KANSAS CITY — Variety is king in the world of today’s convenience stores, and snack food suppliers are working to keep up with the wide range of demands from consumers.
While snack companies still see success in sales of traditional products — potato chips, pretzels, tortilla chips, popcorn, nuts, pork rinds and meat snacks — the alternative snack categories continue to see growth. Carl Lee, chief executive officer of Snyder’s-Lance, Charlotte N.C., said the need for variety is being driven by the widening variety of consumers shopping in convenience stores.
“As a channel, convenience stores have traditionally been shopped by men primarily, but it’s being widened every day and is catering to more and more consumers and their needs,” Mr. Lee said.
|Carl Lee, chief executive officer of Snyder’s-Lance|
According to Nielsen research, in the 52 weeks ended July 5, alternative snacks saw 3.8% dollar sales growth over the same period last year in convenience stores. That follows last year’s increase of 11.8% in sales. Meanwhile, traditional snacks like packaged sweets and salty snacks saw steady growth with a 4.3% increase dollar sales each.
Candy and salty snacks continue to dominate with more than $12 billion in sales, according to Nielsen, while alternative snacks grew to $2.4 billion. Those figures illustrate Mr. Lee’s emphasis on the continued and increasingly important role convenience stores play in the snack world.
For Snyder’s-Lance, which introduced more than a half dozen new products this spring, launching innovative snack rollouts isn’t something the company takes lightly. Everything from location to packaging and marketing are meticulously thought out because the convenience store is often a testing ground for new products. Joey Shevlin, corporate communications program manager, Snyder’s-Lance, said consumers may see a new Snyder’s-Lance variety of Pretzel Pieces that they’ve never had, buy them, try it, like it and then remember during their next grocery store trip to stock up on the item for home. The goal is to increase impulse purchases and the frequency of walking down the snack aisle.
“It’s an interesting way for us to introduce items and flavors and offerings to consumers who may not otherwise try them when they go into grocery stores,” Mr. Shevlin explained.
Mr. Lee said creating variety, both in flavors and types of food, is where companies are finding success. He said the better-for-you trend may be seen everywhere with c-stores now offering fresh fruit and vegetables as on-the-go offerings. According to Nielsen, 35% of c-store channel shoppers over the 52 weeks ended Dec. 26, 2015, purchased fresh food options.
To continue to thrive in the c-store channel, Snyder’s-Lance has expanded into the premium snack category even more with the recent purchase of Diamond Foods. Through the acquisition, Snyder’s-Lance is able to provide consumers with more protein snacks through a variety of nuts. With Snyder’s-Lance’s lines of Kettle Brand chips, Cape Cod chips, Pop Secret popcorn, Emerald Nuts and Late July Organic chips, Mr. Lee said Snyder’s-Lance is meeting the demand for variety. The company is also positioning itself well to meet the trend of convenience stores supplying entire meals, he said.
“C-stores are really becoming more of a one-stop shop to provide more than what you would’ve traditionally purchased in a convenience store,” Mr. Lee said. “Snacks are still a big part of it, soft drinks are still a big part of it, candy is still a big part of it, but you see it expanding beyond that to full-service meals.”
To capitalize on the consumer trend of more fresh, fast-meal options, location and marketing is crucial. Marketing, Mr. Lee said, centers on packaging and labeling and has continued to follow the driving trend in the industry — convenience and portability.
“Most of our items are made for consumption on the go, so the portability and convenience of our items is very important,” he added.
By positioning their items in the front of the store, by the checkout line, or by the soda machines and food vendors, snack food companies are able to capitalize on the whole-meal trend by targeting pairings with other offerings.
“Pairing is an important piece because people can pick up a bag of Cape Cod chips, a soda and a meal,” Mr. Lee said.
Companies like Golden Flake, Birmingham, Ala., are seeing positive trends in the potato chip category this year, especially with its thin and crispy brands, outpacing the wavy or dip chips. The company, recently acquired by Utz Quality Foods, Inc., Hanover, Pa., introduced two flavors, Buffalo Ranch and Tangy Pickle BBQ in 2015, adding even more variety to convenience store shelves.
“These two products were a departure from our typical products,” Dave Jones, executive vice-president of operations, Golden Flake, said earlier this year. “They are exceeding expectations, and the flavors and package differentiation are a big part of this success.”
Last August, Utz partnered with Heluva Good! to offer dip-flavored chips to create a unique and fun experience for customers. The chips come in French onion, bacon horseradish and jalapeño cheddar to replicate the flavors of the dips.
“In the case of Heluva Good!, consumers can’t get enough,” said Kevin Brick, senior vice-president, sales and marketing, Utz Quality Food. “So, we have just launched a 9–oz size.”
The additional portion size option on the shelf meets the demand being set by consumers, largely millennials, who are looking for a quick, but tasty and fulfilling snack, Mr. Brick explained.
“Millennials are driving an increase in c-store sales given their nature to be more on-the-go and active, increasing the need for on-the-go snacking,” Mr. Brick said. “At the same time, the millennials are beginning an even larger shift in demand for better-for-you offerings.”
Convenience store companies also are offering more variety, and in turn attracting new customers. Companies like QuikTrip, Sheetz and more are offering meals made in house at almost all hours of the day. For snack food suppliers, the variety of food now found at neighborhood gas stations and convenience stores means more possibilities, explained Jeff Martin, executive vice-president, sales and marketing, Utz.
“As c-stores become an even greater food player, in some cases focused on the quick-service oriented consumer, we have an opportunity to have our products in-play supporting their food and beverage strategy,” Mr. Martin said.With the sales trends continuing to grow for alternative and traditional snacks and a consumer group of millennials that isn’t going anywhere, the leading snack food producers will continue to look for ways to broaden their offerings in the essential convenience store channel.