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The Skinny on Snacks

A number of trends are impacting the sweet, salty and alternative snack segments

by Lisa White

No matter what the snack category, be it sweet, salty or alternative, snacks are big business for today’s convenience stores.

This is because busy schedules have made snacking a more routine activity in many consumers’ lives, according to Technomics 2007 Snacking Category Report. The recent report, which presents findings from an online survey of more than 1,500 consumers who say they regularly snack between meals, found that nearly half or 47 percent of consumers said they snack because they are hungry but don’t have time for a full meal.

Other driving factors for snacking include enjoying a snack while participating in certain activities, snacking between meals, snacking instead of eating full meals and snacking to stave off boredom, according to the report.

C-stores are in a prime position to cater to all of these snacker types. According to Regina DeMars, director, product publicity at ConAgra Foods, headquartered in Omaha, NE, 54 percent of primary household shoppers visit a convenience store weekly, which makes it the only sector across food, drug and mass retailing to draw more than half of all U.S. shoppers on a weekly basis.

Many suppliers agree that the emphasis on this category is healthy. With the rising rate of obesity in this country, and the focus on fitness, this may come as no surprise to many.

But what is amazing is how innovative snack foods have become to accommodate this growing trend. Evidence of this is Frito-Lay, creator of Doritos and Cheetos, who recently launched Flat Earth, snacks with half a serving of fruits and vegetables per ounce. In the last year, research group Mintel reported 45 veggie snack rollouts like this over the last year alone.

According to USA Today, with parents' obesity concerns a key driver, dehydrated fruits and veggies now are popping up in places few chip-loving kids would expect.

DeMars says, "The healthy snack segment continues to experience new growth year after year. In fact, Information Resources reported that sales of packaged snack foods in the United States topped $30 billion in 2005, up 6 percent over 2001 sales. Health-oriented items have been experiencing the steepest growth in the category," she says.

MarKan Sales, a distributor in Marysville, KS, has begun working with schools that are looking to incorporate healthier snacks. Purchaser Jessica Miller says the company researched the fat and sugar content as well as calories on the items it already carried and segregated the snacks that had 5 g of fat or less and 12 g of sugar per 100 calories. Peanuts were the only exception to the rule due to this food’s healthy profile. "We had a good selection of candy bars, beef jerky, chips, peanuts and bagged snacks," she says.

Another testament to the growth of healthy snacks is a recent report in USA Today that stated growth in the $24.3 billion salty snack segment has slowed, except in two categories: better-for-you and flavored.

Trends and product launches
The rollouts of healthier snacks, and the removal of trans fat from many products, has had a big impact on this segment.

"The healthy trend is still gaining momentum, especially with many new school initiatives [that promote healthier snacking]," says Chris Tamillo, national sales manager at sunflower seed supplier Spitz International in Centerville, OH. He says rather than offering five or six brands of the same product, c-store retailers would be better served by varying flavors, not only brands. "We see a lot of sets with multiple facings of one flavor in many different brands. Sets that offer more flavor options tend to do better in total sales. This can lead to a slower selling SKU individually, but total category sales have increased by appealing to more consumers. Fine-tuning this balance is the key. This helps the category stay fresh and appealing, keeping consumer interest high."

Spitz recently introduced two new flavors in its sunflower seed line—Chili Lime and Smoky BBQ. It will also be debuting a dill flavored pumpkin seed, capitalizing on the success of its dill sunflower seed.

"Today’s consumers are more educated than years ago. Consequently, they are looking for more all natural, less challenging and user-friendly snacks," says Warren Wilson, president of The Snack Factory, based in Skillman, NJ. "We still have junk food snacks that contain MSG and fat, but the whole industry is changing to become trans fat-free. It’s cleaning up its act."

Two years ago, the company debuted its Pretzel Crisp line, which is a flat pretzel that can function as a cracker. Along with Original, Garlic and Everything, The Snack Factory has added a Honey Mustard & Onion flavor.

Jeff Blalock, vice president, convenience stores at Flowers Foods Specialty Group in Tucker, GA, concurs that healthy snacks have been receiving the biggest buzz. This snack cake supplier has risen to the challenge, reformulating its entire line of snack cakes and pastries to remove the trans fat.

"In our R&D efforts, we are working with new ingredients and formulas that we hope will yield new, healthier snack cake options down the road. What’s important to remember is that snack cakes sell mostly on taste. If it doesn’t taste good, consumers won’t buy it—no matter how healthy it is. So that’s the real challenge," he says. Last year, Flowers Foods introduced Mrs. Freshley’s SnackAway, a snack cake line with reduced fat, less sugar and more fiber.

This year, the company will launch new whole grain cereal bars under the Blue Bird brand. Flowers Foods also will be expanding its Mrs. Freshley’s SnackAway line with chocolate cupcakes and peanut butter bars, which will be trans fat-free.

Larry Roth, national sales manager at Clayton, OH-based Ol’ Smokehaus, says the popularity of healthier snacks is a residual affect of Americans’ health concerns and trendy diets, like Atkins and South Beach. As for products like meat snacks, he says the market is well educated about the benefits. "And that’s why we’re experiencing growth, even though some other [snack food] categories are down," he says.

Last year, Ol’ Smokhaus introduced two for $1 kippered steak rounds that address two trends—portability and portion control.

Another meat snack supplier, Highland Beef Farms in Reston, VA, is seeing increasing interest in its turkey lines, says president Jay Hersch. "Although people prefer beef sticks, there is still fat in the sausage. That is why our turkey line is accepted as a viable alternative," he says.

Still, he says, the shift toward healthier snacks has not affected consumers’ need for flavorful, satisfying products.

