By Howard Riell, Associate Editor
Meat snacks—particularly jerky—continue to win a special place in consumers’ hearts—not just for the highly portable protein they provide, but also for their exotic flavors and ingredients, engaging promotions and product innovation.
Brands like Jack Link’s, Frito Lay, Oh Boy! Oberto, Tillamook and others are notching major sales gains by meeting the demand of c-store customers.
For the 52 weeks ended Oct. 25, 2014, meat snack sales in U.S. convenience stores totaled nearly $1.3 billion, an increase of 9%, compared with the same period last year, according to Nielsen, a research firm that provides detailed food-purchase information. Unit volume for the same period rose 5.1%.
Chicago-based market research firm Mintel indicates Millennials are a strong driver of meat snack sales, with 37% of 18-34 year olds purchasing products in this segment, compared with 29% among consumers overall.
“The segment benefits from a perception of health that comes from being a relatively low carbohydrate offering,” the report stated. “The segment may struggle due to the fact that its products fall into a relatively high price point, when compared to other segments, such as potato chips and pretzels. As such, product price promotion may be a means of boosting sales further.”
Beverage Marketing Corp. (BMC), a New York-based research and consulting firm, noted in its most recent look at the segment that beef jerky and other dried meat snacks may have been one of the snack food segments hardest hit by the economic downturn of the late 2000s. “But they made a powerful comeback,” added editorial director John Rodwan, Jr.
Made with relatively pricey ingredients to begin with, BMC noted, these products appear to have struggled to compete with less-expensive snack alternatives.
DO THE JERK
As meat snack sales go, jerky is tough to beat.
“Jerky certainly seems like a category that is just exploding,” noted David Walsh, manager of marketing and member services for the Snack Food Association (SFA) of Arlington, Va. “I really think the need for high-protein snacks is one reason. People are looking for that protein. Also, a trend that we have really heard a lot about is on-the-go snacking, so it’s a way to get protein while driving.” Indeed, he called c-stores the single most important retail channel for meat snacks.
“We are experiencing tremendous growth for 2014, thankfully,” said Danna Huskey, category manager for E-Z Mart, based in Texarkana, Texas. “After declining in sales and unit movement in 2013, we are up 13% in sales and 17% in unit movement through the third quarter. Sticks are on fire this year. Plus, with the limited funds of consumers these are the more affordable options, and the items we’ve promoted the most during 2014.”
E-Z Mart operates more than 300 stores in Arkansas, Louisiana, Oklahoma and Texas.
Interestingly, Huskey said, she has not seen tremendous innovation in the segment.
“The items that have been launched don’t seem to stick around too long,” Huskey said. “They cannot seem to penetrate through the top-sellers’ circle in the category. The tried-and-true flavors are still the top sellers.”
The opportunity to bundle offerings is also helping drive sales.
“A lot of the beverage companies are starting to get on board with partnering with some of the meat snack companies,” reported Hilary Freedman, senior category manager-snacks and candy for Atlanta-based RaceTrac Petroleum. “I think that long term there is a lot of opportunity there. You’ve seen in the past the big guys—Coke and Red Bull—come to the table offering to partner with some of the suppliers. Nothing has been ironed out as far as 2015 partnerships, but when you have a big beverage name alongside some of the big snack companies it really helps grab the attention of the consumer.”
RaceTrac plans to continue to partner with the larger vendors in this category, leverage some of its beverage relationships and continue to fuel growth in what they recognize as a high-margin category, Freedman said. She also acknowledged the shifting demographics of the meat snack consumer.
“Meat snacks in the past really were geared more toward the male consumer. We have seen more innovation in the packaging, trying to cater to a wider demographic,” Freedman said.
RaceTrac, Convenience Store Decisions’ 2014 Chain of the Year, is ensuring its offering set reflects the innovation and that variety consumers want, like turkey products.
“We want to keep opening the door to more consumers who may not have been interested in the category initially,” Freedman said.
Jerky continues to fuel growth among meat snacks, Freedman continued. “I think last year was the first year that the jerky segment outpaced sticks in dollar volume, so it’s an exciting trend. Obviously, everybody is after more protein, and we continue to see that pop up on pretty much every snack offering available at this time.”
Matched with consumers’ unceasing demand for on-the-go snacking, she added, jerky is well positioned.
“It really meets those components because it offers a snack with high protein, and it’s an (easily handled) product,” Freedman said.
RaceTrac is looking at exotic new flavors that are meeting with success, like Jack Link’s Kung Pao and Chile Lime flavor profiles. “You’ve also seen innovation in different kinds—turkey, pork or even chicken products,” Freedman said, adding that she expects to see more chicken items hitting store shelves in the months ahead. “They’re just continuing to offer diverse flavor profiles and diverse alternative proteins for people who consume beef.”
Nachhattar Chandi, president and CEO of Chandi Group, USA, based in Indio, Calif., which owns and operates 17 Arco ampm locations, said he advises colleagues to stay innovative with new products and top brands.
“The category has its loyal customers,” Chandi said. “At the same time, new flavors attract new customers who want to try the products. A good price point is also critical for the category.”
In the markets the Chandi Group serves, customers are 80% Hispanic and between the ages of 25 and 55, he reported. The most popular new products at his stores are usually the best-selling flavors from the top brands, notably Slim Jim and Jack Link’s. “Frito Lay will be introducing a new product in 2015,” he added.
The category receives roughly 5% of display space in his stores, Chandi explained, located in high-visibility areas such as the counter area and across from the cooler. The plan is to continue to bring in new products, beef up impulse sections and cross-merchandise.
“The hot new brand is Krave, which comes in a single-serve size,” said Lara Bowman, the manager of University Market, a convenience store located on the campus of Oregon’s Portland State University. The brand’s upscale flavors include Cabernet Rosemary, Chardonnay Thyme, Cabernet Balsamic Blackberry (with Clos du Bois for holidays), Sesame Ginger, Black Cherry Barbecue, Honey Peach Barbecue, Grilled Sweet Teriyaki and others.
“Krave is going after a younger, hipper market—and it is working,” said Bowman. “The softer jerky with modern flavors and meats are a big favorite with the Millennials.” She has found that keeping the back stock just behind the product on the shelf for continuous filling works great for keeping the product going out the door when it comes to the traditional jerky and meat sticks. “I keep the Krave Jerky on a spindle featuring both single- and multi serve packages near the protein bars. It really sells the products.”
University Market’s customers vary by meat snack brand.
“Jack Link’s is traditional looking and has a high male-of-all-ages (customer base),” Bowman said. “The Turkey Jack Link’s is a crossover to reach women, and does sell really well. Tillamook is a sausage, and is a favorite because it’s a hometown local item. Tillamook beef sticks invoke childhood memories: selling meat sticks door to door in Oregon as fundraisers for little league and other organizations.”
SFA’s Walsh said that Perky Jerky generated a lot of buzz in 2014. “It’s a jerky snack but also infused with some kind of energy type ingredients.” The product is an all-natural, ultra-premium jerky that includes guarana and is billed as low calorie, low/no fat, low carb, with no preservatives.
Not everyone is convinced, however, that energy-infused meat snacks are necessarily the next big thing. For example, “we are not looking to add energy-sprinkled foods to our meat snack set at this time,” said E-Z Mart’s Huskey.
Despite the introduction of even more flavors and versions, meat snacks are chock full of sales at the core.