CSP Magazine

Grabbing a Handful of Snacking Insights

A look at taste trends and consumer tendencies driving five snack segments

Stop wherever you are—the office, the airport, the subway—and look around. Eight out of 10 people around you snack at least once a day, primarily in the afternoon or evening. Two in 10 will tell you they plan to snack more in the future, with nearly four in 10 of the millennials in your sightlines saying the same, according to Sullivan Higdon & Sink, Kansas City, Mo.

With U.S. snack sales projected to reach $47.5 billion this year, up from $34.2 billion in 2005, according to Statista, New York, we’ve officially become a nation of snackers.

And while we may be eating more healthy snacks than before, indulgent items are still winning out.

“The bulk of consumers are still coming in for traditional snacks,” says Steve Watts, COO of Stinker Stores, a 70-unit c-store chain in Boise, Idaho.

Healthy snacks as a category isn’t revolutionizing your plan-o-gram, but it’s nonetheless infiltrating each snacking subsegment in subtle ways, including the appeal of protein in meat snacks and the perceived long-term satiation of bars and trail mixes.

Of course, health vs. indulgence isn’t the only trend affecting the category. Daring young brands, bold new ingredients and the response to commodity crises are all shaping what comes into—and hopefully goes out of—your stores.

Table of Contents

Meat-Snacks Sales Beef Up

Health Fires Up Salty Snacks

Candy Seeks Evolution

Brands Keep Baked Goods Strong

Popcorn's On Fire

Complete Story In Digital Edition

Meat-Snacks Sales Beef Up

Big growth is afoot in the meat-snack category: Consumer trends and manufacturer innovations helped drive 7.2% unit sales growth in c-stores last year, according to Chicago-based IRI.

“Meat snacks are on fire,” says Carla Boyington, director of category management for wholesaler Core-Mark, South San Francisco, Calif.

At VERC Enterprises, a 24-store chain based in Duxbury, Mass., sales of meat snacks are up 20% to 25% this year vs. 2014, and they constitute 16% of all snack sales, says snack category manager Courtney Vercollone.

She attributes this to a number of factors: Meat snacks are typically made of all-natural ingredients and are high in protein, and manufacturers are coming out with new iterations and flavors ranging from bacon to jalapeño and garlic to keep consumer interest high.

“Where we see particular growth is in 3-ounce jerky bags,” which sell for $4.99 to $7.99, she says. She merchandises them mostly on endcaps, with space for 12 to 16 varieties. “And since the category is growing with new flavors and new brands, I tend to clip-strip newer items around the store.”

Stinker Stores typically merchandise meat snacks in a small set at the front counter and with their salty set. “As people get more health-conscious, it feels more healthy to grab a meat snack than a candy bar,” says Watts. “And there are a lot more options now than there were two or three years ago.”

What’s driving this category, says Boyington, is craft jerky from smaller companies, as well as brands offering all-natural products, different meats such as chicken, turkey and pork, and more unusual flavors. The desire for protein is also a strong driver.

The ripple effect of meat snacks’ popularity is being seen across all retail segments. According to Nielsen, sales of meat snacks increased by 13% for the 52 weeks ending March 28, 2015.

Meat snacks are also being offered in more formats and flavors. Austin, Texas-based Epic offers meat snacks (from humanely raised, grass-fed animals) in resealable bags, as well as bars and trail mixes (flavors include bison-chia-bacon-raisin and pulled pork-pineapple).

Meat snacks from Core-Mark come as their own inline set. “We present it as a multivendor endcap, which leads to a 20% increase in sales,” Boyington says. “Then it can be positioned with beverages for a great tie-in.”

Millennials may be driving sales of meat snacks, particularly the niche brands, says Jarrett Paschel, director of innovation for Centric Brand Anthropology, Seattle.

“They were born into a world of higher-quality food like fast casual and don’t care about big brands,” Paschel says.

Another factor that’s appealing to millennials, says Darren Seifer, executive director of NPD Group, Port Washington, N.Y., is clean labels, and having few ingredients is something meat snacks can boast. “People are trying to get closer to fresh and natural and are taking note of ingredients,” Seifer says.

CONTINUED: Health Fires Up Salty Snacks

Health Fires Up Salty Snacks

Sugar’s out, but snacking is in, and Chicago-based Mintel predicts the salty-snacks category will grow by 21% from 2014 to 2019 due to the increase in snack consumption and continuing product innovation.

“Sugar is the No. 1 thing consumers are trying to cut down on,” which is pushing snack sales in the salty category, says Seifer.

At VERC Enterprises, Vercollone tries to focus on variety and new items, though she’s especially apt to introduce a line extension from a known brand.

“When you have a vendor you have never heard of, you try to gauge it against how similar products have done,” she says.

Another trend a­ffecting the assortment on store shelves is health—even within traditionally indulgent snack categories.

“You can’t get away from the fact that salty-snack companies are trying to make their products more healthy,” including chips made from kale, beans or lentils, says Tom Vierhile, director of Datamonitor, New York. Other snack production techniques make some products, such as puffed snacks, seem a little less guilt-inducing.

Trail mix also seems to be coming out of the woodwork, from legacy companies and new players, Vierhile says. This fall, Hershey is introducing candy-nut-pretzel mixes, as well as snack bites in single-serve tube packs, at c-stores.

SnakClub products are the big hit this year at Clyde’s Markets, a 43-store chain based in Glennville, Ga. The stores sell SnakClub nuts and trail mixes in hanging bags costing 99 cents to $3.49.

“Nontraditional items are doing well,” says A.J. Gambino, director of marketing operations. “Shopping habits are changing because people are eating healthier.” He’s seen a 20% jump in trail-mix products since he began putting trail-mix shippers on the floor.

