Product innovation and new flavors bring more growth to the salty snacks category.
By Sarah Hamaker
Americans can’t get enough of their salty snacks and sales of the category in convenience stores have accelerated in recent years as a result. “The category has been really strong,” said Jim Tidwell, director of merchandising for Super Stops and Minit Markets, in southern Arizona. “Specifically in 2012, we saw a lot of growth.” Vicki Jackson, marketing manager for Russell’s Convenience, in Lakewood, Colorado, agreed. “Salty snacks is actually one of the areas we’re up in, and that’s because the introduction of some new products.”
More recently, NACS CSX data shows steady growth, averaging 45.87% gross margin from November 2012 to April 2013. Increasingly, consumers are turning to convenience stores for their salty snacks. “It’s a plus category for us,” said Steve Grover, category manager with Xtra Mart in North Grosvernor Dale, Connecticut. “Our sales growth in salty snacks has been driven by nuts and other new products.”
IRRESISTIBLE SALTINESS
As one of the most diverse categories in the consumer packaged goods industry, salty snacks continue to be a popular impulse category for convenience stores. “Shoppers most frequently buy products from this category to be eaten as an afternoon snack, followed by a lunch accompaniment and evening snack,” said Kelly Fulford, senior category development manager for General Mills Convenience.
Aloha Petroleum Ltd. in Honolulu places its salty snacks in multiple locations, including cooler doors. “[Our] remodeled stores have shelving built into the sales counters to help encourage impulse purchases, such as salty snacks,” said Lisa DeCoito, merchandise buyer for the company’s Aloha Island Mart c-stores.
“We position our products based on consumer demand,” said John Dean, senior director of sales for the convenience store channel at Frito-Lay North America. “Because our products are highly impulsive, we position ourselves at key shopper destinations such as the cold vault, register, foodservice, coffee and fountain.”
Russell’s Convenience merchandises salty snacks at the front checkout, in line and on clip strips and “in different places around the store, like next to the fountain machine or fresh-sandwich cooler,” said Jackson, adding that the placement has helped sales.
“A beverage is one of the most popular salty snack purchase companions,” said Lisa Costigan, business unit manager-convenience for Kellogg Food Away From Home. “This presents opportunities to merchandise salty snacks near the beverage cooler or to offer bundling deals.”
Super Stops and Minit Markets also position their salty snacks in the highest traffic areas, such as the point of purchase and fountain beverages. But Xtra Mart has taken a slightly different approach by keeping all salty snacks together in the same aisle. “Our stores aren’t super huge, so people see that section easily,” said Grover.
FEEL-BETTER CHOICES
Health continues to play a role in consumer food choices, and the salty snack category has evolved to include more better-for-you options. For example, 63% of consumers want products without trans fat, older consumers gravitate toward the low-fat or no-fat claims, and younger customers are drawn to whole grain, all natural and gluten-free products, according to Mintel.
“Today’s consumers want options that allow them to feel better about their choices, including items that are low-fat or baked (not fried), or rich in whole grains,” said Michelle DeLameilleure, global consumer insights senior manager for General Mills Convenience.
Newer products in healthy salty snacks are driving sales, said Jackson from Russell’s. “Popchips and Special K Chips are a big category for us,” she pointed out.
Xtra Mart is currently looking at its healthy salty snacks section with an eye on changing it. “We definitely want to add more of those items because the customer wants those products,” said Grover.
But not every retailer is excited about the better-for-you salty snack segment. Growth has been slow for Super Stops and Minit Markets. “There’s still demand but it’s small,” said Tidwell. “It’s hard to dedicate very much space because healthy salty snacks are not a large percentage of the overall salty snack mix.”
THE KING LIVES
Within salty snacks, potato chips reign supreme. According to Nielsen, potato chips are the largest subcategory of salty snacks, accounting for $1.3 billion in sales in 2012, up 8.2% from 2011.
Grover has seen single-digit growth in potato chips at Xtra Mart locations, while Super Stops and Minit Markets have registered modest growth in that same segment. For Jackson at Russell’s, potato chip sales have “run pretty flat year-over-year,” but newer products like kettle chips are adding interest.
Retailers say the brands are helping potato chips stay on top by coming out with new flavors. “Introducing new flavors from popular brands helps keep our product lines fresh and minimizes consumer flavor fatigue,” said Costigan with Kellogg Food Away From Home.
