Send Salty Snack Sales Surging

Americans love to snack. And when looking for something to munch, they’re increasingly turning to potato chips, pretzels, tortilla chips and more. During the 52 weeks ending Jan. 26, dollar and unit sales rose in all overall salty snacks subcategories except pork rinds, according to data from Chicago-based Information Resources Inc.

However, things didn’t look as bright on the store brand side during the same time period. With the exception of pretzels and ready-to-eat popcorn/caramel corn, all store brand salty snacks subcategories saw a decline in unit sales, the data show.

But retailers have opportunities to grow sales across the store brand salty snacks category. After all, a little innovation can go a long way.

A national brand approach

And many retailers are getting pretty innovative with their salty snacks — thinking more like consumer packaged goods companies when developing products, says Jeff Roberts, marketing manager with City of Industry, Calif.-based Snak King Corp.

“It’s no longer just regular tortilla chips and potato chips,” adds Joe Papiri, vice president of sales and marketing, Snak King. “We’re going into a lot of new, emerging items. We’ve got accounts that embrace it and say, ‘Yeah, I’d like to do that first.’”

Randy Johnson, vice president of sales with Perham, Minn.-headquartered Barrel O’ Fun Snack Foods, says he’s seeing strong demand for products with ethnic flavor profiles and better-for-you ingredients.

“With better-for-you products, we have seen tremendous growth in the natural and organic lines, retailers requesting a full serving of vegetables included in the base, and inclusions of ancient grains such as chia, quinoa and flax,” he states.

Brooks Brown, national sales manager with Marion, Ohio-based Wyandot Inc., also sees strong growth opportunity in better-for-you options. Today’s consumers are snacking more than once per day, so providing them with better-for-you salty snacks could help alleviate any guilt that comes with snacking.

“Nearly two-thirds of consumers say that it is very or somewhat important that the snacks they eat are healthy, which is encouraging manufacturers to develop healthier options,” says “Category Insight: Salty Snacks, Meat Snacks and Popcorn,” a March 2014 report from global market research firm Mintel.

Popped crisps — potato and corn crisps that are air-popped via a mixture of heat and pressure — are one area of growth in better-for-you salty snacks, the report states, noting that 30 percent of Americans purchase them for their low fat and calorie content. And many retailers have added popped crisps to their own-brand programs.

“In 2013, 42 percent of all North American popped innovation was developed by private label brands, up from just 6 percent in 2011,” the Mintel report explains, pointing to Safeway’s Eating Right for Calorie Counting Barbecue Popped Crisps, Loblaw’s President’s Choice Popped Smokin’ Stampede popped crisps, and Walgreens’ Good & Delish Sea Salt Caramel Popped Granola Chips.

Popcorn offers another better-for-you growth opportunity. The subcategory enjoyed 16 percent sales growth in the United States between 2008 and 2013, and is expected to grow another 21 percent by 2018 to reach $2.2 billion, the Mintel report says.

Specifically, pre-popped popcorn offers strong opportunities for retailers’ private brands, as it has had the most continuous expansion of all salty snacks subcategories, Johnson says. On the national brand side, sales of SkinnyPop pre-popped popcorn — which claims to give consumers the chance to “indulge guilt free” at 100 calories per serving — jumped 274 percent in 2013, more than any other brand in the popcorn segment, the Mintel report states.

However, pre-popped popcorn shouldn’t be seen as only a better-for-you snack, the Mintel report adds.

“Many popcorn brands have looked to move the snack from a better-for-you option to a super-indulgent alternative to confectionery” the report says. “This has seen some popcorn launches mixed with caramel, chocolate and buttermilk.”

Examples on the national brand side include KingOfPop.com’s Double Chocolate Drizzled Caramel Popcorn, Werther’s Original Classic Caramel Popcorn and David’s Belgian Dark Chocolate Caramel Popcorn, the report says.

Going back to better-for-you snacking, consumers’ widespread adoption of hummus as a healthful and flavorful dip has helped drive strong growth in the pita chips subcategory, says “Sweet and Savoury Snacks in the US,” a December 2013 report from Euromonitor, Chicago. Jerky, too, has been finding considerable success as a result of its extremely effective marketing toward its core audience: male consumers.

“In addition, a recent trend among consumers of viewing protein as an effective appetite suppressant and energy booster has further helped jerky market itself as a smart snacking option,” the report explains.

Get it in the bag

Just as retailers should innovate to create differentiated products in the salty snacks category, so should they create unique packaging for these products. Roberts notes that while some retailers simply try to create store brand packaging that emulates a national brand counterpart’s, a uniform look across all store brand products’ packaging — thus, brand-blocking in the aisle — could be more effective.

But that’s not to say all private label salty snack packaging should look the same; retailers need to consider packaging tweaks from product to product. Take tortilla chips, for example: They tend to be more appealing when packaged in a flat-bottom paper bag, Roberts says.

“We [also] find that tortilla chips are best with a clear window — people want to see them,” he says. “You cover them up in a metallized [film] bag with photos, and [they] may not do as well.”

With better-for-you potato chips and crisps, retailers might want to consider a paper-style look.

“We are seeing a more subdued bag” here, Johnson says. “Matte finish in earth tones is the trend in better-for-you.”

And given that the salty snacks category is full of products that contain gluten, retailers could help make shopping easier for gluten-sensitive customers by putting “gluten-free” labels on products that are naturally gluten-free, Brown says.

“Labeling a tortilla chip ‘gluten-free,’ for example, draws attention to the category,” he states, “opening it up to those that want to limit their exposure to wheat/gluten … even those not suffering from celiac disease [who] are adopting a gluten-free diet to help them feel better.”

Position properly

As for positioning products in the store, cross-merchandising works wonders to grow sales of store brand salty snacks. For example, retailers could put salty snacks in the deli next to tubs of hummus or other complementary items, Roberts states. Or they could promote an overall meal solution comprising store brand bread, store brand meat, a store brand salty snack and more.

And placing signage suggesting a product’s benefits — kid-friendly, perfect for on-the-go snacking, better for you, etc. — helps, Brown says.

And don’t forget to price-shield store brand products during national brand promotional periods, Brown advises.

“Ensure that the store brand will always be at a competitive value,” he explains.

Of course, retailers might be able to rest easier during national brand promotions if they offer an opening-price-point product that always is priced lower than national brand products, Brown says. This way, they’ll have a quality product that always beats the national brands’ sale pricing.

Do consider product development tied to better-for-you salty snacks.

Don’t ignore the phenomenon of popped crisps, as nearly one-third of Americans purchase them.

Do consider offering a value range of store brand salty snacks to better combat national brand promotions.

Don’t limit pre-popped popcorn to better-for-you options — indulgent offerings also are popular here.