These products are the in-between, says Vierhile: “They have just enough indulgence, and because they mix in nuts and other healthy ingredients, people can feel good about eating them.”

CONTINUED: Candy Seeks Evolution

Candy Seeks Evolution

As consumers balance health with indulgence and manufacturers battle the commodity crunch, the candy category is ­finding bright spots through smart merchandising and creative product development.

King-size candy is, well, king at convenience stores. This is because of price increases a year ago, says Vercollone, “and people are seeing value in king-size rather than regular.”

She places top-selling king-size items at the front counter to capitalize on impulse sales, but she believes that bites and minis are helping drive the sweets category, too.

But the chocolate industry’s growth is slowing down, says Mintel, which points out that nearly three-quarters of chocolate eaters consume it as a treat, “meaning marketing efforts will do well to convey the idea that their products are worthy of the enjoyment,” says food and drink analyst Beth Bloom in the February 2015 report “Chocolate Confectionery.”

Top sellers at Clyde’s are Reese’s Peanut Butter Cups and Snickers, both of which Gambino offers at two for $2.50.

“We’re eating into margins a bit, but we’re driving sales. We have to because we’re competing with the Dollar Generals and the mini Walmarts. You have to be competitive without giving everything away,” he says.

To drive candy sales, he’s putting the most popular candy bars on the front counter for incremental purchases. Earlier this year, he created a 4-foot section with candies for kids, which has been a big hit. It’s just before the chocolate section, he says, and features kid-friendly candies such as Laffy Taffy, Lemonheads and gums, all at a child-friendly height and price (15 cents to $1.99).

Another area of candy that’s doing well is hanging bags, says Boyington of Core-Mark: “And that is expected to continue with the addition of stand-up pouches. They fit the trend for consumers looking for bite-sized items that are consumed over time and can be shared.”

Overall, upscale and unusual products are driving innovation in the candy segment, says Vierhile.

“Everybody has Kind bar envy,” he says. “Everyone has clear packaging. We’re seeing more use of iconic health ingredients and letting the ingredients talk for themselves.”

He points to Dove’s line of real fruits dipped in dark chocolate, and Godiva’s blood-orange chocolate bar with pieces of crystallized orange.

“This is a big trend in chocolates—a multi-sensorial taste experience with crunchy or chewy ingredients,” he says.

CONTINUED: Brands Keep Baked Goods Strong

Brands Keep Baked Goods Strong

Bakery snacks were up nearly 19% in c-store dollar sales last year, according to IRI, and Clyde’s Markets feels the strength in those numbers. It sells a million Little Debbie baked items every year, or $790,000 worth of products, Gambino says.

Baked goods in Clyde’s Markets have their own section near the coffee area, and Gambino has worked closely with Little Debbie for merchandising support. The manufacturer provided a 3-foot wraparound section for each store.

“We can move it near the coffee or the front of the store as needed,” he says. “It almost creates an impulse purchase because it’s always kept well stocked. We’ve learned if you’re stocked up, the consumer will engage it.”

This year Stinker Stores will debut a new upscale line from Little Debbie called Coffee House Café. “We are optimistic that it will go well because customers like to try new things,” says Watts.

The big trend Vierhile’s seeing is in brownies, and IRI data supports his inclination: Sales of brownies and cupcakes were up 12% for the year ending May 17.

“Brownies are indulgent but not too indulgent,” he says. “They’re sort of an alternative to a snack bar, especially if they have some better-for-you ingredients.”

Thanks to the excitement created by the now-infamous Cronut, consumers are looking for new experiences and tastes from their baked goods, according to Packaged Facts, Rockville, Md. Even Hostess, in its return to c-store shelves, is bringing new flavors to the category, including a red-velvet cupcake.

CONTINUED: Popcorn's On Fire

Popcorn's On Fire

If you’re seeking innovation, look no further than the popcorn category.

The compound annual growth rate of popcorn in 2014 was 6.1%, or almost double the rate of growth of the overall snack market (3.6%), says Vierhile.

Sales of ready-to-eat popcorn grew by 12% in c-stores last year, according to Nielsen, and that’s largely because smaller  producers are bringing out interesting flavors, says Centric Brand Anthropology’s Paschel. “Popcorn is the holy trifecta: It’s healthy or perceived as healthy, it’s indulgent and there are new, contemporary ­ avors,” he says.

And the new companies are revitalizing this category. Young brands are releasing unusual flavors (think sriracha, or pineapple-habanero) and specialty items such as drizzled popcorn, while more established companies such as Popcorn, Indiana are introducing iterations such as popcorn chips and granola popcorn.

“C-stores are probably the largest next opportunity for us because they’re starting to cater to a younger audience, a millennial audience,” says Joe Driscoll, vice president of marketing for Angie’s BoomChickaPop, North Mankato, Minn.

The brand is already in Holiday Stationstores, Sheetz, Erickson Oil, Atlas Oil and RaceTrac, and the company plans to roll the product out to more retailers soon.

Will Weaver, CEO of Englewood, N.J.-based Popcorn, Indiana, recommends that c-stores merchandise its product in the warehouse-snack set or a healthy category. All of its convenience store-size bags are also peggable, and smaller immediate-consumption bags are available in displayable caddies.

New popcorn flavors are certainly an enticement to customers, says Vercollone, but “the flavors that will always sell are salted and white cheddar.”

She merchandises all popcorn—even the sweet flavors—in the salty section, “because people shop by what they want, so keeping it together is best.”

Boyington of Core-Mark has one word of caution, though: “Everybody’s raving about the growth of popcorn, but that is from a small base, and sales per SKU are still low in comparison to other salty snacks. It belongs in the set, but be careful not to over-SKU the category.”

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