Like other retail channels, the convenience store industry is witnessing a change in consumers’ snack choices. "We’re definitely seeing a shift to healthier snacks, but I think it’s a little slower than some of the other channels just because our customer base is still predominantly younger males who aren’t as much into healthier eating as are older shoppers," said Randy Adams, buyer for Carmi, Ill.-based Huck’s Food and Fuel stores.
Consumers’ growing desire for greater convenience and their perception of having less time these days are driving the snack food channel, according to a new report by Global Industry Analysts (GIA), which says that the line between meals and snacks is rapidly fading.
GIA expects strong dollar growth in the world meat snacks market, with the U.S. leading the way with a projected compound annual growth rate (CAGR) of 7.6% and a 4.5% increase in bakery snacks.
Another highly visible change in the snack market is the increasing presence of soy—which consumers perceive to be a healthful snack component—in both salty and sweet snacks.
C-stores remain the most viable outlet for packaged meat snacks. "We’re looking at double-digit growth in meat snacks last year and probably this year as well," Adams said. "We’ve worked to make sure we offer customers a good mix."
According to leading meat snack vendors, the convenience channel accounts for nearly 50% of category sales volume. When Adams reviewed the meat snack market, he quickly realized that Slim Jims dominated the stick business while Jack Links held sway in bag sales. "Our stick business is all Con-Agra and our bag business is completely Jack Links with the addition of a couple of Alberto items," he says, "and the two are almost even in receipts."
Adams noted that meat snacks are softer, sometimes shaped differently and available in more exotic flavor and seasoning combinations these days, providing something for every palate. A good example is the Old Wisconsin two-for-a-dollar unwrapped beef sticks sold from a bulk dispenser. "It’s one of our biggest unit sales items in the store, we’re going to expand and add a two-tier rack so we can sell a pepperoni stick as well," he said.
Both meat and soy-based snacks may soon start enjoying even larger market share if consumers react unfavorably to Frito-Lay’s recent decision to reduce the number of chips it puts in its popular snack products. The company is reducing package contents by approximately one ounce in response to soaring commodities’ prices and increased shipping costs.
Pepperidge Farm, Kraft and other major snack manufacturers are phasing out packaging stamped with suggested retail pricing for the same reasons, but also in response to retailer fears of being locked in to shrinking profit margins as wholesale costs continue to escalate. Retailers applauded this decision.
The snack and confectionery industry together have massive strength in the marketplace. The average American consumes at least four snacks a day, for a whopping total of more than 6.5 billion pounds of snack food annually.
Salty snacks account for just over half of total snack sales, but confectionery products are the third largest food category sold in the U.S., just behind carbonated beverages and milk. Sweet snack sales account for $7.8 billion and salty snacks for $7.2 billion annually in all major U.S. retail channels.