April 2018

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Alternative Snack Nation

Healthy snacking is turning alternative snacks into a hot category.
Chris Blasinsky

Alternative snacks, a catgory driven by protein- and energy-rich items, reached the top 10 in-store merchandise categories for U.S. convenience stores in 2015 and 2016, per NACS State of the Industry data, signaling a desire by consumers for immediate and healthier snacking options.

Consumer demand for healthier or better-for-you snacking options is also solidifying the convenience store industry as a channel of choice for items like meat snacks, which make up nearly 60% of the alternative snacks category, health/energy bars (about 30% of the category) and granola and fruit bars (about 5%).

Snacking Behavior

Most consumers are looking for on-the-go snacks that satisfy an immediate need, whether it’s a cure for hunger between meals or to treat themselves. Meat snacks, however, may be the more versatile of the alternative snacking category due to their functionality, per Mintel research, and can satisfy a number of need states: hunger (43%), to provide energy (26%), to eat on-the-go (35%) or as a healthy option (21%).

A November 2017 NACS Shopper Panel survey with General Mills found that two in three shoppers (65%) eat three or more snacks per week away from home—a great opportunity for convenience retailers, as 83% of all items purchased inside the store are consumed within the hour, and 65% are consumed immediately.

The Shopper Panel survey also revealed that 33% of shoppers purchase half or more of their snacks at a convenience store, noting that these consumers choose c-stores because the channel offers a quick shopping experience, proximity to where they work or live and are viewed as a one-stop shop.

But what if convenience stores were to disappear? Where would hungry snackers turn? Per Shopper Panel findings, nearly half of all shoppers (47%) say a grocery store—not drug or dollar—would best meet their snacking needs under this circumstance. Why? Because c-store shoppers typically do not cross-pollinate when it comes to shopping small formats. They already shop grocery stores in addition to frequent trips to c-stores, but only visit other small formats when they are in a pinch.

Category Definition

Alternative Snacks

+ Meat Snacks
+ Health/Energy Bars

+ Other Alternative Snacks
+ Granola/Fruit Snacks

NACS category definitions can be used to establish performance benchmarks and a framework for retailers and suppliers to discuss market performance comparisons. Download the NACS Category Definitions and Numbering Guide-Version 7.2.

And since the average length of time a consumer spends inside a convenience store is less than four minutes, retailers have a limited window of time to grab shoppers’ attention and convert to purchase. One in four shoppers (24%) say they are the most motivated to try a new product if they see it on a display. They are also motivated to try a new product if there is a coupon or promotion for that item (21.8%), and 30% of those surveyed have at least one convenience store app installed on their mobile device. Although millennials are not clipping paper coupons like previous generations, there is ample opportunity to capture their snacking business by offering mobile coupons synced with apps and loyalty programs.

Grab Them Immediately

Findings from the 2016 NACS resource, “Ideas That Work to Grow Better-for-You Sales,” reveal eight concrete tactics that can help retailers expand their selection of better-for-you offers and, as a result, grow sales.

The first tactic is to grab customers’ attention immediately as they walk into the store. For example, make the most of convenience, one of the key drivers of food behavior. Merchandising quick, easy to eat, healthy snacks in areas with heavy traffic (front of store), or that are frequent destinations inside the store (drink coolers), will help increase consumer purchasing of those items. Better-for-you products like alternative snacks can also be displayed near a fresh case, endcap or in baskets or bins, as long as they are clearly visible as customers enter the store.

Industry Sales

Source: NACS State of the Industry Report of 2016 Data

Another tactic is to have multiple displays to promote healthier options, and keep similar categories together. Consumers won’t buy it if they don’t see it. And at convenience stores, time-starved customers will only hunt for something for so long, especially when the average time spent inside the store is less than four minutes.

To remind customers of your offer, develop multiple displays of some of the healthier options paired with other items (baked chips and trail mix with the regular chips, no-sugar-added dried fruit with the candy, for example). This tactic increases the visibility of these items and lets customers know they are available. Also, customers look for quick and easy pairings, such as health and protein bars with coffee during the morning daypart.

Subcategory Performance

Source: NACS State of the Industry Report of 2016 Data

Check It Out

Taking a quick look back at the February 2018 magazine cover story, “Testing Healthy Sales,” a healthy checkout pilot at Utah State University’s (USU) on-campus Quickstop convenience store showed an increase in sales of select healthier items early in the test. Such products included protein bars, cereal bars, granola bars and energy bars.

