforce and retailers invest in modern store formats. “The way that people snack from one market to another is a lot more similar than it is different,” said Kraft Chief Executive Irene Rosenfeld.

The global market for snack foods totals about $560 billion, and food companies are exploring different avenues to increase their slice of the pie, analysts told Dow Jones. Kraft decided to spin off its snack division, which includes Oreos and Cadbury chocolate, from its North American grocery business. Kellogg, which already owns Keebler, Cheez-It and Kashi, announced last month that it will pay Procter & Gamble $2.7 billion to acquire Pringles, a move that would make Kellogg the second-largest global snack provider.

Rising demand isn’t the only factor fueling food companies’ increased focus on the snack category, Dow Jones reported. For one thing, companies are likely to see sales in other categories slow as the economy improves and consumers dine out more, and they’re looking to increased snack sales to make up the difference. For another, snacks are products that appeal to consumers with an initial low price that’s fairly easy to increase over time.