Salty snacks have been a valued margin contributor to convenience stores for years. While the category has seen some disruption in the wake of the COVID-19 pandemic, there’s no doubt that c-stores that adhere to tried-and-true ordering and merchandising practices will be well positioned to capitalize when store traffic picks up and prior consumer shopping habits return post pandemic.

“Salty snacks continues to be one of the most important categories in the convenience-store channel and was demonstrating healthy momentum heading into 2020 before COVID,” remarked Jordan Beazley, associate manager, consumer insights and market intelligence at General Mills Convenience & Foodservice, marketer of brands including Chex Mix, Bugles and Gardetto’s. “The onset of the pandemic put a big dent into c-store traffic, and even as stay-at-home restrictions eased, consumers were still limiting trips and shopping more for at-home and less for on-the-go,” Beazley continued, resulting in increased demand for large and multi-pack servings, products some c-stores typically don’t offer.

Average in-store category sales rose 1.6% in 2019 to $79,681, from $78,427 in the year prior, according to the NACS State of the Industry Report of 2019 Data, making salty snacks the seventh-largest in-store sales contributor. And the category is a profitable one for c-stores. Salty snacks was the sixth-largest contributor of in-store gross margins in 2019, with 5.15% of gross margin contribution.

“The category has been showing continual year-over-year growth,” said Jayme Gough, NACS research manager. She attributed the performance to “so much innovation, including new flavors, package types and inroads by marketers to tap into different emerging health trends.” Indeed, among the subcategories to post sales growth in 2019 were tortilla chips, puffed cheese, nuts and seeds, and “other” salty snacks, which include products like puffed onions, pork rinds, vegetable chips and chickpea puffs. Potato chips continued to lead the category, accounting for 29% of c-store salty snacks sales, according to NACS data, down from 30% in 2018.

There’s an interest in products that are perceived as healthier, such as tortilla chips.

Pandemic Pause

While complete 2020 data weren’t available at press time, there were indications that salty snacks sales in c-stores—the category’s second-largest trade channel—were challenged as the pandemic raged on. Monthly NACS CSX data indicated “a notable sales dip at the end of March into April, when many stay-at-home orders were in place,” Gough noted, with April sales even falling below that of 2017. By June, however, with a bit of a return to travel, category sales outpaced those of the year prior. Among subcategories, potato chips appeared to be the most severely impacted during the first wave of the virus, with tortilla chips showing the smallest decline, Gough remarked.

Tom Donigan, co-founder, Field Trip Snacks, marketer of protein snacks such as pork rinds, and meat snacks like jerky, said grocery sales of his products dropped as impulse purchases receded. “Consumers made targeted runs to grocery stores in 2020,” he explained. “They shopped with lists, so there wasn’t much impulse buying.” In c-stores, however, “people were still buying on impulse,” Donigan said, and the company’s sales to its convenience distributors remained stable. He added that Field Trip saw a big shift to online sales last year, balancing out losses in other channels.

Elsa Douglas, manager of OK One Stop in Ardmore, Oklahoma, confirmed a falloff in salty snack sales at her store last year, largely due to slowed in-store traffic. “Many of the kids are out of school, so we don’t have parents running in looking to pick up bags of chips to go with lunch,” she explained.

Other convenience retailers reported an uptick in salty snack sales in 2020 in spite of the pandemic. Lynette Stoudt, owner of Tramway Market in Stateline, Nevada, said many of her customers have been indulging in snacks as virus fears permeated. “We’re selling more salty snacks, ice cream and candy,” she remarked. “People are home more and hunkering down.” Among the salty snacks that performed well at Stoudt’s store was Kraft Foods’ Corn Nuts.

DeAnn Tracy, owner of Tank-n-Tummy in Cleveland, Oklahoma, said category sales have remained strong, both before and during the pandemic. “We’ve been really busy during the pandemic,” Tracy said, noting that the rural store has proved appealing to local senior citizens forgoing trips to larger shops. Tank-n-Tummy devotes one-and-a-half rows to single-serve and large-size packs of salty snacks, with top-selling brands including Chex Mix, Cheetos and Gardetto’s.

