Salty snacks are getting suggestive, with sweet and spicy variations abounding. With the Sweets & Snacks Expo scheduled this month in Chicago, the category is generating as much interest as it ever has.
By Marilyn Odesser-Torpey, Associate Editor
Seeds are taking over the snack aisles at some convenience stores across the country. Cubby’s Convenience Stores, which has 33 locations in Nebraska, Iowa and South Dakota, carries seven different brands of sunflower seeds, each of which has “umpteen different flavors,” said company president De Lone Wilson. Some of the South Dakota stores also offer regional brands.
“There are so many varieties and, with the SKUs constantly increasing, sometimes it gets overwhelming, but we carry them because they sell,” Wilson said.
Sunflower and pumpkin seed sales reached $305 million, according to a report for the latest 52 weeks ending Dec. 28, 2014 from IRI, a Chicago-based market research firm. That’s a 3% rise over the previous year.
Mark Jackson, vice president and chief operating officer at Rattlers Convenience Stores, which has 15 locations in Texas, agreed that the number of seed options can be staggering. But flavors, such as extreme dill, jalapeño and hot habanero seem to intrigue customers.
“Customers want more and more variety,” Jackson said. “We’ve acclimated them to expect more variety because that is what we have given them.”
And seeds are not the only snacks that offer ramped-up flavors to tempt consumers’ taste buds. Boldly flavored Gardetto’s from General Mills, in varieties such as Italian, Italian cheese and deli-style mustard pretzel mix, are brisk sellers. So are Takis, a crunchy corn-based product that comes in hot chili pepper and lime, hot sauce, habanero and lime, and guacamole selections.
“It appears that consumers are looking for robust, stand-out flavors,” Jackson said.
VARIETY ABOUNDS
Overall, Jackson has seen a volume increase of between 3-5% across the chain in the overall salty snack category.
Jackson recalled when 25 products dominated the category. Now, he said, there are 300-400 different choices for salty snacks.
In 2013 alone, Jackson said, manufacturers unleashed an onslaught of new products—at least over 200.
“They were diluting the category, but now some of the major brands seem to be self-monitoring and keeping their new product introductions to a reasonable number,” he said.
Another source of confusion for the retailer is the growing number of snack items that straddle the line between sweet (candy) and salty. Jackson pointed to chocolate- or yogurt-covered pretzels and salted peanut clusters with chocolate and caramel as examples.
“Categorizing those types of products can be difficult and, often, we display them in both the bagged candy and salty snack aisles,” Jackson said.
At Cubby’s, about 25% of the gondola shelving, at least one end cap and an under-counter display are devoted to salty snacks. Rattlers dedicates between 40-50% of gondola space plus end cap space in the stores to salty snacks.
“I also noticed last year that we were using a lot of shippers, too many, so we’re trying to reduce the number of them that we put out,” Jackson said.
Although it may seem counter-intuitive, Rattlers is displaying some better for you options in with the salty snacks. Some of them are gluten-free, others have less sodium.
“They’re not necessarily top tier movers, but there’s a definite niche for these kinds of products,” he said.
One of the most exciting recent developments Jackson said he’s seen in the salty snacks category is the new packaging some manufacturers have debuted. Jackson cited Kettle brand chips as an example, pointing to the switch from cellophane to satin finish and the addition of eye-catching graphics.
“Packaging has reinvented some of these products, brought them back to life,” Jackson said. “It was time and for some it was long past time.”
BY THE NUMBERS
Salty snacks marked the 5th biggest merchandising category at convenience stores, according to the National Association of Convenience Store’s (NACS) State of the Industry (SOI) report for January-December 2014. Salty snacks generated $6,499 in dollar sales per store, per month following cigarettes, packaged beverage, beer and other tobacco products.
Salty snacks experienced margin dollars of $2,528 per store per month with a 38.89% gross margin, according to the industry report.
The category was up 8.5% year over year, and margins for the category rose 11.2% year over year. Salty snack sales accounted for $5.8 billion in sales at convenience stores.
Potato chips led the category with $1,639 in monthly sales, with monthly gross profit dollars of $637 and a 37.9% gross margin. Tortilla corn chips and popcorn rounded out the top three.
