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Alternative Snacks Rock

By Traci Carneal

What alternative rock has done for the music world, alternative snacks are doing for the snack cat­egory — challenging the status quo. Op­portunities are abundant for retailers to capitalize on consumers’ increasing appetite for snacks that are flavorful, more organically produced, convenient and nutritious.

As defined by NACS, alternative snacks include all types of bars — energy, health, nutrition, diet and cereal — meat snacks, trail mix, yogurt- and chocolate-covered pretzels and raisins, granola and fruit snacks. Meat snacks, energy bars and granola/fruit snacks lead the catego­ry in terms of percent of store sales and dollar sales, according to recent NACS State of the Industry (SOI) data.

According to the NACS CSX database and recently released 2011 SOI data, the category saw average sales of $1,344 per store per month in 2011. During that same time frame, gross margin for the category averaged 40.5% and gross mar­gin dollars reached an average of $544.

Nielsen Syndicated data shows that the bar category as a whole totaled $256 million in sales for c-stores in the 52 weeks ending December 24, 2011. The energy bar segment grew by more than $14 million, up 22.8% over the previous 52 weeks. Healthy snack bars, declining since 2009, showed a small rebound for the same period, with a 5.2% rise in sales. Weight loss and diet bars were up 13%. The largest category in c-store bar sales is the high protein bar segment, which grew by more than $13 million and reached $103 million in sales.

Outside The Box
Snacking in America is likely to only increase, according to Mathew Man­deltort, senior consultant for Technomic Inc. Time constraints and con­sumer demands for smaller portions and convenient ways to eat on the run have made snacking around-the-clock routine — and a perfect opportunity for alternative snacks to gain traction.

 

 

 

Part of alternative snack success involves changing retailer mindsets. Mandeltort encourages operators to think outside the traditional daypart.

"Don’t limit yourself to I can only serve lunch from noon to 2 pm or snacks after breakfast or lunch," he advised. "These days, consumers will eat anything at any time; offer as many options as pos­sible and as often as possible."

Karin Thrift, director of sales at Clif Bar & Company, sees a lot of purchas­es made during the breakfast daypart. "We believe the consumer is buying the product on the way to work either for immediate consumption or a mid­morning snack," she said.

Clearly the definition of a snack has evolved substantially. Nearly any con­sumable can be a snack if that is what the consumer craves at any particular moment. A meat stick or energy bar for mid-morning munchies? Fruit snacks for an after-school treat? You bet. Al­ternative snacks really do present an ideal product for any snack occasion.

To succeed, however, these prod­ucts must meet the taste and price demands of convenience consumers, while vying for limited shelf space in the c-store footprint.

Raising The Bar
Thrift said one of the biggest trends in bar snacks is a move toward flavor in­novation and variety, as well as sweet and nutty tastes. Thrift also said that protein is still "king" in the conve­nience world, and Clif Bar is testing its high protein bar for women, LUNA Protein, with some chains.

Taste and convenience reign when it comes to alternative snack consump­tion. "When I first started working for Clif Bar, a buyer told me that a com­petitive product tasted so bad it had to be good for you!" Thrift said. "Now consumers are demanding that the healthy bars be portable and taste good as well as deliver on their promise for nutrition, energy, protein or any other health benefit."

Shoppers rate flavor as highly im­portant when it comes to energy bars, according to Kelly Fulford, category development manager at General Mills Convenience. "They plan their stop to the energy bar section as a 'destination’ but often approach their decision mak­ing either through habit or by asking themselves, "What flavor am I in the mood for today?"

Fulford added that hot flavors for en­ergy bars are peanut butter, chocolate peanut butter, chocolate chip, caramel and strawberry. Vanilla, white chocolate macadamia nut and chocolate mint are emerging as important flavors as well.

The need for energy continues to be a hot trend in convenience. A recent Gen­eral Mills study found that 44% of shoppers list "energize myself" among the top three reasons for visiting a conve­nience store, over all other available food outlets including QSR, drug, grocery, etc. Energy is clearly an emerging growth area for impulse purchases.

"Consumers purchase and consume bars across all dayparts, but choose which type of bar based on their needs," Fulford said. The majority of bars are purchased for morning consumption (for breakfast or a morning snack), making it important for retailers to ensure the bar set is located in a high morning traffic area — for instance, adjacent to the coffee bar.

Consumers think of bars according to the type of bar (i.e. performance, nutrition, grain, treat) and the specific benefits it provides them (protein, satiety, better-for-me, reward), she said.

"When c-store bar shoppers decide what to buy, they consider 'bar type’ first and brand second," Fulford continued. "This means retailers can arrange their bar set as such — group like items together and then brand blocks within the set."

Meating Snackers’ Needs
It’s clear that meat snacks are driving the growth of the alternative snack category — from the early days of basic beef jerky, these highly portable alternative snacks have made a comeback. Manufacturers are capitalizing on the trends by developing innova­tive products that spotlight nutrition, natural ingredients, flavor and portion control.

Last year Oberto took a leap of faith on consumer insights, re­introduced its entire jerky line as "all natural." According to Kap Pitarys, se­nior brand manager at Oberto Brands, are seeking simpler and more nutritious ways to get their snacks all food categories. "We have seen sales of our jerky items increase 62% in the convenience segment since we reformulated our products to be all natural, which basically means mini­mally processed, no preservatives added and no artificial ingredients," she said.

Spicy tastes are another hot trend meat snacks, noted Pitarys. In fact, spicy jerky flavors have led sales of all jerky products in the last 12 weeks. In response to the spicy trend, Oberto launched a Spicy Sweet Beef Jerky in January 2011, combining the sweet and spicy flavors consumers are craving to satisfy all of their taste buds at one time.

Will Alternatives Go Platinum?
If alternative snacks show so much promise and consumers want them, why aren’t retailers expanding their offerings and trying more new products? The main reason seems to be limited shelf space. It’s a challenge for category managers who want to expand offer­ings to include new items but can’t take space away from traditional profit mak­ers such as candy and baked sweets.

For Sheri Lauckner, store manager at Bjornson’s Oil in Devil’s Lake, North Dakota, limited shelf space is basically the only reason she hasn’t taken on more alternative snack items. "We simply don’t have enough room," she said. The only two items she carries right now are Snickers Energy Bar and Wheaties Fuel by General Mills. In both cases, her supplier provided the products with a secondary display. "If I can put the new item on a counter display or clip strip, I would consider taking on more of these types of snacks," she said.

Pitarys agrees, but noted that re­tailers are still looking for different and unique ways to capture consumer impulse. "Over 50% of purchases are made from secondary displays," she said. "These are unplanned sales€¦ bundling is a great way to sell comple­mentary products at the same time, and countertop or clip strip displays help the operators who don’t have a lot of space to work with."

Brad Borkhuis, general manager/ CEO of Wholesale Foods & Conve­nience Distributors, has mixed feel­ings about the potential for alternative snacks in the convenience channel. He said consumer interest in healthier, more natural options is evident in re­tail grocery store sales and offerings at restaurants. But "until retailers are willing to commit valuable space to committing to this unknown, it will be tough sledding, but this is the way it is all trending and certain markets would do very well embracing this idea as it has a loyal customer base."

According to Clif Bar’s Thrift, the biggest difference in marketing the bar category in convenience versus other channels is "mostly in the amount of space we have to work with. Grocery, natural and mass all have large sets and are able to stock a wide variety of flavors and pack types. In conve­nience, we must clearly focus on the top sellers."

Traci Carneal is a food industry freelance writer based in Annapolis, Maryland.