Packaged Nuts are Here to Stay

Produce departments can give shoppers peace of mind and flavorful packaged nut snacks.

Originally printed in the February 2023 issue of Produce Business.

The COVID-19 pandemic had a big effect on many produce categories. Some categories are trending back to normal, while others, including packaged nuts, seem to be subject to permanent and, in this case, positive change.

Retailers that carry nuts in the produce section had to make major changes when the pandemic hit. Some were prepared. Brooklyn Harvest in New York City was among those retailers who already had evaluated the nut category in terms of changing consumer tastes and had abundant tub nuts merchandised throughout the produce department when the pandemic struck. They had done so for consumers who wanted the nutritional value nuts could bring into their diets as part of the healthy snacking trend but also, in many cases, for vegan and vegetarian shoppers who needed non-meat sources of protein.

At Draeger’s Markets, headquartered in South San Francisco, CA, Produce Division Manager Karim Wahhab said COVID-19 was a defining moment for the nut category, as bulk operations became untenable.

“Right after COVID happened, we took everything and packaged it and removed the bins,” he says. “We were going to remodel and have the bins, but the remodel was modified to only having display for packaged products.”

Today, most of the nut products Draeger’s carries in the produce department are packaged for it as private label, with only a few items packed in store. Although it has become a lesser concern, COVID-19 remains a consideration, and the pandemic made shoppers more conscious of how disease might spread in general. Packaged nuts, Wahhab says, assuage a lot of those concerns.

Melannia Marra, president of Marra Brothers Distributing, Morgan Hill, CA, and a retailer in her own right, says the company is doing private label packaged nuts for multiple grocery and supermarket operators in the San Francisco Bay area.

The ability to do better packaging can be a positive value-add, she says, especially at more upscale retailers. Value-added packaging allows for more attractive displays, and can set the stage for seasonal initiatives in the nut and related categories.

PACKING PROFIT IN A PACKAGE

Packaging can also be a boon in expanding the nut assortment, and provide an opportunity to emphasize particular attributes, including flavors.

“Our Wonderful Pistachios merchandising often incorporates bold key words such as ‘Plant Protein,’ and ‘Low Sodium,’ or touts other key benefits that consumers associate with healthy snacking and eating, which is something that produce shoppers look for,” notes Diana Salsa, associate vice president of marketing, Wonderful Pistachios, Los Angeles, CA.

Chris Large, sales manager at Torn & Glasser, Los Angeles, CA, has been working through the change at retail as his bulk nut business was hit in the pandemic. “COVID put 80% of the country’s loose bulk fixtures out of business,” he says. “One of my biggest customers had extensive bins and all of that went away. A lot of these guys said, ‘We’re going to move all our loose bulk packaged product, or most of it, into clamshells.’ During COVID, everyone wanted to get into a packaged nut program. The packaged nut programs are here to stay.”

The move from bulk to packaged product provided some advantages, Large says, as it allowed Torn & Glasser to put customers on a program that included multiple SKUs. However, when it came to customers who had really large bulk product programs, certain limitations loomed. “Of course, you put them into top sellers,” he says. “We can’t give them 15 trail mixes.”

Tess Mercado, founder and principal of Nutridge Farms, Chino, CA, says packages offer the opportunity of promoting product attributes, whether regarding health, as in unsalted or high in protein, and flavors. She adds the packaging itself can boost consumer confidence in the case of clear or window-inclusive products.

“For me, it’s always been about pure transparency,” she says.

Joseph Setton, executive vice president of Setton Foods International, Commack, NY, says there has been overlap between the bulk and packaged nut customer. Yet, the shift to packaged can be a good thing, and he contends that packaged nuts are generally better in quality terms.

“One of Setton Farms’ strengths is providing premium pistachios with a fresh-from-the-orchard taste. In a bulk bin, you can lose some of that dry roasted crunch and natural flavor,” Setton says.

Although packaged nut programs have advantages, Large notes that merchandising clamshells is not as space efficient, so retailers who had extensive bin fixtures can’t necessarily get as many SKUs into the same space they devoted to bulk items.

Large also points out clamshells and other packages have set weights, and that can be a limitation. “Here’s the thing when you compare loose bulk to something in a package: You lose about 30% to 40% of your volume by weight,” he says. “People buy more when scooping into a bag than when they are looking at an 8-ounce clamshell.”

For Nutridge, Mercado says the company’s simpler and low-key design template has worked well, but as the company expands, she’s looking into more eye-catching configurations for her pouch packs.

