Emphasizing snacks throughout the day as a meal replacement or an afternoon treat is driving sales across all age groups.
By Howard Riell, Associate Editor.
The past year was a strong one for nuts, seeds, crackers, pretzels, popcorn and trail mixes, according to convenience store sales data from SymphonyIRI. The largest of these subcategories, nuts, grew unit sales 5% in the 52 weeks ended Dec. 30, its third consecutive increase since 2010. Potato chips, the largest salty-snack subcategory, also saw increases, with sales reaching $1.4 billion.
The 2013 NACS State of the Industry report backed up these sales figures. On average, convenience stores totaled $6,297 in salty snack sales with a gross profit of $2,408. The gross margin for the salty snack category overall was 38.2%.
With retailers anticipating snack sales to perk up as the economy slowly revives over the next 12 months, promoting the category intelligently, innovatively, effectively and interactively—as one chain in particular did this summer—becomes even more essential.
Kum & Go, for example, in June launched a summer campaign designed to attract snacking experts–“snaxperts”–whose two main summer food groups are snack foods and fountain drinks. The chain operates 422 convenience stores in 11 states.
The promotion is designed to be fun, take advantage of the brand equity of a number of products, and strengthen the retailer’s relationship with consumers. Kum & Go carries approximately 200 salty snack SKUs in all.
“Snaxperts are those who know Dr Pepper tastes even better when you use a Twizzler for a straw,” said David Miller, senior vice president of marketing for the West Des Moines, Iowa-based chain. “Snaxperts also have discovered the pleasure of chasing Reese’s Peanut Butter Cups with orange soda. Snaxperts will pair a maple bacon doughnut with a Nuclear Energy drink just because they can.”
Big Opportunity
No one doubts that this is a category worth putting considerable marketing muscle behind.
“Ask Frito if this is a good business,” said Tom Pirko, president of BEVMARK LLC, a retail consulting firm in Buellton, Calif. “You would have to be blind not to perceive that we are a nation hooked on chips and salty snacks.”
Nuts, he added, are considered to be special. “That’s because they are known to be healthy as well as compulsively tasty.”
Snacks, Pirko underscored, rely perhaps more heavily than any other category on mouth-feel, which is why they pair so well with cold, sweet drinks. “For the retailer, it is a marriage made in heaven,” he said. “It is as close to printing money as you can get; even better than the yesteryear cash feed from tobacco. All of these items will continue to grow in popularity because they have one secret weapon: they generate impulse purchases and immediate gratification.”
That is the rationale behind Kum & Go’s decision to emphasize snack promotions.
“It is a growing category for us,” said Megan Elfers, director of marketing and communications for Kum & Go. “We have found that snacking has been a great business for us, and it goes with so many other things that we sell in store, whether that is drinks or the food items. We always like to offer a food combination with salty snacks.”
According to Elfers, the chain sees a strong performance of snack products with sweet-and-salty flavor profiles. “We are increasing items within the salty snack segment to include more bold flavors and healthier profiles.”
Among the items recently introduced have been Cracker Jack’D, HK Anderson Pretzels and Blue Diamond Flavored Almonds. Cracker Jack’D in particular typifies the trend, taking a tried-and-true snack item and updating it with bold flavors, including Sweet’n Savory Clusters, PB & Chocolate, Zesty Queso, Cheddar BBQ, Berry Yogurt, Buffalo Ranch and Spicy Pizzeria.
Catering to Customers
Kum & Go’s summer digital campaign, which runs through Aug. 31, invited the so-called snaxperts to submit photos of their most imaginative snack food/beverage combinations on Facebook, or with hash-tagged images on Twitter and Instagram. Customers were also asked to collect a $1 store coupon by completing a quiz to learn what type of snaxpert they are: Classic, Curious, Explorer, Pioneer and Supreme Master. Visitors to www.kumandgo.com/snaxpert can take the quiz or enter the “pair and share” contest. No purchase is necessary to take the quiz or enter the photo competition.
Photos followed one of eight themes, such as “Road Trip,” “Poolside” and “Backyard BBQ.” The top theme match, as selected by a panel of judges, will win a $500 Kum & Go gift card. The runner-up will be awarded a $250 gift card. There will be 16 winners in all, two for each of the eight themes. Kum & Go stores offer thousands of snack items and up to 32 fountain drink flavors, as well as a host of other beverages.
“More of our customers are coming in not just for the standard meal times—breakfast, lunch and dinner—but because of an increased habit of snacking throughout the day,” Elfers said. “We want to be seen as the perfect place for that in-between-meal snacking period.”
Company research has also shown that while the chain’s snack offering was strong, customers often did not know all of the combinations that were available, hence the “snaxpert” promotion.
In its communication with consumers, the chain wanted to be sure the promotion was easy to understand and as user-friendly as possible. “We’ve tried some different things in the digital space,” Elfers said. “This is the first time we’ve done an SMS (short message service) text program, which we are launching with this promotion as well. We are excited about having another way of communicating with our customers, through texting, but we are being very careful to make sure our customers are comfortable with this technology.”
SMS’s predictive technology makes text messaging faster and more efficient on non-QWERTY cell phones without full keyboards.
Social Media Connection
Overall, social networking remains a solid part of all future promotional plans. “We work really hard to reach Millennial customers,” Elfers said. “We know that they are an on-the-go group of consumers, so it’s important for us to be in the same spaces that they are. A lot of our digital pieces allow us to have that communication with them in a place with which they are very familiar.”
The chain has a digital campaign consumers can see on its Website. “We are engaging some of our biggest snaxperts with social media and the Web, but we also have TV, radio, in-store digital and outdoor signage to support the program,” Elfers said.
More traditional marketing tools to push snack sales included pumptoppers, window signs and a host of in-store point-of-sale displays. Employee training was also integral to the program’s success.
About a month into the promotion, consumers have enjoyed the enhanced emphasis on one of their favorite categories. “We’re pleased already with the kind of response we have been getting on Facebook and Twitter,” Elfers said. “People seem to be having a lot of fun sharing their experiences with us. We see that customers have found it pretty easy to respond to the campaign, get engaged and share things with their friends. At the end of the day, that makes for a successful promotion.”
