At the Corner Post convenience store in Watford City, North Dakota, general manager Shasta Fuller sees the impact that healthier-eating habits are having on the shop’s snack food sales. “Seeds, seeds, seeds,” she said of products that are thriving as consumers seek to add more protein to their diets. Yet, while sales of protein and other nutrient-dense snacks, such as sunflower seeds and pistachio nuts, are on the rise at the Corner Post, Fuller noted, “Other snacks aren’t decreasing. We’ve lost no sales of high-carb snacks.”
Indeed, other retailers and vendors verify the trends Fuller is seeing: Consumers are increasingly demanding healthier and cleaner snack options, but they’re not looking to give up their indulgent treats anytime soon. And while the COVID-19 outbreak and the resulting slowdown in c-store foot traffic has adversely impacted sales of snack foods in the channel this year, there’s widespread optimism that there’s a bright future ahead for the products.
Mondelez International’s State of Snacking™: 2019 Global Consumer Snacking Trends Study found that the average American now eats more snacks than meals on a given day as “the appetite for smaller bites grows.” Moreover, the study found that fans of snacks in the United States “are seeking access to both healthy and indulgent options, depending on the moment of need.”
Other snack food suppliers agree. “It’s great to see consumers eating healthy,” said a spokesman for McKee Foods, the marketer of the Little Debbie line of packaged sweet snacks. “But even the healthiest of eaters enjoys a treat from time to time.” Bob Clark, vice president, marketing, at Herr Foods, said better-for-you salty snacks are appearing more and more in the direct-shipped peggable sections of c-stores. “The result is usually incremental to sales,” he noted, “although they don’t sell at the same velocity as indulgent snacks.”
Eric Patterson, merchandising manager at the Beacon & Bridge Market chain, with 25 stores in Michigan, said that while he’s increasingly seeing customers reading ingredient labels on snack foods—including “blue-collar workers looking for a protein boost”—the better-for-you trend has been slow to gain traction. “Our customers are still buying snacks as a means to fill in the space between meals,” Patterson remarked. Still, most of the stores feature four-foot sections of BFY snacks, including products like snack pea crisps, jerky and meat bars.
Meat sticks have been strong movers, as have protein and health bars, such as Clif, ONE and Quest.
Flavors Rule for Salty Snacks
Salty snacks remain one of the top in-store categories for c-stores. Within the category, emerging “other salty snacks,” including pork rinds and vegetable chips, appear to be on-trend, according to Jayme Gough, NACS analyst. “That speaks to the innovation that’s happening within the salty snacks segment,” she said, pointing to growing demand for products like chickpea puffs and seaweed chips.
New and trendy international flavors are also bringing renewed interest to the category. “Everyone wants spicy,” said Kati Dickson, manager of County Line c-store in Wiley, Colorado, citing products like Lay’s Flamin’ Hot Dill Pickle and Kettle Cooked Flamin’ Hot potato chips, which have been performing well recently. “Salty snacks are a big deal in our store,” Dickson noted. “We sell everything from plain Lay’s to Doritos to Tostito’s Salsa Verde.” To merchandise, County Line features a shelf by the checkout counter that holds up to 50 single-serving bags. Patterson agrees that trendy “non-traditional” flavors are helping to drive sales of salty snacks. “Siracha is huge,” he said, as well as kimchi and Korean barbeque flavored chips.
Within the packaged sweet snacks category, snack cakes and breakfast pastries have posted the largest volume gains in c-stores in recent years, according to Scott Ward, group vice president, convenience, at Hostess Brands. The McKee spokesman reported that seasonal and LTO baked sweet goods, such as Little Debbie Christmas tree and Be My Valentine cakes, have been resonating in c-stores. Fuller and Patterson, meanwhile, both note that consumers are trading up in their packaged sweet snacks selections, and that’s providing improved margins. “We’re seeing good growth on packaged sweet snacks,” the Beacon & Bridge executive revealed, and with the emphasis on premium brands, “we’ve attracted new customers.”
Alternative snacks—driven by protein-packed items such as meat snacks and protein bars—have been gaining share in c-stores. “Alternative snacks continue to be a strong category for us,” said Peter Garrett, president of Volta Oil, the operator of Rapid Refill c-stores in Massachusetts, New Hampshire and Rhode Island. “Meat sticks have been strong movers, as have protein and health bars, such as Clif, ONE and Quest.”
