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The Snack Attack

Jerky, clean-label food bars and other better-for-you alternative snacks gain a following at c-stores.

​By Carol Angrisani

Demand for protein-rich, satiating and portable foods has boosted sales in the alternative snacks category. It’s evident in the numbers: Alternative snacks generated annual gross margins of $8,368 per store in 2014, a 12% increase from 2013, according to the NACS State of the Industry Report of 2014 Data. (2015 data will be released at this year’s NACS State of the Industry Summit, taking place this month.)

According to NACS data, annual store sales of alternative snacks reached $19,206 in 2014, an 8.1% increase from 2013. Alternative snacks accounted for 1.8% of in-store sales in 2014, a slight increase from 2013. The category placed No. 8 on the Top 10 list of category sales ranked by gross margin contribution.

The strong performance of the meat snacks subcategory greatly contributed to the overall category’s strong gains. Accounting for 60% of alternative snack sales, meat snacks witnessed sales and unit growth of 11.9% and 6.8% in 2014, respectively.

“We’ve had dramatic, double-digit sales increases in meat snacks over last few years,” said Tim Cote, vice president of marketing at Plaid Pantry, a Portland, Oregon-based chain of more than 110 stores. The meat snacks subcategory has benefited from innovations that produced a softer-chewing product with simple, easy-to-understand ingredient lists, according to Cote. “The brands that have gained the most share are those that have cleaned up their ingredients lists,” said Cote. “Instead of 12 to 13 ingredients, they’re now down to about six.”

A sign that the subcategory’s future looks bright came last year with The Hershey Company’s acquisition of Krave, the maker of artisanal jerky. The deal marks Hershey’s first purchase outside of candy.

Protein-Packed, Flavor Rich
The popularity of protein is the primary reason consumers are eating more meat snacks. About 24% of adults say they look for protein on nutrition labels and 50% of adults say the best source is animal protein, according to research firm the NPD Group. “People want something to carry them over to the next meal,” said Darren Seifer, a food and beverage analyst at NPD Group.

Meat snacks fit the bill—one ounce of beef or turkey jerky can have as much as 13 grams of protein. Additionally, meat snacks are typically low in fat and sugar and are portable. And while beef is still the leading type of jerky, rising beef prices have created opportunities for other types of protein, including turkey, pork and salmon. Jack Link’s now markets beef, pork, turkey and, most recently, chicken jerky— which is fat-free and boasts 11 grams of protein and just 80 calories. To emphasize the protein content of its products, Jack Link’s refreshed its meat snacks brand last year with an updated logo that identifies the products as “protein snacks.”

Catering to the increasing number of consumers who buy meat snacks, Jack Link’s even plans to open a 78,000-square-foot center in Minneapolis that will include a branded retail store, a bar and restaurant, new product innovation center and office space.
Along with their high protein content, meat snacks cater to today’s consumers with on-trend flavor combinations such as Jack Link’s Flame-Grilled Korean BBQ Pork Jerky. Gourmet flavors are also taking hold. It’s no surprise that Krave, which was founded by a California winemaker, comes in flavors such as Chardonnay Thyme Turkey Jerky. Other Krave flavors include Basil Citrus Turkey, Garlic Chili Pepper Beef and Black Cherry Barbecue Pork. Last year, ConAgra’s Slim Jim brand introduced a line of regional flavors, including Cali Taco, Philly Cheesesteak and New York Buffalo.

Merchandising Tips
There have been so many meat snack introductions that c-store retailers need to streamline their assortment, advised Steven Montgomery, president of consulting firm B2B Solutions in Lake Forest, Illinois. “The biggest mistake we see with c-store retailers trying to capitalize on the growth of meat snacks is having too many suppliers and displays,” he said.

Since most suppliers want their product displayed in its own unique case, having too many of them means meat snacks end up being displayed in multiple locations around the store. Retailers should carefully analyze which brands best meet the needs of their specific shoppers, Montgomery recommends.

Manufacturers are heavily promoting the subcategory with buy one, get one free offers, contests and giveaways. Many of Slim Jim’s broader national marketing initiatives have been brought to life in c-stores, according to Jill Dexter, brand director at ConAgra Foods. For example, ConAgra donates Slim Jim products to the country’s military troops, and uses in-store Slim Jim/USO-branded shippers to encourage continued support of the nation’s military personnel.

Separately, in a partnership with AMC’s “The Walking Dead” television show, the company launched co-branded Slim Jim packaging and displays featuring a sweepstakes to win prizes.

