By Howard Riell, Contributing Editor
protein-packed snacks, and meat snack manufacturers are responding with new and varied flavors, from gourmet to bold.
To maximize sales, canny retailers are using promotions, packaging, consumer demographics and merchandising to make the most of impulse opportunities.
The meat snack offer is among the most straightforward in the store: a high-quality, satisfying product that is quick, convenient and low priced. The dried meat snack category as a whole saw convenience store sales rise to more than $15 billion for the 52-week period ending in September according to IRI, a Chicago-based market research firm. That’s an increase of 14.38% over the same period in 2014.
Jerky sales during the same period topped $689 mil- lion, a 13.5% rise compared to 2014, with brands, such as Jack Link’s, Old Trapper, Oh Boy! Oberto, Frito Lay and Tillamook, leading the way. Private-label sales reached nearly $19 million, with relatively modest growth of 2.82%.
Thomas Dempsey, chief executive officer of the Snack Food Association in Washington, D.C., pointed to its most recent “State of the Industry” report that shows year-to- year dollars sales of pork rinds rose 5.4% while meat snacks, both sticks and jerky were up 16.3% in dollar sales and 10.8% in unit sales, compared to last year.
“That market is dominated by Slim Jim and Jack Link’s,” Dempsey said.
Mainly, those brands pack a protein punch.
“Everyone is looking for higher protein and healthier items, and jerky is the perfect snack to fill this need,” said Jim Corallo, director of sales for Northland Premier, a snacks distributor based in Chandler, Ariz. “Jerky sales in general, due to the demand for higher protein items, are up anywhere from 12-30% depending on which study you read.”
Corallo has found that convenience store operators who recognize the demand for higher-protein items have given jerky a prime spot in their stores. Sharp category management, he added, is essential to the success and high profitability.
KEY TO CONSUMERS
Ken Johnson, director of marketing for Friendly Express in Waycross, Ga., said he has three keys to maximizing meat snack sales: package size, displays and promotions. The combination is working: sales are up in the double digits, thanks in part to the price of gas being down.
“We’re having a real strong year,” Johnson said.
The 36-unit chain operates in rural Georgia, where large- size snack bags are popular. In fact, 67% of the c-store’s category business is in such bags. “The larger packages are the dominant product in our stores.”
Friendly Express recently upgraded its fixtures, going with a new Jack Link’s-supplied three-foot endcap display. “The big change is that the top tier is now three high,” Johnson said. “We thought that adding more space and more single items would help, and I think it’s helped some.” That popularity ties directly to the customer demo- graphic the stores serve: largely males between the ages of 18 and 40.
“We get a lot of hunting here, a lot of outdoor kind of things,” said Johnson. “In a couple of weeks hunting season is going to kick off, and we usually get a pretty good spike in that kind of stuff during the season. People buy the bags for when they are out there in the woods.”
“It may just be what they’re buying,” Johnson theorized. “Maybe they’re buying beer (with meat snacks), and we can’t cross-promote that in Georgia.”
Tastes in various regions differ. “In Arizona we are selling our own private-label called Jerky Ranchers Select, a six-ounce value-added bag,” said Corallo. “Also Old Santa Fe Trail, a true ‘cowboy- style’ cut of jerky from New Mexico.”
His company’s other private-label brand, called Arizona Finest, is also a ‘cowboy-style’ cut, all-natural, no preservatives beef jerky that has a picture of the Grand Canyon on the label. Another strong seller is Krave all-natural jerky with such flavors as Grilled Sweet Teriyaki Pork, Black Cherry BBQ Pork, Sweet Chipotle Beef and Garlic Chili Pepper Beef. Yet another newcomer is Country Archer, also an all-natural beef jerky that features organic seasonings.
Corallo and his colleagues have found that the most effective promotion in this category is a discounted retail-priced shipper display.
“Since jerky is an impulse purchase and one of the higher retail items in the center store, it needs to be in a prime position within the setting of the center store, preferably on a front endcap where all potential purchasers can see the product when entering the store.”
RICE AND TEXTURE
Gary Tabor, marketing and sales manager for Jay Petroleum Inc. in Portland, Ind., which operates 35 Pak- A-Sak convenience stores, said strong meat snack sales are being driven by smaller package sizes.
“Our average gross margin is around 37%, with a mix between take-home and single serve. We just ended our fiscal year and I was running some numbers today. For the last 52 weeks we’ve seen a decline in the take-home of about a half a percent. I attribute that to price increases from Jack Link’s. We are $7.99 for a 2.85-ounce jerky. But the total category is up 4.6%. That’s driven by a 7.5% increase in our one-ounce single-serve over this last 52-week period.”
Price remains a major factor for Pak-A-Sak.
“I think we have pushed the retail about as high as it will go on the take home,” Tabor said. “We are actually looking at alternatives for shifting…a little bit to Old Trapper, where we can get a little bit better of a price point out to the consumer. We can get product out there for $5.99 where we have to get $7.99 for Jack Link’s.”
Interestingly, the chain’s consumer demographics also dovetail with the shift toward Old Trapper, Tabor explained.
“One of the reasons we went with the product is this: being a member of the older generation myself, some of the jerky is a little bit tough to chew,” Tabor said. “We were looking for a softer chew and we found that in the Old Trapper product. We’re doing that to try and get the elderly back into it.”
Younger consumers, on the other hand, are looking for a spicier, heavier flavor profile, he added. Gourmet meat snacks have thus far failed to pan out, Tabor said. “I’ve been presented with some higher-end lines, and primarily all I’m seeing is packaging differences and attempts to create an upscale image. I think down and dirty, in the convenience store industry Bubba still drives our business. And although Bubba likes shiny objects and packages, it won’t make him buy those.”
When it comes to managing the category, Pak-A-Sak seeks help from its supplier, Tabor explained.
“We go with the (direct store delivery) company because they have the expertise in the category. We pay a little more for the product but it takes the headache off our shoulders,” Tabor said. “I’d rather make 5% less and get more turns. You’ve got to admit that when you’re wearing a lot of hats and there’s somebody out there who might have a little more expertise than you do, you rely on his expertise—and you hold his feet to the fire.”