Within meat snacks particularly, “there’s been a lot of innovation,” remarked Gough. And that innovation has stretched beyond just flavors to ingredients, too, she noted, pointing to the increased use of chicken, turkey and vegetables.
C-store operators report that locally produced meat snacks are growing in popularity. “While Jack Link’s remains the workhorse, we’re getting good margins on local and regional products, like those from Little Town Jerky Co.,” based in Falmouth, Michigan, Patterson said. “We’re able to offer fresh jerky, including from cattle and wild game, all produced in Michigan.” In Colorado, meanwhile, No Man’s Land Beef Jerky is so popular, “we can’t keep it on the shelves,” Dickson reported. And among other alternative snacks, protein bars are “big movers” at the Corner Post in North Dakota, according to Fuller, with Quest and Clif bar as top performers.
Like salty snacks, candy is a key in-store category for c-stores, and retailers rely on the impulse and add-on-value that candy sales bring to their stores. The segment has been “pretty healthy” for Beacon & Bridge, Patterson said, as the chain has put an emphasis on king-size, pegged and take-home candy packages and fewer promotions on standard-size bars. Lance Smith, vice president, industry affairs and customer strategy at Promotion in Motion, marketers of products like Welch’s Fruit Snacks and Original Gummi FunMix, said the category is seeing a proliferation of flavors. “Tropical flavors have been trending, along with sour, and hot and spicy formats,” he remarked. “C-store shoppers love exploring new products and tend to be variety seekers, looking frequently for new products. They also look toward snacks as a source of fun.”
Basket Builders
Convenience retailers and snack food vendors agree that while the products can drive traffic as well as impulse sales, effective merchandising and marketing tactics are great enhancers. Hostess recommends cross-promotions and bundling offers at the register, along with secondary placements, while McKee suggests using displays and endcaps to drive sales for sweet snacks.
At Rapid Refill, snacks figure prominently in the chain’s loyalty program, which includes an energy bar club, “two-for” deals and other monthly promotions, Garrett said. The offers are supported digitally via the chain’s app, website and email blasts, and in-store and at the pump through GSTV executions.
Everyone wants spicy.
Beacon & Bridge and the Corner Post, meanwhile, focus on marketing new snack products. “We piggybacked the introduction of Gardetto’s Crisps from General Mills with a buy-one, get-one promotion,” Patterson noted, while Corner Post reserves a display rack by the front door for new snack products.
Despite the rewards that merchandising and marketing attention can bring to snack foods, the categories have their share of challenges for convenience retailers. Clark from Herr Foods and Smith from Promotion in Motion point to competition from other trade channels. In addition, space constraints weigh heavy. “C-stores need enough space to customize and offer regional brands and locally popular flavors, while also offering the big brands that drive traffic,” Clark noted. Indeed, Patterson, Garrett and Dickson all agree that making room for new snack entries is an ongoing battle.
And most recently, the COVID-19 outbreak and sanctions to control it have hampered store traffic and resulting snack food purchases. However, retailers and vendors report that large packs—particularly of salty snacks—have benefitted from consumer stock ups. “We’ve doubled down. We’ve added ancillary space through temporary displays and endcaps,” Patterson said of take-home packages. But most expect that consumer buying habits spurred on by the pandemic will gradually revert back with a recovery. “Chocolate, non-chocolate candy, non-chocolate chewy candy and fruit snacks are well positioned to rebound post-crisis,” remarked Smith, “as spending during and after economic downturns shows consumers gravitate toward comfort and personal indulgences.”
With the right selection and merchandising support, snacks—whether healthy or indulgent—will continue to drive traffic and margins for c-stores. “Consumers love snack products, and snacks can be a basket builder for c-store operators,” said the McKee spokesman. And because most snacks are impulse purchases, it’s important for retailers to merchandise the products in high-traffic areas, he continued.
Despite the competition from other channels, Promotion in Motion’s Smith said c-stores are the ideal venue for snack-loving consumers. Extended hours, convenient locations and speedy service “place convenience operators in the enviable position of capturing more on-the-go snacking consumers,” he said.