Consumers say they want more protein, fewer calories and foods that deliver added benefits like hydration, and yet many are still lining up for frozen drinks at the movies, pretzels at baseball games and frozen treats on hot summer afternoons.
For food manufacturers, that creates an interesting challenge: How do they modernize brands built on indulgence and nostalgia without changing the experiences that made them iconic?
J&J Snack Foods is tackling this question across a portfolio packed with iconic brands, including ICEE, SuperPretzel, Luigi’s Italian Ice and the ice cream of the future: Dippin’ Dots. Recent launches, from electrolyte-enhanced frozen treats and protein-enriched pretzels to lower-sugar frozen beverages, reflect changing consumer preferences, while limited-time flavors and entertainment partnerships are designed to keep long-established brands culturally relevant.
At the same time, the company is undergoing a transformation behind the scenes, streamlining manufacturing and distribution as it looks to improve efficiency and create capacity for future growth.
In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast, J&J Snack Foods President and CEO Dan Fachner shares what it takes to evolve heritage brands for a new generation of consumers, without alienating loyal fans, and why innovation must extend far beyond the products for a CPG company to not only survive in a highly competitive industry, but ultimately thrive.
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Why heritage brands still matter
J&J Snack Foods may not be a household name, but many of its brands are. And the aroma, taste and experience of enjoying J&J’s products evoke fond childhood memories and a deep sense of nostalgia tied to experiences. This connection not only reinforces repeat purchases and engagement with heritage brands, but as Fachner explains, it also insulates the company from some of the headwinds threatening indulgent snack sales.
“At J&J, we’re so proud and honored to be able to have some of the products that people grew up with and have a story around each of those products,” such as buying a SuperPretzel at the baseball game, an ICEE frozen drink at the movies or Dippin’ Dots at the amusement park, he said.
Those experiences and where the products are sold “insulates us some from the MAHA movement or the GLP-1 drugs that are becoming more and more popular … because our products bring back an experience that they go with,” he explained.
How to modernize brands without losing the magic
While nostalgia and emotional connection are powerful repeat sales drivers, they are not enough to grow a brand or maintain a business across multiple generations and decades.
To survive 55 years, J&J Snacks must continually expand the appeal of its products, which Fachner says requires a delicate balance of innovation and strategic partnerships to reach new consumers without alienating existing fans or compromising the brands’ existing magic.
“We have these brands that people love and admire. The key is how do you keep those relevant for the next generation? How do you bring on new products within our core brands that attract the generation to come?” he asked.
The answer goes beyond updated imagery. It includes launching new forms, such as pretzel sticks that consumers might buy at a restaurant versus the baseball game, or strategic flavor extensions, like a yellow banana flavored ICEE consumers can buy when they watch the latest Minions movie in the theater.
“You have to always be innovating. You have to see where the consumer is at and then meet the consumer from that point,” Fachner said.
This can be more difficult than it sounds – but isn’t impossible, he explained.
For example, recent shifts in consumer snacking to prioritize better-for-you, hyper convenient and portion-controlled products may sound like trouble for a business like J&J Snacks, which built its portfolio around indulgence, joy and novel experiences that break free of everyday drudgery. But, Fachner says, J&J Snacks is innovating to meet modern consumer needs through fortification, reformulation and, in some cases, stealth health that supports shoppers’ health goals without casting a shadow over fun-first eating experiences that are the cornerstone of the company’s business.
For example, it recently extended its SuperPretzel line to include a high-protein option, and it added in-demand health benefits to its Luigi’s Italian Ice. For ICEE, it approached better-for-you from the other side – quietly reducing sugar and cutting calories.
And across the brands, it began offering smaller sizes for portion control.
Offering these items in addition to, rather than in place of, the traditional selection helps protect the company against fickle fads that may not last while simultaneously positioning it to deliver on long-term trends that are here to stay.
“You have to be careful that you don’t shift your whole business” into a new business opportunity, he explained. For example, adding a protein pretzel alongside the traditional pretzel allows the company to meet the demand for protein and added health benefits, but still protect its core business by continuing to offer the traditional selection.
Limited Time Offerings and strategic licensing partnerships are another way J&J Snacks meets fast-changing consumer whims while protecting its long-term business.
For example, this summer the company licensed Dr Pepper for a new Dippin’ Dots flavor, which amplified both brands’ nostalgia and appealed to each company’s consumer base.
Collaborations are another useful tool for extending a brand’s reach or driving trial among a new consumer group, but Fachner warns companies carefully consider partnerships to ensure they are mutually beneficial.
J&J’s innovation strategy notably focuses on its existing brands, rather than launching completely new products or businesses. Fachner explains this helps the company remain focused on the consumer relationship and reduces the risk of distraction.
The business behind the brands
Innovation isn’t only happening on the consumer side. J&J has also spent the past few years reshaping its operations through Project Apollo, which is a business transformation and cost-savings initiative aimed at generating $20 million in annualized operating income.
The project focuses on consolidating production at updated “super plants,” streamlining its warehouse network and discontinuing less profitable SKUs.
“Apollo has really been about optimizing our footprint. We have shut down basically three and a half plants, and have been able, because of the investments we’ve made, to move those products into another plant. An example of that is we had two churro plants out in California, and so we invested a little bit in the larger churro plant, and then we’re able to absorb both churro plants into one building, which just makes you more efficient,” Fachner explained.
“More efficiency also means lower prices for consumers, which helps bolster sales and units. The more efficient we get, the more efficiently we can sell products, the better that you can keep prices down to the consumer,” he added.
J&J Snacks is far from the only large CPG company pursuing this strategy. The Coca-Cola Co. drastically rationalized its portfolio during the pandemic and sold off several beloved businesses that didn’t meet established thresholds. Tyson Foods also has upgraded several plants to bring more value-added products to the market and shuttered other under performing facilities.
Fachner stressed that these decisions are never made lightly nor in isolation.
“Good leaders will look at their organization and build them for the future constantly. You should never build just for tomorrow. That should always be something you’re building for long term, not only for not only for the health of the organization, but for the health of the investment community as well,” he said.
On that note, he says he is optimistic about the year to come.
Looking ahead, Fachner said he is optimistic about the company’s innovation pipeline and the potential for acquisitions.
Ultimately though, for J&J Snack Foods, the goal is not to reinvent heritage brands, but to keep them relevant for the next generation of consumers while building a more efficient business to support long-term growth.
