Salty Snacks Make for Sweet Sales

U.S. Potato Chip Sales in Conveniece Stores
BrandDollar SalesUnit Sales
Lays Potato Chips$134,799,200118,439,400
Ruffles Potato Chips$66,052,77050,400,370
Pringles Potato Chips$49,686,48033,452,710
Lays Kettle Cooked Chips$16,943,23012,468,950
Baked Lays Potato Chips$13,905,45012,278,340
Wavy Lays Potato Chips$12,319,6405,579,530
Utz Potato Chips$11,325,4809,010,104
Cape Cod Potato Chips$11,185,15010,090,260
Herr’s Potato Chips$10,728,7707,791,194
Middleswarth Potato Chips$9,260,6636,618,196
Source: Information Resources Inc. (IRI), Year-to-Date Ending Aug. 1

U.S. Cheese Snacks Sales in Convenience Stores
Brand$181,570,200157,310,100
Cheetos Cheese Snacks$170,559,800148,043,600
Toms Cheese Snacks$2,259,0742,289,438
Wise Cheez Doodles Cheese Snacks$1,260,5971,178,612
TGI Fridays Cheese Snack$1,019,329626,762
Herr’s Cheese Snacks$892,527817,812
Golden Flake Cheese Snacks$606,876545,031
Utz Cheese Snacks$421,345282,654
Baked Cheetos Cheese Snacks$389,750110,460
Cheetos Natural Cheese Snacks$247,265210,859
Bachman Jax Cheese Snacks$9,260,6636,618,196
Source: Information Resources Inc. (IRI), Year-to-Date Ending Aug. 1

New flavors are the order of the day in the core salty snack category, and suppliers are ramping up pressure on retailers to bundle promotions. But while the long, hot days of summer may cause consumers to buy more snacks and drinks, many retailers are bypassing bundling in favor of single-item promotions.

Tim Grossi, category manager for Dash In Food Stores in LaPlata, Md., said he tried using bundled promotions several years ago at the 35-store chain but didn’t get much response.

“Bundled promotions are too confusing for customers and too much work to redeem,” Grossi said. “I like offering direct manufacturers’ coupons. Buy this and get 35 cents off—those are the most popular and the easiest for retailers. You send them to the clearinghouse, pay a percentage and get your money.”

On the other hand, Jared Sturtevant, director of category management for Nice N Easy Grocery Shoppes, an 81-store chain in Canastota, N.Y., said his company quite successfully bundles chips with subs and wraps in locations with its Easy Street Eatery foodservice program.

Sturtevant finds Frito Lay the most proactive when it comes to flavor launches. “To be quite honest, it’s very difficult to keep up with all the new flavors they have out at any given time,” he said. “A majority of the flavor profiles being launched are spicy—and recently lime is showing up in everything from beer to corn chips.”

Space Concerns

While consumers love to try new tastes and flavors, finding space for new products can sometimes be challenging, said Tim Cote, marketing director for Beaverton, Ore.-based Plaid Pantries Inc. “New product launches almost always do well, so basically we go to the numbers and drop the weakest performer,” he said. However, sometimes the right item to discontinue is a competing brand, not a product in the same portfolio.

Profit margin enters into the decision on which product to drop as well, Cote said. “For example, it’s difficult to make much money on Frito-Lay, so we’ve dumped some of their SKUs in order to bring in brands that are more profitable.”

Cote, who operates 101 stores, has done well with any salty snack from Kellogg’s and has great success with Uncle Ray’s and Poore Brothers.

Two factors often drive up the sales of salty in the summer, Cote pointed out: It’s easier to consume more salty when your fluid intake rises in hot weather, and people tend to avoid sweet snacks in hot weather because they get sticky and make a mess.

“People are out and about more, doing a lot more in the summer than in the winter and therefore getting more munchie attacks,” Dash In’s Grossi said in agreement with Cote. “But the price point for salty snacks is low enough that I expect consumers will continue buying them in the future as frequently as they are now. The majority of our salty snack sales are smaller packages, and in times of economic stress small package sizes do very well.”

Grossi finds his most successful strategy is definitely positioning. “We make more margin on the smaller sizes, so they’re the most prevalent. A lot of new products are hitting the hot category. Thanasi Foods’ Frank’s Red Hot snacks and Andy Capp’s Hot Fries are hotter than ever. As far as flavors, I know the dill pickle seeds really took off this year.”

Sturtevant said Doritos clearly lead his store’s salty category sales, with nacho flavor first and cool ranch a distant second. “We’ve found that ‘two-fors’ and ‘buy-one, get-one’ offers work very well on take-home packages,” he observed. “However, I expect salty snack sales will remain relatively flat. That’s where they’ve been, and I haven’t seen an item or marketing campaign that will change that trend yet.”

Grossi said he’s moving toward selling more into kettle chips, not to higher-end snacks like soy. “The bad-for-you stuff seems to be doing well now. Kettle-branded chips aren’t the healthiest product in the store, but they taste great.”

Dash In sells a lot of healthy snacks as well, but Grossi merchandises them more in the open-air cases with cheeses and fruits. “With salty snacks, I’m concentrating on what’s popular, not on health benefits,” he said. “I go out of my way to make it as healthy as possible without changing the flavor of the product because once you change the flavor profile you’re really producing another product.”

The popularity of flavor varieties hasn’t changed much over the past year in Cote’s market. “Salt and vinegar is still pretty strong around here, as is anything hot like jalapeno peppers,” Cote said.

Though he saw some increase in soy-based salty snack sales some months ago, Plaid Pantry started reducing the line along with sales of other premium snacks last April when the economy began to visibly tank.

“Now, people are less concerned with what’s good for them and more concerned with getting value for their dollars,” Cote said. “We’re seeing a definite move into lower price brands, and soy is a premium product.”

Cote also pointed out that the c-store industry has done a good job of getting customers to trade up to higher-end brands over the past four or five years. “The challenge now is catching up to customers on the way down and giving them the value brands they want,” he said.

The lower-price trend includes meat snacks, which are also showing extreme price sensitivity in Plaid Pantry’s market. “Two years ago, price wasn’t a consideration; now consumers are looking more to price than to brand,” Cote said. “Now, the big thing that distinguishes the difference between sales of different jerky brands is how deeply manufacturers promote their products.”

Plaid Pantry doesn’t include tie-ins in its numerous salty snack promotions but always has five or six salty snack lines on sale. The Kraft Planter’s items from which the company removed label pricing—all the nuts and seeds Kraft sells except for their tube products—have definitely suffered a volume loss at Plaid.

“Kraft really had no choice,” Cote said. “Pre-pricing works well in terms of predictable pricing, but that’s pretty much out the door right now.”

Since Cote dropped one pre-priced sunflower seed offering, other sunflower seeds have done relatively well. “Seeds still look like a real value because you can get so many in a package,” Cote said. “We think we’re seeing people moving out of cashews and peanuts and into sunflower seeds.”

 

 

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