At the store, sales of these items increased from the first week that they were displayed by the register. As 95% of these items were already sold in the store, the test demonstrated that moving the items to the checkout area, where impulse purchases are high, led to increased sales of all items. USU also incorporated signs by the displays to label the items as healthy and call attention to them at the point of purchase. USU found that customers were looking for healthy options, so by making these snacks convenient by the checkout area, students and staff were more likely to purchase them.

According to a 2015 Hudson Institute report commissioned by NACS, 75% of convenience store customers are eating healthier than they used to, and 66% of convenience store shoppers are looking for healthy foods that can be eaten on-the-go. There is ample opportunity to apply the results of this pilot test to other convenience stores now that healthy snacking is the norm.

Per Store, Per Month Sales

Source: CSX LLC; www.csxllc.com

Confectioners Eye Snacks

Last year marked two significant business developments by leading confectioners to grow their presence in the snacking space.

In December 2017, The Hershey Co. reached a deal to acquire Amplify Snack Brands, the maker of Skinny Pop popcorn and Oatmega premium grass-fed whey protein bars and cookies—a move that USA Today reported, “will allow the candy manufacturer to nibble into new markets.”

Hershey CEO Michele Buck said in a statement that the acquisition of Amplify and its product portfolio is an important step in Hershey’s journey “to becoming an innovative snacking powerhouse as together it will enable us to bring scale and category management capabilities to a key sub-segment” of the snack aisle.

In November 2017, Mars Wrigley and KIND announced a strategic partnership that gave Mars a minority stake in KIND. As part of the agreement, the two companies are growing KIND’s product offerings and business globally, which include better-for-you fruit and nut, breakfast and protein bars.

Mars Wrigley also revamped the packaging and logo of its goodnessKNOWS better-for-you snack squares in 2017, and this year the company is expanding beyond its traditional fruit and nut line and adding six new flavors to the line-up: Peanut Butter Crunch, Nut & Sea Salt (with Almonds and Peanuts), Maple Cinnamon & Almond, Honey Almond Bourbon Vanilla, Mocha & Almond and Oats Raisins & Almond.

Also delving deeper into snacking is PepsiCo, which is expanding its Hello Goodness brand of better-for-you snacks online, which the company initially launched as a vending initiative. Since being introduced in December 2015, Hello Goodness has helped promote PepsiCo’s health-conscious snacks like Sabra Ready-to-Eat Hummus cups.

Snacking Nation

For convenience stores, alternative snacks are a great opportunity to bring snackers into the store.

Per Mintel, May 2017 research found that the frequency of snacking is on the rise from one time per day to two to three times. Furthermore, one in three (32%) consumers said most of the snacks they ate were healthy and more than one in four (28%) said they snacked on healthier foods in 2017 than in 2016. The 2017 report also found that snacks with health-related claims were among the fastest growing snack launches, with low/no/reduced allergen claims accounting for 46% of total new snack product launches in the U.S. last year, an increase of 30% over 2013.

Meat snacks can satisfy a number of need states: hunger, to provide energy, to eat on-the-go or as a healthy option.

“In recent years, brands have focused product innovation largely on cleaner formulations, highlighting an opportunity for innovative products with health attributes that appeal to health-conscious consumers,” said Beth Bloom, associate director of U.S. food and drink reports at Mintel.

Consumers most desire a better-for-you snack, like a protein or cereal bar, in the morning daypart Mintel found. Snackers appear to be interested in starting the day with a snack that is healthy (29%), light (23%) and energizing (23%).

As consumer motivations continue to evolve alongside a love for snacking, Mintel suggests several aspects to keep in mind that could help convenience retailers develop their alternative snacking strategy:

  • A quarter of heavy snackers claim to be too busy to eat a full meal.
  • Consumers’ view of what constitutes a snack is expanding.
  • Brand plays a significant role in snacking purchasing decisions, followed by price and health.

Among today’s time-starved consumers, grazing and 24/7 snacking is the new normal. Three square meals a day simply doesn’t work for consumers who are seeking instant gratification: eating what they want, where they want and when they want. Offering alternative snacking options can help drive success for the convenience retail channel with today’s snacking nation.

Chris Blasinsky

Chris Blasinsky is the content communications strategist at NACS. She can be reached at cblasinsky@convenience.org.