In addition to healthier products, there are a number of other trends that stand out in the sweet, salty and alternative snack food sector. One of the newest and most prevalent is co-branding and licensing. Meat snack supplier Monogram Meat Snacks in Sioux Falls, SD, is addressing this popularity by rolling out a new licensing deal with Team Real Tree, an outdoor company that sells camouflage, in addition to offering Jeff Foxworthy beef jerky.

According to Bill Schneider, vice president and general manager of Monogram Meat Snacks North, the company also is introducing a new NASCAR summer sausage in 5-oz. chubs for c-stores. "We’ll sell them in a NASCAR cardboard caddy that fits 18 pieces, which can be sold by the cash register," he says.

Food giant ConAgra Foods also is a snack licensee, with the addition of its Harley-Davidson beef jerky.

Justin Havlick, president at Thanasi Foods, located in Boulder, CO, says the flattening of the alternative snack segment is putting more emphasis on branded products. "Consumers are more sensitive to the quality attributes of alternative snacks and the connection of brands that they trust," he says.

For this reason, the company has partnered with Franks hot sauce, which helped make Buffalo wings popular back in 1962, to offer Franks Red Hot Beef Jerky. This product also is addressing another popular trend in this snack segment—hot and spicy.

These flavors cater to the growing Hispanic population. "The influence of Hispanics in the marketplace is one reason we introduced spicy and hot peanuts," says Tom Foster, who oversees new business development at Beer Nuts in its Vernon Hills, IL, location. The company also launched Bar Mix in a bag geared for c-stores.

"On-the-go hot food offerings also are a key trend in increasing the growth and sales of c-stores," says DeMars. "We’re seeing a real growth in on-the-go convenience items."

ConAgra has launched new products in this category, such as The Max Pizza Quesadilla; MaxStix; and Healthy Choice Cinnamon Bakes. New snack food additions to its lineup include Slim Jim Monster Sticks; Orville Redenbacher’s Smart Pop! Mini-Bags; Andy Capp’s Steak Fries; DAVID Seeds Dill Flavor and Jumbo size; and Hunt’s Snack Pack SpooNibbles.

Snacks that combine savory and sweet flavors also are growing in popularity, reports Christopher Clark, vice president, operations and membership for the Arlington, VA-based Snack Food Association. "In the past, it has been either sweet or savory," he says.

Food giant General Mills, based in Minneapolis, MN, has addressed this growing popularity with the launch of Nature Valley Sweet & Salty Bars, Chocolate Chex Mix in Turtle and Peanut Butter and Sweet & Salty Bugles in Caramel. "We’ve had a great consumer response with these sweet and salty snacks," says Claudia Castillo, associate marketing manager for Minneapolis, MN-based General Mills’ Convenient Solutions Team.

Packaging and marketing
Snack food packaging has become somewhat of a mixed bag. Both larger and smaller single-serve sizes have been dominating c-store shelves, say suppliers.

"C-store packaging sizes are moving up and rings are getting larger," says Foster. "At one time, we would sell 1-oz. bags like most salty snack manufacturers, but now we sell our Beer can, which is 7-ozs. as well as a 5-oz. bag. Clearly consumers are looking for larger items and retailers want a higher ring."

Havlick at Thanasi Foods also notices growth in the larger packaging sizes, attributing this to more consumers who are looking for a greater value. "We will continue to see a trend in upsizing, rather than downsizing," he says.

Still, others say that the smaller sizes are more convenient for on-the-go consumers. "Convenience stores have shifted their focus and now serve busy consumers with a variety of hand-held food," says DeMars at ConAgra Foods. "No longer do shoppers simply stop in, fill up the car and purchase the odd item or two they forgot to pick up at the grocery store. In fact, portable snacks are playing a larger role in convenience stores as operators recognize that more than half of primary household shoppers visit a convenience store weekly."

Consequently, some suppliers are offering smaller sized snacks that can be eaten on the run. Roth notes the popularity of Ol’ Smokehaus’ single-serving packages in _-, 1- and 2-oz. sizes.

The Snack Factory’s Wilson says many c-stores like to have a 99-cent trial product as well as the same snack in a higher priced and larger version that offers a higher ring. For this reason, the company offers products that are half the size of its regular product.

Along with smaller-sized snacks, packaging that is multi-functional helps cater to the on-the-go consumer. For example, Spitz offers a disposable spittoon with its sunflower seeds as part of the package. "It is a complete kit that targets this on-the-go segment," says Tamillo.

Still, probably the most important aspect of a package on a c-store shelf is to catch the eye of the consumer. For this reason, brighter colors, enticing graphics and innovative designs are key.

"Shelf-stopping packaging with eye-catching design and product attribute call-outs have been an increasing trend in an environment where taste and flavor offering have become more key to product choice," Castillo says.

This is especially the case with impulse items. "Packaging is very important to snack cakes. These products are impulse items and it’s most often the packaging that grabs the consumer’s attention," Blalock says. Flowers Foods uses bold colors, appetizing product shots and clearly stated health attributes, such as zero trans fat or whole grain, on its packaging.

As far as up-and-coming packaging trends, Blalock predicts the use of more packaging using recycled materials. As part of Flowers Foods’ sustainability initiative, which was formally launched in 2006, all of its multi-pack boxes for snack cakes are now made with 100 percent recycled paperboard.

In the coming years, manufacturers predict the sweet, salty and alternative snack segments will remain strong for c-stores. "With consumer snacking occasions becoming more frequent, convenience store retailers have an opportunity to capture more shopping occasions and increase sales per transaction," Castillo says. "In addition, adding more variety within fewer brands can simplify the customer’s shopping experience."

Havlick agrees. "We will see more lift on a per SKU basis versus having a larger variety in stores," he says.

Lisa White is a food industry writer based in Cary, IL.

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