CHICAGO — Retailers’ familiar 80/20 rule—where 80% of category sales flow from 20% of the top brands—was thrown a curve ball in 2021, when supply chain issues put retailers in a bind.
For many, it was a short-term bind as fulfillment issues begat placement opportunities for smaller packaged-snack brands—quality products that, previously, had difficulty securing shelf space. The resulting good “dilemma” is this: As smaller brands discover new loyal consumers, earning the products a permanent spot in retails’ plan-o-grams, category managers find themselves managing a rebalancing act in 2022.
“We had issues with fulfillment, mainly with meat sticks,” says Kelley Gutierrez, senior category manager of candy and snacks, center store, for Franklin, Tenn.-based MAPCO Express. “But we were able to identify replacement brands. I think it will be interesting to watch what shakes out as brands like No Man’s Land Beef Jerky, (Boise City, Okla.), and Mighty Sparks, (Minneapolis), made their presence felt.”
Gutierrez, who also saw medium to large brands Country Archer, Jack Link’s and Old Trapper fill out the meat-snack supply chain void, says Mighty Spark found a home in MAPCO Express jerky sets because not only were the products “available” but also offered relevance. “The brand appeals to all demographics, including females. The brand is very philanthropic as it gives profits back to causes. And the packages are eye-catching,” Gutierrez says.
Other c-store packaged-snack category managers echo Gutierrez’s sentiments about smaller brands stepping up. Peter Kempton Jr., category manager, center store, for TravelCenters of America, Westlake, Ohio, says its three retail brands—TA, TA Express and Petro Stopping Center—all showcased jerky brands “that would not have otherwise gotten a chance.”
At a “critical time, and with a lot of holes and empty spots to fill, we pivoted to other brands, and they proved themselves after we battled getting core SKUs from big brands,” says Kempton, adding that when one major salty-snack brand was out of stock, TA brought in Herr’s to great reception.
Similarly, Tim Young, category manager, center store, for FiveStar, an 80-store chain owned by Newcomb Oil Co., Bardstown, Ky., says, “Every week we had to decide when to pull out” certain larger brand commitments due to supply issues. “We were able to recover thanks to smaller brands like Quest Chips, Protein Poppers, Pap’s Beef Jerky and Wenzel Farms; all stepped up for us through our Core-Mark distributor.”
Another fledgling snack brand that propped up FiveStar’s dollar and unit sales was Alani NU energy bars. “We created a floor display that did extremely well,” he says. “It had a 75% take rate on two-for deals, and made its way into our top 15 SKUs for the entire year, and did so going up against Kind and Clif.”
The dilemma going forward, though, is this: “As soon as you make the change, and once those larger brands come back in stock, what do you do? I know that we opted to stick with Wenzel’s and Pap’s within sets because they filled a need at a critical time.”
Meanwhile, snack sales thrived thanks to several consumer need-state fulfillment strategies for hot/spicy options, sweet snacks and package-size flexibility.
For meat snacks, larger packs have grown considerably, says Gutierrez, citing velocity for 8-ounce packages and up for consumers in stock-up mode. “We saw significant growth with meat sticks, emphasizing the sales of multiples within peg-bag sets where an 18-stick package really drove value,” she says, adding that MAPCO Express space for jerky increased with greater commitment with secondary placement spots such as countertops and queue line.
Flavor expansion and cross-merchandising also served as impulse sales triggers. “We’ve seen salty and meat snacks as a compatible cross over [people buying one with the other]—and it’s driven by a younger demographic.
“Flavors are far more exciting, too, than 10 years ago thanks to new brands like Takis [from Royal Foods]. It’s brought excitement to the category, and so has spicy and exotic meat snacks. You’ll always be able to rely on the tried and true original and teriyaki flavors to drive 80% of sales, but you need a place for the Carolina fuego and ghost peppers to bring in incremental sales.”
Young says stores benefited from people avoiding QSRs at the height of the pandemic, migrating to FiveStar and staying loyal to it. “Customers would sample our food and become hooked long-term, and snacks benefited along with this, including sweet snacks with hot dispensed drinks,” says Young, whose chain’s loyalty program amassed 95,000 registered users, many activating it for snack purchases. “People are seeking comfort foods, and if you’re talking snacks, then brands like Little Debbie and Hostess got a lot of lift.”
TA’s Kempton says even significant price increases affecting beef and meat products didn’t put a drag on sales, citing the segment as having good “price elasticity” in the eyes of customers.
In benchmarking against Chicago-based IRI’s end-of-year 2021 data showing the consolidated package snacks category in c-stores growing at 15.2%, MAPCO has exceeded that performance, says Gutierrez, without going into specifics. “We’ll be focusing on bigger pack types during summer holidays, like July Fourth,” she says. “We saw an increase in social interaction in ’21 that helped drive take-home business within salty snacks [for get-togethers]. Our guests came to us and understood that our price points were competitive with grocery, mass and drug. We learned during the pandemic that consumers continue to recognize convenience as a prime channel to fulfill their packaged snack needs.”
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