Salty snacks, an already profitable category for retailers, continues to grow, with newer segments like meat snacks and pumpkin/sunflower seeds showing big increases, and old standbys like potato chips registering a steady incline. Not surprisingly, retailers are taking advantage of the summer season, a peak time for selling salty snacks, to promote the category weekly and add secondary displays to encourage impulse buying.
According to data from the Snack Food Association, Alexandria, Va., the whole category grew 6.2% in dollars last year to $9.4 billion, and 4.4% in poundage. The biggest growth area was in meat snacks, said Ann Wilkes, a spokeswoman for the organization, which increased sales 28.5% to $1.3 billion.
Of course, chips account for the lion's share of the category: potato chips are a $4.7 billion business, up 2.2% from 1998, while tortilla chips are at $3.8 billion, up 5%. SNA's data is compiled from statistics from Information Resources, Chicago, as well as from membership surveys, said Wilkes.
Lynn Markley, a spokeswoman for Frito-Lay, Plano, Texas, believes the salty-snack category is poised for renewed growth. "It will step up growth due to changing consumer attitudes and behavior. Snacking is a larger part of American eating nowadays," said Markley.
"Summer is a big time for chips," said Roger Burks, senior vice president of The Mad Butcher, Pine Bluff, Ark. "Sales are up tremendously [in our stores] almost 11% over last year. Frito-Lay has been doing a good job with displays and another program called Weekenders.
"They select different items to roll out on the weekend (at full revenue)," he continued. Recently showcased on a special weekend display were Cheetos and Baconettes.
In addition, the Mad Butcher has been promoting jerky at the check stands and on special displays around the front end for about three months.
Snack nuts also do well at The Mad Butcher, said Burks, especially when they are displayed on 96-count shippers. These smaller packs may be sold at two for $1. While snack packages are popular in the summer, the larger cans of nuts pick up in the autumn, explained Burks.
All the retailers SN spoke with promote salty snacks weekly, year round, although they promote more items during the summer. The Mad Butcher cross promotes and cross merchandises chips with dips and soft drinks, for example, and the soda is merchandised across from salty snacks. Depending on how large the stores are, the salty-snack section can occupy anywhere from 36 feet to 84 feet, said Burks.
At D&W stores in Grand Rapids, Mich., salty snacks typically occupy one side of a gondola, said Tom Wolffis, category manager. D&W also uses secondary displays to build profitability in the category.
D&W has done cross merchandising with Frito-Lay products and Pepsi (Frito's parent company), but it is difficult to cross merchandise chips and soda, said Wolffis, because both require significant displays.
While holidays are key periods for salty snacks, "We've proven you can make a splash any time of the year," explained Wolffis, "because this is an impulse category." D&W typically promotes "multiples," said Wolffis: two for $3 or two for $5.
At Dahl Food Markets, Des Moines, Iowa, salty snacks occupy about an aisle-and-a-half of space, said Bryan Nadeau, grocery buyer, with about 60% of the display consisting of potato chips.
Dahl's uses secondary displays all summer long. "We may tie in snacks with pop and beer. While we sell all year round, it's easier to tie in during summer with pop or beer or water," Nadeau said. Meat snacks "are really starting to pick up," he added.
Steve Mitchell, vice president of marketing at Acme Markets, North Tazwell, Va., has also seen an increase in meat snacks. He noted that while the category began to increase three years ago, it has really picked up a lot in the last year. More companies are producing the product, he said, and they are more aggressively promoting it.
Acme carries beef, chicken and turkey jerky in the beer section and also at the front end, near the checkout lanes. Salty-snack sections vary in size, from 40 feet to 64 feet. About 40% of the dollar volume is in potato chips.
Pretzels are a growth category at Acme, although the category is down nationally, according to the SNA. Baked products and Frito-Lay's baked and Olean products are not doing well, Mitchell noted.
Acme also uses secondary displays to cross merchandise salty snacks with soft drinks, beer, and water, and snacks are sometimes displayed at the checkout lane.
"We do more promotion in the summer. In the winter, you have more categories you have to get out," explained Mitchell. "We do weekly cross merchandising. We build displays primarily on the perimeter."
At Camellia Food Stores, Norfolk, Va., salty-snack areas range from 24 feet to 42 feet. Camellia generally uses endcaps for secondary displays, but snacks can show up in the front lobby, where they do "real well" as sale items, said Mike Madigan, DSD buyer. The stores also use wing endcaps to merchandise soda near Weekender displays of snacks, or the stores may put a Weekender display near the beer case.
Hy-Vee also varies its snack sections, from 18 feet to 64 feet, depending on store size. As with many other retailers, nuts often appear in the baking aisle, unless they are being merchandised in secondary displays.
"We've got lane blockers for nuts at the front end that are doing very well. Planters at two for 99 cents are doing very well," said Mike Tetmeyer, vice president of marketing for the W. Des Moines, Iowa-based Hy-Vee, referring to the smaller size snack packages. Jerky sales are flat at Hy-Vee, said Tetmeyer.
Hy-Vee cross merchandises salsa and dip with chips, and the retailer also promotes "grab bags" of chips in the takeout department, 99 cents for a two 1/2-ounce bag. Save-A-Lot, a limited-assortment grocery chain acting as a wholly owned subsidiary of Supervalu, Inc., Minneapolis, carries both private-label salty snacks and a limited number of national-brand items.
"Part of our strategy, to offer up to 40% savings to customers, includes merchandising products from the platform up," said David McDaniel, vice president of grocery procurement. "For high volume products like potato chips, we stock open boxes from the ground up. We display lesser-velocity products like cashews or dry-roasted peanuts by stocking on shelves."
All salty snack products, including potato chips, nuts, corn-based snacks, pretzels, and microwave popcorn are displayed together or very close together, said McDaniel. Usually the salty snacks are also in close proximity to the soda.
"Our exclusive-label snack products like J. Higgs potato chips are guaranteed to be comparable to or better than national-brand equivalents," continued McDaniel. Save-A-Lot has recently introduced a private-label meat snack, which McDaniel expects to do well in some 850 stores in 35 states where the retailer operates.
