Customer preferences for healthy and portable snacks have accelerated demand for alternative snacks in recent years. “Alternative snacks tend to fit with a healthier lifestyle,” said Jayme Gough, analyst for NACS. “These products also often work for keto, paleo and other popular diets as well.”

Often packed with protein and easy to eat on-the-go, alternative snacks options for customers are often seen as either a meal replacement or a smaller intermittent snacking choice. “Snacking occasions continue to grow, with millennials leading the trend,” Gough said. “The alternative snacks category can be a perfect combination of convenient, portable and healthful," she said.

“The role of snack food is changing in different ways in reaction to Americans’ desire for balance, portable snack foods and holistic wellness,” David Portalatin, NPD food industry advisor, said in announcing NPD’s “Future of Snacking” report release last June. “Consumers over the age of 40, including Gen Xers and younger baby boomers, will drive growth in snacks like nuts and seeds, cereal bars, toaster pastry and meat snacks, while older baby boomers are going for it with higher consumption of chocolate candy, frozen novelties and ice cream.”

Appealing Margins

What makes alternative snacks particularly appealing to retailers is high margins. “Alternative snacks had a 42% margin for retailers, so while it is a small percentage of in-store sales, it has the potential to be a profitable one,” Gough said. The category has experienced steady growth year-over-year, with higher sales during the summer months potentially driven by an uptick of travelers on the road.

Alternative snacks joined the top 10 merchandise categories in terms of gross profit contributions in 2017 and moved up to the No. 8 spot in 2018. “The category continues to do well at c-stores, and we expect it will stay in the top 10 for the foreseeable future,” Gough said.

“Alternative snacks are thriving in c-stores,” agreed TD Dixon, chief marketing officer of Jack Link’s Protein Snacks. “Snacking growth is anticipated to be driven by sales of meat snacks, cheese snacks and other salty snacks, such as pork rinds, chocolate-covered salty snacks and veggie chips.”

The category has had strong sales at Smitty’s Fuel & Food in Defiance, Iowa. “People are more conscious about being healthier and not consuming so much sugar,” manager Michele Ertz said. “So we sell a lot of protein bars and beef jerky these days.”

It’s All About the Meat

Meat snacks garner the most sales in the category, comprising 45% of sales in 2018, according to NACS State of the Industry (SOI) data. “Meat snacks have gained a lot of traction, and the rise in popularity of diet trends like paleo and keto, which eschew processed grains, have had some degree of impact,” Gough said. “An assortment of meats other than beef and non-meat options lead the way in innovation for the subcategory, as well as a wide variety of new flavor profiles.”

According to Jack Link’s Protein Snacks, meat snack sales grew 38.5% from 2013 to reach $3.8 billion in sales in 2018. The company forecasts the category will grow an additional 27.8% to reach $4.6 billion by 2023. “Consumers are increasingly seeking fresh and less processed foods and are increasing their snacking throughout the day,” Dixon said.

One out of every four consumers is eating hot and spicy foods more often than a year ago.

Jerky has always been a good seller at Shout & Sack in Vinita, Oklahoma. “Travelers will buy the big bags, and our locals pick up the single-serve meat snacks,” said Julie Jamarik, store manager.

Lately, the top-selling flavor at Smitty’s and at Coniston General Store in Croydon, New Hampshire, has been teriyaki. “Our customers don’t go for spicy in meat snacks, but teriyaki has been very popular,” said Coniston General Store owner Roxanne.

Hot continues to be a trend across the category but especially in meat snacks. “One out of every four consumers is eating hot and spicy foods more often than a year ago,” Dixon said. “In the meat snack subcategory, hot flavored items grew 9.6% in the past year.” For its jerky line, Jack Link’s Protein Snacks released its hottest flavor yet—Jack Link’s Wild Heat Beef Jerky. The company also launched two hot flavors in its bar line.

More Than a Bar

Health, energy and protein bars are the third-largest contributor to the alternative snacks category with 24% of sales. “The language around better-for-you products has been shifting to highlight what is in a product rather that what's not, especially for health, energy and protein bars,” Gough said.

At Shout & Sack, protein bars have kicked off 2020 with a bang. “Eighteen months ago, we expanded our protein bar section to carry more flavors,” Jamarik said. “Lots of people come in at the beginning of the year on a fitness kick, and that boosts sales of protein bars through March or April.”

Jamarik is always on the lookout for new products in the category, as well as listening to customer requests for specific items. “If a customer asks for a particular flavor or bar, I’ll order one box and see how it sells,” she said. Items that sell well could earn a permanent place on the shelves.

The NACS Convenience Tracking Program (CTP) comprises consumer behavior analytics from more than 10,000 convenience store shoppers across 42 states, representing the most comprehensive consumer-driven metrics available to the industry.

To learn more about CTP and how to participate, contact Leroy Kelsey, director of industry analytics, at [email protected] or visit www.convenience.org/ctp.

Smitty’s Fuel & Food also listens to customer requests for protein bars. “We’ve brought in a larger variety of the One brand because of customer requests for more nutritious alternatives,” Ertz said.

Suppliers are also seeing the potential in wholesome bars. For example, Jack Link’s Protein Snacks recently introduced Lorissa’s Kitchen Whole-Made Medley Bars, a new product line that combines three leading protein sources with wholesome ingredients. “While the majority of consumers believe whole plant foods are healthier than processed options, more than half still want meat-like taste,” Dixon said of the new product.

Pick Up a Snack

As with salty snacks, many retailers find they don’t have to work hard to sell alternative snacks. “We have an endcap of beef jerky but our protein bars inline and feel the category is doing well enough on its own, so we don’t run specials or promotions,” Ertz said. “However, this year we will increase the amount of space devoted to alternative snacks because we want to bring in healthier products in the category.”

Coniston General Store also leaves the category alone to sell itself. “We merchandise it in the aisles, and people seem to find it OK,” Roxanne said. “We might make the section larger to offer more variety, but other than that, we’ll keep things the same.”

Retailers can bring attention to alternative snacks by offering these products in various destinations throughout the store. “Because 38% of consumers say the snacks found at checkout influence their snack choice, having an array of alternative snacks available to pick up at the counter is another way to capture impulse sales,” Dixon said.

Shout & Sack follows that advice by showcasing new alternative snack products by the checkout for impulse buys. Recently, the store also swapped the candy with the bar section, moving the bars close to the register on the center aisle. “The first thing customers see is our protein bars, and that has really upped the sales of those products,” Jamarik said.

Alternative Future

Retailers should continue to profit from alternative snacks as the healthy trend stays strong. “Retailers can promote the category as nutritious, on-the-go snacks, the perfect compliment to an active lifestyle.” Gough said.

Overall, the category offers opportunities for retailers to also carry popular and trendy products. “We think format innovations will continue to grow the category by providing more usage occasions for consumers,” Dixon pointed out.

Jamarik with Shout & Sack said the store likes to have a mixture of new products and “old faithfuls because some customers like to try new things and some enjoy the same things. The alternative snacks category gives us enough of both to keep all customers happy.”

The Power of CSX Data

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