Growing Appeal
While meat snacks are especially appealing to millennials, plenty of other demographic groups are shopping the subcategory as well. The female shopper, for instance, continues to increase consumption of meat snacks because of their portability and low/no fat options. “It was not long ago when most consumers thought of jerky as a sodium-filled, nitrate-laden meat snack consumed predominantly by males,” said Rusti Porter, Krave’s vice president of marketing.

That’s no longer the case thanks to product innovations, the protein craze, the surge of intense workout and nutritional programs like CrossFit and Paleo, and interest in gourmet and global flavors, Porter added.

Raising the Bar
While meat snacks remain the major driver of the alternative snacks category, savory flavors and cleaner ingredients have attracted new consumers to the health/energy/protein bar subcategory. “They are no longer just for the dieter or the workout guy on his way home from the gym,” said Danna Huskey, category manager at E-Z Mart, Texarkana, Texas.

There’s now a bar for nearly every kind of shopper, as manufacturers roll out reduced-sugar, lower- calorie, gluten-free, high-protein and many other types of better-for-you bars, Huskey said.

The subcategory represents 27.4% of alternative snack purchases. Sales increased by 4.6% and units increased by 2.8% from 2013 to 2014, according to the NACS State of the Industry Report of 2014 Data. The latest trend is the launch of bars with just a few whole ingredients, like fruit, nuts and honey. Take Kellogg’s Special K Chewy Nut Bars in chocolate almond and cranberry almond. They are made with simple ingredients like roasted whole almonds, oven-roasted peanuts, chocolate chunks and cranberries.

Kellogg is also seeing interest with protein bars that showcase a nut- or plant-based protein profile, said Abby Panfil, Kellogg’s director of retail sales strategy and planning. These include ingredients like seeds, pea crisps, oats, buckwheat and millet. Cranberries and super fruits such as acai berries are also appearing.

Food bars with premium, natural ingredients, complete with fiber and low net carbs, help consumers feel good about their purchases, noted Brad Charron, senior vice president of sports and active nutrition at NBTY, the company that markets Pure Protein, MET-Rx and Balance Bar. NBTY plans to launch new Pure Protein Plus bars in May that have real food inclusions and positive functional nutrition.

Clif Bar & Co. recently reduced the amount of sugar in its recipe to address consumers’ healthy snacking needs. Luna bars now have 25% less sugar, said Karin Thrift, Clif Bar’s director of sales.

Manufacturers are also tapping into the latest flavor trends, including caramel and sea salt, as well as spicy bars. General Mills Convenience recently released the Nature Valley Sweet & Spicy Bar, which contains cayenne pepper. In addition, General Mills’ Food Should Taste Good bars incorporate savory and ethnic flavors like Macadamia Chai and Hazelnut Sea Salt.

The new slate of food bars has prompted an increasing number of c-stores to create secondary locations on endcaps and in-line sets. Those sections include Kind bars and other food bars that contain whole nuts and fruits as the main ingredients, along with fruit snacks, natural chips and popcorn, according to Chuck Engle, Kind’s vice president of sales. “C-stores will benefit from carrying a larger variety of food bars because it will allow them to better meet the changing consumer needs,” Engle said.

“Other” Snacks
Along with meat snacks and health/energy/protein bars, the alternative snacks category includes granola/fruit snacks and “other” snacks, like trail mixes and rice cakes.

While these two subcategories account for just 12.8% of combined alternative snacks contribution, they both saw strong sales and unit gains in 2014, thanks to increased demand for healthier snacks. The “other” subcategory witnessed a 13.4% sales growth and an 11.6% rise in units, while granola/fruit snacks experienced sales and unit increases of 9.9% and 7.0%, respectively.

The “other” category remains a small portion of alternative snack because c-stores are not typically seen as a destination for that kind of product, according to Stephan Mecklenburg, research coordinator at NACS. “Most consumers could expect to find jerky and protein bars of some kind, but may not necessarily expect to find granola in a c-store, and thus not go looking for it, even if it is stocked,” Mecklenburg said.

Meanwhile, the market for healthy and natural products is predicted to remain strong, so the alternative snacks category should continue to flourish, especially meat snacks and health/energy bars, according to Mecklenburg.

Marketers are likely to respond to the demand with additional new flavor profiles, packaging strategies, and brands. “I see demand for these types of products remaining strong, especially as on-the-go consumers continue to demand substantial meal replacements,” said Mecklenburg. “The convenience of our industry can’t be beat.”

Carol Angrisani is a New York-based writer who has been covering the food and beverage industries for more than 20 years. Visit her on Twitter at @carolangrisani1.