February 2018

Category Close-Up

Snack Attack

Salty snacks help meet consumer munching requirements throughout the day.
Pat Pape

Lisa Dell’Alba is a busy person. She is president and CEO of Square One Markets in Bethlehem, Pennsylvania, wife to Steve Rosati, and mom to her six-year-old son, Coltrane. Like most active members of her generation, she’s on the go from early morning until late at night, which means that snacking frequently replaces a formal meal.

“When I was a kid, I went to dance class once a week,” she said. “Now children’s activities take place several times a week. That changes the pattern of family living, and sitting down to have a meal together is challenging.”

The entire family takes karate lessons together several evenings a week. On those days, Coltrane and Lisa may have a snack at 4:00 pm. Later, Steve comes home and may grab something different to eat before they head for class.

Dell’Alba strives to schedule traditional family meals, “but today, eating is more wrapped into what we’re doing instead of a planned sit-down dinner,” she said.

Some Headwinds

Dell’Alba and her family are not alone. Snacking is big for many, and the salty snacks category often fits the bill. Led by the much-loved potato chip, salty snacks have long been a c-store favorite. But over the past year, salty snacks have faced challenges, according to Stephan Mecklenburg, research analyst at NACS.

“Nielsen says sales are up, but the number of units is down,” he said. “In fact, every salty snack sub-segment, except for potato chips, was down in units in 2017, and potato chips were flat.”

Last year, growth rates for top snacks, such as tortilla chips and popcorn, were less than half the growth rates of 2016, according to Nielsen, the consumer research organization. Blame that slowdown on fuel prices, which have been climbing steadily since the lows of 2015.

Category Definition

Salty Snacks

+ Potato Chips
+ Tortilla Corn Chips
+ Other Salty Snacks
+ Nuts/Seeds
+ Puffed Cheese

+ Mixed
+ Crackers
+ Ready-to-Eat Popcorn
+ Pretzels
 

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.

“Increased gas prices have impacted total store trips,” Mecklenburg said. “When looking at it from a year-over-year basis, a lot of key [center store] categories are starting to decline, including salty snacks.”

Larry Jackson, owner of both the Good to Go Market and the Bullhead Pit Beef Food Truck out of Columbia, Maryland, saw customer demand for potato chips decline in 2017. “But it seems people are coming back to them,” he said. “People have stopped apologizing for wanting to eat something that tastes good. Maybe they aren’t buying the biggest bags we have, but they’re buying the smaller packages and eating them in moderation.”

Millennial Munching

As with most things current, millennials are driving the changes in snacking. According to research commissioned by Welch’s Global Ingredients Group, 92% of American millennial snackers say they consume a snack instead of a traditional meal at least once a week. Half reported replacing a meal with a snack at least four times a week, while 26% do so a minimum of seven times a week. The trend is the result of their busy, over-scheduled lives, which finds them snacking at work (48%) and in their cars (34%).

The NACS State of the Industry Report of 2016 Data notes that while salty snacks are moving toward healthier positioning, they remain an indulgent category for most consumers.

A recent Mintel survey found that 50% of Americans say they snack to give themselves a treat and 28% say that taste is more important than health when selecting a snack. While many snackers freely indulge their whims, the millennial generation continues to demand better-for-you or “clean label” snacks, and manufacturers are responding.

According to Mintel, snacks touting health-related claims are among the fastest growing snack launches. Low/no/reduced allergen claims made up 46% of the new snack product launches in 2017, a jump of 30% over 2013.

“Products that contain attributes, such as natural, organic, non-GMOs, low sugar, low carbs, no artificial ingredients and very few ingredients, can be perceived as healthier,” said Kristen Thaler, merchandising manager for McLane Co. of Temple, Texas.

“In fact, 64% of millennials believe that fewer ingredients mean a healthier snack, which is more than any other generation,” she said. “And 79% of millennials said that understanding all the ingredients increases their level of trust in a packaged snack.”