“I’m looking at trends in packaging, and they’re leaning toward more bright, colorful designs that bring more focus to the product,” she says.

She has also begun using plastic bottles as nut packaging, offering nuts in a flip-top bottle that fits in a car cup holder, so shoppers can flip the top and eat as much as they want directly from the spout without handling the nuts, then pop the top back down to store them.

“People really get a kick out of it,” Mercado says. “They love the packaging.”

CAPTURE SALES WITH CREATIVITY

Creative and dedicated merchandising can open up new sales opportunities. As examples, place clamshells throughout the produce section in space that might not otherwise be fully exploited, upfront in the produce department as part of convenience presentations and on endcaps to increase the product profile both to encourage impulse sales and to establish the store as a destination for nut purchases.

“Packaged nut programs can open up a lot of opportunities,” Large says.

The past few years have been subject to fluctuation in demand for pack sizes, Salsa says.

“In our experience, the pack size of Wonderful Pistachios that consumers purchase goes back-and-forth, depending on circumstances,” she says. “For instance, in 2020 and 2021, while many people were under lockdown, it is no secret consumers pantry-loaded and stocked up with larger sizes. Holidays are also a period of time when we see an increase of larger-sized bag sales. We have developed a thoughtful channel strategy to ensure product is available to consumers when they want it and in the applicable pack-size.”

Because produce department space is notoriously precious, Setton points to the company’s new shipper. Preloaded and ready to sell, this convenient display can hang from quarter pallet bins and existing fixtures or display like traditional shippers. “Showcasing some of our most in-demand products while using minimal to no floor space makes this display an extremely easy way for retailers to add more pistachios to their produce section.”

With the variety of nut products available, merchandising and cross-merchandising opportunities have grown, Setton says, and encourages retailers to create recipe-ready displays to make it easier for consumers to grab everything they need. “We’ve done the work and removed the shells for consumers, making them ready to add color, crunch and delicious taste to any recipe,” he adds, “and we have recipes for everything from appetizers to dessert that we are happy to share with retailers who need some inspiration.”

Salsa says branding can be a basis for cross-merchandising.

“At Wonderful Pistachios, we find that a strategy to increase retail sales is by putting two or more like-minded brands together,” she says. “Most consumers buy on impulse when shopping in-store, so displaying Wonderful Pistachios next to Wonderful Halos and Wonderful pomegranates for instance, has made it easier for consumers to find healthy snack options all in one strategic location.”

Setton Pistachio is also supporting retailers by generating consumer demand for pistachios through collaborations with influencers and ambassadors, Setton says. “We also offer health and wellness information for in-store nutritionists.”

EXPLODING WITH FLAVOR

Packaged nuts have been subject to another trend, also playing out in produce sections, which is the expansion of flavored products.

Salsa says that Wonderful Pistachios provide a nutritious snack choice, in both in-shell and no-shell options, and cites IRI market research that named Wonderful Pistachios No Shells “one of America’s fastest-growing snack brands.”

Since launching its award-winning Smoky Barbecue and Sea Salt & Vinegar flavored No Shells in 2021, “Wonderful Pistachios has seen record growth, confirming that consumer demand dictates the need for flavorful varieties,” Salsa says. These No Shells flavors joined an existing No Shells flavor lineup that includes Chili Roasted and Honey Roasted, and the brand will be debuting a No Shells Sea Salt & Pepper variety in March 2023.

Marra Brothers Distributing has developed a line of chili-flavored nuts. “We have them set out separately in their own packaging,” Marra says, “with labeling that is clear and bold over a full ingredient listing.”

With its introduction of a chamoy flavor, Nutridge Farms demonstrates that the nut business can quickly adopt trending flavors. Chamoy is proliferating in the Latin food section as a condiment that makes a tasty food ingredient, and the company added chamoy as a flavor element in its Fiesta product line. Then, there are the new Nutridge Farms vegan date sugar-flavored almonds, walnuts, cashews and pecans.

In addition to 7-ounce flavored packages like Chipotle BBQ, Chili-Limon, Garlic Onion, Jalapeno and Salt & Pepper pistachios, Setton Farms offers seasoned pistachio kernels in a new 2.5-ounce size, including extreme Scorpion Pepper, bold Buffalo Wing and classic Salt & Pepper varieties.

“While traditional in-shell SKUs continue to do well, consumers are looking for flavor,” Setton says. “No shell pistachios are becoming very popular as they’re the perfect grab-and-go item.”