POPPING AND TWISTING
Popcorn has inched up to share the number-two slot with tortilla chips, Mintel reported. Popcorn captured 9.2% of salty snack sales last year.
“We have found midlife consumers purchase the largest share of popcorn,” said Dean with Frito-Lay. “Popcorn provides these consumers with a fun, tasty and often nostalgic snack, particularly for brands like Cracker Jack and Smartfood Selects.”
“This is also driven by the better-for-you trend,” said DeLameilleure. “People want healthy options that taste good and popcorn has a healthy halo.”
Part of popcorn’s appeal is its all-American feel. “From its Meso/South American roots many centuries ago to the present time, peoples of the American continents have popped corn,” said Tim Bradley, COO of Open Road Snacks (formerly known as Rocky Mountain Popcorn). “Recently, it seems snackers in the United States have rediscovered popcorn and have gravitated to it.”
In contrast, the pretzel segment, once on the upswing, has grown stale, posting the smallest sales growth in salty snacks, according to Mintel. “We didn’t increase any space for pretzels,” reported Tidwell at Super Stops and Minit Markets, “but [we] are looking for any innovations that might give us stronger sales,” he said.
Russell’s has also slashed space for pretzels in recent years, downsizing from an entire shelf to one or two facings.
NUTS, SEEDS SPROUT UP
The perceived health value of nuts and seeds has given this subcategory a boost. “A lot of people are steering their health to seeds and nuts,” said Neal Stewart, director of brand marketing for Thanasi Foods.
Driving the uptick in sales is a view of nuts and seeds as more substantial snacks. “As consumer consumption continues to shift from sit-down meals to on-the-go, snacks like nuts and seeds provide consumers with both satiety and fuel,” said Dean.
“More consumers are looking at the health benefits of nuts and are using those products as a snack instead of chips,” said Jackson.
Super Stops and Minit Markets have experienced growth in almonds. “The demand for almonds with the new flavored offerings has been up,” said Tidwell. “Frankly, corn snacks, nuts and seeds are undergoing a renaissance of taste, satisfaction, quality and flavor,” said Bradley of Open Road Snacks.
Innovations, such as new flavors and combinations, are pushing sales of nuts and seeds up. And the growth spurt of nuts and seeds seem to be partially attributed to interest from younger consumers, according to Grover.
Larger, resealable bags of seeds, such as sunflower seeds, have spurred sales of those products as well. “A larger bag satisfies a longer snacking occasion, such as a road trip or a baseball game,” said Stewart.
FLAVOR ME SPICY
Trends in salty snacks focus mostly on flavor improvements. “Extreme or bold flavors, such as Hot Buffalo Bugles and Chex Mix Hot ‘n Spicy, continue to be popular,” said Fulford.
“We believe flavor trends are changing, reflecting both the changing tastes of the consumer, many of whom are seeking a different snacking experience” concurred Dean with Frito-Lay. “We also believe that changing flavor trends reflects the increasing diversity in our country.”
While new flavors can advance sales, Jackson said the standards are the ones that bring in the customers day in and day out. “You might see a spike when a new flavor hits the shelves, but customers revert back to the old standbys,” she said.
Aloha’s DeCoito also found that items with bold and spicy flavors “do an average amount of sales,” she said. “There’s no sales lift that stands out.” Grover agreed. “Everybody’s got bold and spicy, but the basic flavors are still popular and the best-sellers.” However, he views the new flavors as appealing more to younger consumers.
That’s something Stewart with Thanasi has seen, too. “The young adult consumer is starting to shop at convenience stores, and they are used to customizing their flavors or having a choice among lots of flavors.”
A SALTY FUTURE
Salty snacks should remain a top selling category for years to come, these brands and retailers say. “Salty snacks are already the number-one food category in c-stores,” said Fulford. “With new product innovation coupled with strong core brands, we expect this key category will only continue to deliver strong sales and profitability.”
DeCoito pointed out that “salty snacks will always do well due to the numerous amounts of innovative products and flavors introduced.”
By pairing salty snacks with other convenience store items, such as beverages and foodservice, the category has even more opportunity to grow. “With initiatives like better-for-you snacking alternatives, fresh and foodservice product tie-ins, and other creative approaches, we project salty snack growth to continue to be strong and pick up steam in the coming years,” concluded Bradley.
Sarah Hamaker is a NACS Magazine and NACS Daily contributing writer. Visit her online at sarahhamaker.com.