The alternative snacks category was on the rebound in convenience stores throughout 2021 and most of 2022 after a dramatic sales slip in 2020 due to the COVID-19 pandemic. Now the question is whether the category can continue to attract the inflation-weary consumer.
Although a small category, representing 1.55% of in-store sales in 2021, alternative snacks sales were up 23.3% from 2020 to 2021 according to the NACS State of the Industry (SOI) Report of 2021 Data. During the first three quarters of 2022, alternative snacks sales surpassed 2021 sales during all but two months, per CSX data.
“These positive sales numbers mean the category continues to see momentum” said Jayme Gough, NACS research manager. “But on the flip side, inflation has impacted many in-store categories, including alternative snacks center-store categories.”
Consumers love to try new, fun flavors, but the flavors they come back to again and again are the classics.”
The average unit price for the category was up 7.9% from 2021 to 2022, NielsenIQ data show, and while sales were up 3.8%, units were down 3.8%.
“These figures tell us that although there are sales dollars coming in, c-stores aren’t actually selling more product,” said Gough.
At Nashville-based MAPCO, the category is steady, but “not what it was two years ago or before when we were seeing really big growth within [the category],” said Kelley Gutierrez, senior category manager, candy and snacks, MAPCO.
“In order for us to keep [customers], we’ve got to be creative with how we’re promoting because people are taking a second look at everything they’re spending on,” she said.
C-STORES HAVE THE MEATS
The majority of sales in the category come from the meat snacks subcategory. This was true again in 2021. Meat snacks represented 57.2% of category sales and boasted the second-largest gross margin for all subcategories, 45.60% (NACS SOI Report of 2021 Data).
A leader in meat snacks, Jack Link’s is seeing a shift in consumer purchasing habits.
“Two years ago, we saw a boomin large value bags when consumers were staying close to home with more expendable income,” said Jennifer Martin, senior category manager, convenience, Jack Link’s. “That trend has slowed down in the c-store channel.”
Martin said consumers are now gravitating toward smaller-sized jerky bags (between 2 and 4 ounces). Meat sticks have also grown in overall dollar share with single sticks contributing to that growth, but bagged sticks have slowed.
Gutierrez said at MAPCO, meat snacks sales have slipped during the past year, especially the larger pack sizes; however, meat sticks are performing well. Gutierrez attributes the success to offering a variety of different brands and flavors and aggressively promoting them.
“There are definitely opportunities within cross promotion for that value proposition,” she said, pointing to the example of running a promotion on a bag of jerky or a meat stick and a packaged beverage. “That kind of a [promotional] trend isn’t going to go away, especially as dollars start to tighten and people might be using c-stores for meal replacements,” Gutierrez said.
With rising food costs, it could be cheaper for a customer to purchase a high-protein meat snack and a packaged beverage at a c-store than to buy a fast-food meal, she noted. “The biggest promotional proposition that I work with is what can I do to give somebody an option who would otherwise walk out without anything?” Gutierrez said.
When it comes to flavors and innovations, consumers still want that spicy kick, but they are also seeking that unique and novel taste. “It’s still those creative flavors, like the hot and spicy, the tangy items,” said Gutierrez. “But you’re also expanding into more of a foodie palette.”
According to Gough, international flavors, including varieties of spice, or combinations of sweet and hot, have become more and more popular.
“Consumers are looking for flavor that is intriguing and fun—something they may not have seen before,” she said.
Martin agreed with Gough, but when it comes to jerky flavors, original and teriyaki are still the No. 1 and No. 2 flavors that consumers purchase. “Consumers love to try new, fun flavors, but the flavors they come back to again and again are the classics,” she said.
In order for us to keep [customers], we’ve got to be creative with how we’re promoting because people are taking a second look at everything they’re spending on.”
RAISING THE BAR
The health/energy bar subcategory is the third largest subcategory. It accounted for 16.7% of category sales on a per store, per month basis, and has the highest gross margin of all subcategories within alternative snacks (49.49%). According to Hershey, which distributes the protein bars ONE and FULFIL, the subcategory is evolving.
“[Consumers] continually demand better taste, texture and flavor experiences without sacrificing the quality nutrition that underpins all protein snacks,” said Michael Reese, head of marketing for ONE and FULFIL, The Hershey Company.
The subcategory is starting to take some tips from the candy category but with a healthier spin. Hershey’s FULFIL bar is a multi-layered protein bar that “closely mimics the eating experience of a traditional candy bar,” according to Reese. Hershey’s ONE brand recently launched ONE Crunch Bar, which Reese described as a “light, crispy eating experience perfect for a mid-afternoon pick-me-up.”
Gutierrez believes these candyinfluenced health bars may have an impact on the candy category, as the cost of these bars can rival candy bar prices.
“[Consumers] can get that sugar fix with innovative flavors, and the way [suppliers] put together the ingredients and the recipes that taste awesome, [they] are very competitive from a pricing standpoint with the candy category,” she said.
This year, Hershey is launching a category-blending bar under the ONE brand called ONE Coffee Shop, featuring 20 grams of protein and 65 milligrams of caffeine. The bar “focuses on the typical morning protein-bar eating occasion, where consumers are looking for something to get their day going,” said Reese.
IT’S BETTER FOR YOU
The granola/fruit snacks subcategory was the smallest sales contributor to the alternative snacks category, accounting for 7.1% of category sales in 2021. According to PIM Brands, which manufactures and distributes the Welch’s Fruit Snacks brand, customers are looking for flavor options beyond traditional, and the better-for-you trend is back on the rise.
“A key trend driving innovation is rediscovering ‘better for you,’ with consumers looking to stay healthy. This has led to a surge in snacks with sugar-free or zero-sugar claims,” said Mike Scalera, marketing director, Welch’s Fruit Snacks core equity, PIM Brands.
Gough of NACS agreed. “During the pandemic and up until recently, consumers were all about the indulgent snacks, but now we’re seeing people trying to get back on track in terms of their health, so they’re seeking not only better-for-you alternatives but also permissible indulgences,” she said.
Consumers are looking for flavor that is intriguing and fun—something they may not have seen before.”
TIPS AND TRICKS
According to Reese, visibility and shopability are key when merchandising alternative snacks.
“Not all protein snacks are the same, so helping the shopper easily navigate between high-protein bars that will fill them up for the next several hours versus a smaller protein or energy bar that is designed to tide them over ahead of an upcoming meal is very important,” he said.
He also notes that placing alternative snacks next to complementary products is critical. For example, protein snacks pair well with coffee and energy drinks.
When it comes to meat snacks, these purchases are highly impulsive, according to Martin. She said any additional points of disruption in the customer journey are key.
For Gutierrez, it’s all about being creative. Her tips for selling the category include having a front-end checkout, a queue lane and placing alternative snacks in an area next to packaged and dispensed beverages.
“The biggest thing is to create those basket builders and put it next to something else where you’ve got the affinity,” she said. “That secondary or triplicate placing of some of your top sellers or your value items can get that product into the consumer’s line of site ... [it] is going to keep them coming back more often.”