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With impulse munching reportedly rising in these recessionary times, it's good to be a snack right now, and alternative snacks are no exception.
Dominated in sales volume by meat snacks (making up roughly two-thirds of the category), alternative snacks experienced 3.3-percent sales growth on a per store basis in the convenience channel last year, according to the 2009 Convenience Store News Industry Report. The category also grew in gross margin dollars contributed per store by 5.9 percent, and average in-store gross margin for alternative snacks rose 0.87 points last year to 35.01 percent.
New product introductions are another positive indicator for the category, according to the report. Even though only 637 new alternative snacks were introduced in the 12 months ending in April (compared to packaged beverages' 2,416 new SKUs), the new UPCs represented 18.3 percent of the total products in the alternative snack category, which was higher than the 18.1 percent new beverage SKUs represented in that total category. The only categories with higher percentages of new product UPCs were candy/gum (19.3 percent) and salty snacks (19.1 percent).
Looking at the first six months of this year, the positive sales trends are holding up for the category, specifically for granola/yogurt bars and meat snacks, according to The Nielsen Co.'s latest c-store data. Granola and yogurt bars were up 10.1 percent in dollar sales for the six months ended July 11, 2009, and meat snacks were up 2.3 percent for the same time period. The total category of alternative snacks also managed to be up 2 percent in dollar sales.
C-store retailers are watching their customers turning to alternative snacks for substantial reasons, they report.
"The meat snack category goes with the better-for-you trend in some regards. It's a more substantial snack," said David Stukus, category manager with TravelCenters of America, based in Westlake, Ohio, with 234 stores.
Stukus observed a similar trend in health/energy bars. "We saw double-digit growth recently in energy bars, not because people wanted to get healthier, but because the big, substantial bars, for only $3.49 and $3.79, are a full meal replacement."
Danna Huskey, category manager at E-Z Mart, based in Texarkana, Texas, with 298 stores, agreed that some customers are turning to alternative snacks as meal replacements. "The tradeoff factor is some customers are saying they can go without a candy bar today in place of a more filling granola bar," she said.
With some alternative snacks, such as meat snacks, E-Z Mart is using bundling promotions with fountain drinks to play into the meal replacement trend, Huskey noted. And the downsizing of meat snack packaging is for the most part being well received by convenience stores. However, Stukus generally prefers bigger sizes for his truck stop customers, but the one downsize change he does like is the beef jerky bags "because the height allowed us to bring in more variety," he stated.
For BP's ampm, there is "a movement towards spicier, more full-flavor meat snacks," said Jim Hachtel, category manager for the chain of more than 1,200 stores.
From a c-store wholesaler perspective, Lance Smith, category manager at McLane Co. observed, "The packaging reduction allowed for greater category management. Now we can get second-tier and private label SKUs in there. There's more merchandising space, less air in the bag and hopefully more consumer satisfaction."
Since being introduced in 2008, ampm's proprietary Shadow Hills meat snacks are performing very well, according to Hachtel. "Large and small bags are selling well at an average of four bags a week per store, which exceeds the national brands," he stated.
The chain also has Shadow Hills Nuts & Seeds, which are "selling well at an average of 1.6 bags a week per store, which is equal to the national brands," according to Hachtel. He added the company plans to continue to introduce proprietary snack products throughout the coming year.
See our exclusive "Slim Jim Picks Up After Plant Tragedy," at www.CSNews.com.