Millennials also seek snacks with protein, even if the protein comes from plants. “Protein is such a big thing right now because people are using snacks as meal replacement,” Mecklenburg said. “Everything is getting a protein addition. There’s been a lot of innovation in bars featuring nuts [and other ingredients], and that has been more appealing to consumers than traditional nuts alone. There’s only so much you can do to make a nut more exciting.”

64% of millennials believe that fewer ingredients mean a healthier snack, which is more than any other generation.

With the push for clean labels and more protein, snacks that once would have been exclusive to health food stores are making their way onto c-store shelves.

Enjoy Life Foods of Chicago, creator of gluten- and GMO-free snacks, produces Seed & Fruit Mix, which mingles sunflower kernels and pumpkin seeds with assorted dried fruit bits. Bags of the product are available in drug and grocery stores and were recently introduced to several 7-Eleven locations in the Chicago area.

Harvest Snaps Crisps, a high-protein crisp made from whole peas, comes in exotic flavors ranging from Wasabi Ranch to Mango Chile Lime. Nielsen Convenience Channel sales data estimates more than 65,000 c-stores carry at least one Harvest Snaps SKU. Popchips, a Los Angeles potato chip company, cooks potatoes using heat and pressure instead of deep frying. The procedure reportedly reduces fat and calories as compared to traditional chips.

Flock of Flavors

Generation Z also has influenced the salty snack aisle with enthusiastic acceptance of hot spicy tastes and non-traditional flavors, such as smoked gouda, biscuits and gravy, rosemary with feta cheese, sriracha sour cream, cappuccino and chipotle ranch. “They’re willing to try anything,” said Jackson of his Gen Z customers. “Recently, we offered spicy caramel popcorn with jalapeno. I was skeptical about how it would sell, but it was pretty good.”

“A lot of the limited flavors that Lay’s has introduced do really well,” said Dell’Alba. “The company’s good about creating customer demand and making the products an in-and-out type of thing.” (In 2017, Frito Lay again held its “Do Us a Flavor” contest to discover new, exclusive potato chip flavors created by amateur food developers. The winning flavor was Crispy Taco, which was made from fresh ingredients, including lettuce, tomato and cheese. Runner-up flavors were Everything Bagel with Cream Cheese chips and Wavy Fried Green Tomato chips.)

A continuing fashion in salty snacks is small, portable packaging. “There is a lot of demand for something portable; something that you can easily take with you,” said Mecklenburg.

On the Shelf

As a service to customers, McLane offers training, merchandising advice and sales data to the ZIP code level. When it comes to salty snacks, the company recommends giving better-for-you offerings a special section adjacent to regular snacks and adding appropriate signage.

“Recent research shows that placing

healthier items on or near the sales counter is an effective way to help customers grab something good to eat and get them on their way,” said Thaler.

“Displaying healthy items in multiple locations increases the likelihood that they’ll be seen by customers,” she added. “Place healthier items where a customer would normally look for indulgent options. Customer choice can then be maintained, while creating new, unanticipated options that are more likely to grab a shopper’s attention.”

Cross-merchandise chips with dips and salsas to increase basket size, and put some single-serve snacks in the foodservice area. The old standbys, such as promotional tie-ins and a clean, well-stocked snack section, are mandatory.

Future of Salty Snacks

“The key with the salty category is to balance healthy and indulgent while also balancing core items with innovation and several different flavor profiles that will excite the customer,” said Thaler.

“Keep an eye out for alternative snacks that have a halo of health around them,” said Mecklenburg. “For example, onion chips, seaweed snacks and chocolate-covered chickpeas that are salted. There is a lot of innovation around new types of healthier snacks—but the potato chip should not be neglected.”

Despite a few hiccups in the category’s recent performance, salty snacks remain essential to convenience stores. “Snacking as a trend is still increasing, and there is plenty of innovation,” said Mecklenburg. “There is a lot going on with store traffic, but the overall outlook for salty snacks is still positive.”

Pat Pape

Pat Pape worked in the convenience store industry for more than 20 years before becoming a writer. Her portfolio can be seen at patpape.wordpress.com.