Those stores that separate better-for-you salty snacks from traditional items may be losing out on upselling opportunities.

Better-for-You Impact

As with other in-store categories, salty snacks have been increasingly impacted by better-for-you eating habits. “There’s an interest in products that are perceived as healthier, such as tortilla chips,” Gough remarked. That’s been the case at Wink’s Convenience store in Cape Giradeau, Missouri. According to manager Dawn Lucas, “We sell vegetable straws and baked chips, and we go through them.”

Similarly, at OK One Stop, Douglas noted that since the pandemic began, “People are eating really healthy.” Rather than bags of potato chips, customers are leaning toward items like packaged nuts and Quest protein chips, she said. Even a discount on a bag of chips (99 cents versus the typical $1.89) with the purchase of a sandwich hasn’t persuaded customers. “Most buy the sandwich without the chips,” Douglas said.

Growing consumer interest in low-carbohydrate/high-fat diets such as keto has been a boon for the salty snacks marketed by Field Trip. “People have been gravitating to the keto diet. They’ve been excited about the drastic effect of the diet on their weight and health,” Donigan reported. No-carb pork rinds are among the functional salty snacks benefiting from the keto approach.

Effective assortment and merchandising of salty snacks are important to driving category sales, whether it’s during a health crisis or less troubling times. Gough pointed to special in-store offers such as lunch. Promotions, like buy one, get one, are also “great programs,” she said. Jessica McMillan, marketing manager at General Mills Convenience, added, “Since salty snacks are typically an impulse buy and eaten on the go, we recommend that retailers offer a variety of salty snacks en route to or near the register to capture incremental impulse purchases. Cross-promoting with high-traffic areas like the beverage cooler is another great way to capitalize on in-store traffic and build a higher basket ring.” But most important, according to McMillan, is that retailers offer the right assortment of products, including forms and flavors to meet all of their customers’ needs. She identified consumer need states as “healthy, enhanced experience, sweet and salty, and flavor craving.”

Innovation is another tactic helping to drive interest in the salty snacks category. According to Gough, innovation can include new products or packaging or simpler variations, such as new flavors. At General Mills, “We think it’s important to leverage the nostalgia and familiarity of our brands that consumers know and trust, but give them a way to experience these products in new ways,” McMillan said. With spicy flavors continuing to drive growth in salty snacks, for example, the company is adding variations like Chili Cheese Bugles, Jalapeno Chili Chex Mix MAX’D and Spicy Italian Gardetto’s. General Mills is also introducing Muddy Buddies Pretzel Bites, a sweet and salty snack, featuring dipped pretzels with a powered-sugar coating.

Balancing Act

While innovation plays an important role in bringing variety to the salty snacks category, McMillan noted, “Core brands still drive two times sales and over four times profit of non-core brands, so ensuring top-turning brands are on the shelf is key.” When setting shelves, General Mills recommends first grouping by segment (chips, pretzels, snack mixes, seeds, etc.), followed by brand and then by flavor. Field Trip’s Donigan, meanwhile, suggested that BFY salty snacks be included in traditional shelf sets. “Those stores that separate better-for-you salty snacks from traditional items may be losing out on upselling opportunities,” he explained. “With consumers so interested in running in and out of stores today, they may not venture into a separate section.” He even recommended that retailers consider merchandising with buzzwords. “Salty snacks can have a negative image for millennials,” Donigan remarked, while “low-carb snacks” may be a better modifier for some BFY items.

With proper merchandising and assortment practices in place, marketers and retailers are confident that the salty snacks category will bounce back post pandemic. “When things return to normal and kids are back in school regularly,” said Douglas, “strong sales of salty snacks in convenience stores will return.”

The Power of CSX Data

CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or [email protected] for a complimentary executive walkthough.