It’s a comeback story for salty snacks. In 2021, the salty snacks category was up 11.3% over 2020, and in-store sales averaged $7,913 per store, per month, according to the NACS State of the Industry (SOI) Report of 2021 Data, and that growth continued into 2022. In fact, the first three quarters of 2022 showed even stronger improvement for salty snacks than in 2021, according to CSX monthly data. The category saw double-digit growth during that period, trending above 2019, 2020 and 2021 numbers.
“In 2020, people were working from home, so they weren’t going out to grab a snack during the middle of the day or on their way to and from their workplace,” said Jayme Gough, NACS research manager. “But 2021 was a phenomenal bounceback year for all in-store categories, including salty snacks, and 2022 to date has delivered even more growth for the category.”
Barbecue flavors are on the rise."
Salty snacks made up 4.36% of inside sales in convenience stores in 2021, and though that may be a small contribution, gross margins in the category were mighty. C-store salty snacks saw gross margins of 40.83% on average in 2021, up 0.93 point year over year. Gross profit was up 13.9% in 2021 over 2020, averaging $3,231 per store, per month, and gross margin contribution was also up 0.26 point year over year to 5.19%.
The potato chips subcategory accounted for the largest percentage of category sales at 38.5%, according to 2021 NACS SOI data. The subcategory increased sales year over year by 8.1% and gross profits by 11.1%.
“Potato chips are a staple for convenience stores and a profit driver,” said Gough. “We’re seeing a ton of innovation in this subcategory, including spicy, limited-edition flavors and international flavors.”
Ready-to-eat popcorn is poised to become an $18 billion global market by 2031."
Gough also pointed to strategic partnerships that are emerging in the salty snacks category overall, and in particular, the potato chips subcategory. In 2021, Kellogg partnered with Wendy’s on a co-branded Pringles chip flavor called Wendy’s Spicy Chicken, following a successful collab on a Wendy’s Baconator-flavored Pringles chip in 2020.
“Chips remain one of the most versatile products when it comes to flavors,” said Gough. “There are options for everyone.”
According to Nick Hammitt, vice president, salty snacks, Campbell Soup Company, the company’s Kettle Brand and Cape Cod brands of potato chips are performing exceptionally well.
“Both brands ranked in the top 15 for growth in total convenience among leading potato chip brands,” said Hammitt. “We continue to see strong growth and demand for our many salty snack brands, including potato chips, with Kettle Brand achieving double-digit growth in 2022.”
Another subcategory that is making inroads is ready-to-eat popcorn. At Gold Medal Products, a food equipment provider that offers contactless commercial popcorn machines, among other products, growth in its popcorn business has sustained double digits for the past five to six years.
“[Popcorn] has real staying power,” said Pete Bakala, vice president of branch sales and operations, Gold Medal Products. “It’s really growing, and it’s got this ability to pivot in a lot of different directions. It can be a healthy snack or indulgent snack depending on how it’s flavored.”
Ready-to-eat popcorn was the second smallest subcategory of salty snacks, making up only 3.2% of category sales in 2021. Bakala says that c-stores should take a closer look at the popcorn subcategory, as ready-to-eat popcorn is poised to become an $18 billion global market by 2031, according to Allied Market Research.
“That’s a huge pie, and [convenience stores] should ask themselves, ‘How do I best take advantage of that?’” said Bakala.
SMALL AND SPICY
“Salty snacks is one of the more interesting categories because it’s so dynamic in terms of flavors, packaging and actual types of snacks. It just changes so frequently,” said Gough, adding that uniquely spicy flavors continue to dominate the category.
Salty snack consumers are also gravitating toward smaller packaging sizes and portions."
According to Hammitt, hot and spicy flavors are what’s driving growth for Campbell across its salty snacks products. In fact, Kettle Brand ranked top five for spicy brands in the total potato chips category, according to research from IRI. Frito-Lay is seeing the same trend. The company’s Flamin’ Hot Cheetos product is the No. 1 item in the salty snacks category, according to IRI.
“Hot and spicy continues to be the largest and fastest-growing segment in the category with the rise of Gen Z,” said Kent Montgomery, senior vice president, PepsiCo industry relations and multicultural development.
“We recently launched Cheetos Flamin’ Hot Tangy Chili Fusion, which we expect to be a hit with Gen Z’s diverse palate, in particular.”
Salty snack consumers are also gravitating toward smaller packaging sizes and portions as healthier snacks take hold of their pallets once again. “During the pandemic we saw more indulgent snacking behaviors and consumption patterns,” said Gough. “As we’re emerging, there’s a re-interest in healthy, better-for-you snacks, yet consumers don’t want to forgo their indulgent favorites, so we’re seeing smaller packaging, bite-size items and smaller versions of products.”
According to Tim Bortner, brand manager at Hormel Foods, its PLANTERS brand is hopping on both the spicy and smaller packaging trends. Last year, the company introduced a sweet and spicy peanuts flavor, as well as a “Bold N Savory & Cracked Black Pepper” flavor, and this year, these items will be available in smaller, six-ounce bags. “Our consumers are focused on the core items with an eye on innovation and finding something new,” said Bortner.
At Frito-Lay, Montgomery said smaller versions of snacks have grown popular, and the company recently introduced Frito-Lay Minis, which are smaller portions of core snack brands in easy-to-pour, resealable canisters. “Packaging and proper portions are also important in our salty snack product innovation,” he said. “Consumers are seeking indulgence, while also placing greater emphasis on wellness and moderation.”
THE PERFECT SNACK
Is there such a thing as the perfect snack? According to Frito-Lay’s U.S. Trend Index, the perfect snack does in fact exist, and it crunches. Seventy percent of snackers polled said they would reach for a food with a crunch when considering their ideal snack.
Gen Z is twice as likely as other generations to order delivery when a snack craving hits."
While Frito-Lay predicts that all adults will continue to look for crunchy snacks in 2023, Montgomery also said barbecue flavors are on the rise. The company introduced a Doritos Sweet Tangy BBQ flavor as a limited-time offering in early 2022, and because it was so popular, Frito-Lay is now making the product available year-round in 2023.
Frito-Lay also points to generational differences in snacking behaviors. Nearly 50% of Gen Z believes snacking is most satisfying after dark, and they are twice as likely as other generations to order delivery when a snack craving hits. Conversely, half of millennials get their late-night snacks at a convenience or grocery store.
“Understanding how to reach different types of shoppers is more important than ever,” said Montgomery. “Customers are continuing to embrace the omnichannel approach and want grab-and-go options, curbside pickup and delivery as well as personalization at scale.”
The Power of CSX Data
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