IN SEASON

DAN ALAIMO

Last year was a very good year to be selling salty snacks. And, from early indications, 2002 might be even better. With the Super Bowl on Feb. 3, followed by the start of the winter Olympics on Feb. 8, plenty of consumers were reaching for their favorite snacks.

The stay-at-home trend sparked by the events of Sept. 11 of last year resulted in stronger sales of all "comfort" foods, including salty snacks. This sales spike continued into the fourth quarter, retailers told SN.

Meanwhile, 2002 got off to a promising start for salty snack sales with the Super Bowl followed by the start of the Olympics, which run through Feb. 24.

"Winter used to be the slow time for snack sales, but with the Super Bowl and then the Olympics and then the Final Four, I now believe that this fall and winter will prove to be one of the best sales periods in our recorded history," said Jim McCarthy, president and chief executive officer, Snack Food Association, Alexandria, Va. The SFA is holding its annual SNAXPO show in Chicago this week.

Staple snack segments in supermarkets registered solid gains in dollar sales last year when compared to the previous year, according to ACNielsen, Schaumburg, Ill. For the 52 weeks ended Dec. 29, 2001, potato chips were up 7.3% vs. a 1% gain in 2000, tortilla chips were up 4.9% against a 1.2% increase in 2000, and pretzels were up 2.2% as opposed to a 3.3% decline in 2000.

Among the fast-growing, up-and-coming segments, ACNielsen reported that health bars and sticks increased 40.5% in 2001 vs. 44.2% in 2000; meat snacks went up 13.3% as opposed to 36% in 2000; nuts in bags rose 11.7% against 8.2% in 2000, and trail mixes registered a 17.4% gain vs. 19% in 2000. Dips also were up sharply, with canned dip rising 22% in contrast to 6.7% in 2000, and dip mixes increasing 10.7% compared to 5.2% in 2000.

Supermarkets have about a 40% to 45% market share for most of the various snack categories, according to the latest report from the SFA. "For all the major, traditional snack categories, supermarkets are the No. 1 venue for sales and we expect that trend to continue," said McCarthy.

"We've had a nice sales increase," said Mike Tetmeyer, vice president, marketing, Hy-Vee, West Des Moines, Iowa. "We had a spike after 9/11, but Christmas was just about average with just a normal increase. Now the Super Bowl and the Olympics should drive stronger snack sales." For the Olympics, Hy-Vee is featuring special offers in the salty snack category, he said.

ACNielsen's numbers reveal a clear sales jump for the total snack category for the week ended Sept. 15, 2001. In supermarkets, snacks were up 10.8% over the previous year. Total snack sales continued to show strong increases for the rest of the fourth quarter of 2001, but no other period saw as dramatic a rise as the week encompassing Sept. 11, according to ACNielsen.

"People are staying at home more and our snack sales are up," said Jerry Ward, senior vice president, Mad Butcher, Pine Bluff, Ark. The retailer is also promoting with the Olympics in mind, but most of all, Ward credits the category's growth to new items and new packages, referencing canister packs from Frito-Lay.

"There are a lot of new items out there from all the snack companies. The salty snack category is going to continue to grow because of the promotions and the new packages they are coming out with," Ward said.

At Brown's County Markets in Sycamore, Ill., Frito-Lay sales were up 18% in 2001, said Dan Brown, owner. "We didn't get any numbers from Jay's, but I know they had an increase, too."

Brown expects a bump in sales from the two-week-plus Winter Olympics. "When people sit and watch TV, they like to munch on things -- a bag of chips or pretzels with a can of soda." As a result, he predicts another strong year for salty snacks. "I don't know if we will get another 18% increase like we did with Frito-Lay last year, but I would think that we should see a 10% increase," he said.

Food Lion, Salisbury, N.C., saw a sales increase for salty snacks in the fourth quarter, said spokesman Jeffrey Lowrance. "This could be related to 9/11 or to the simple fact that people buy more groceries during the colder months and holiday season."

While Food Lion expected strong sales of salty snacks for Super Bowl weekend when SN called, the retailer didn't anticipate anything out of the ordinary for the Olympics. "With the Olympics being held over multiple weeks, we see consumers buying mostly normal amounts and not loading up for a party-type event," he said.

But for the year ahead, the retailer sees steady growth for the category. "There are more regional chip companies expanding into our marketing areas, and new items are always a key driver of sales. Snyder's is coming out with a healthy line of salty snacks and, in general, healthy, all-natural products are growing," Lowrance said.

Whole Foods Markets, Austin, Texas, is promoting a "Gold Medal Game Plan" this month, keying off the Super Bowl, the Olympics and National Snack Foods Month. "Typically, snacks have not often been associated with good nutrition because of the amount of saturated fats, high caloric content and artificial additives they contain," said Alana Sugar, Whole Foods' snack coach. "These days, you can find great-tasting snacks free of all these unwanted ingredients and the guilt."

The program is highlighted on Whole Foods' Web site, where recipes and snack tips are posted, while "grab-and-go" snacks such as natural and organic tortilla chips are offered in the stores.

Contrary to common perception, snacking is a healthy activity, Sugar said. "Frequent, balanced snacking is one of the best things you can do to promote well-being. It is also an excellent strategy to keep you from overeating during meals and to maintain a high energy level throughout the day."

Jay C Food Stores, Seymour, Ind., also experienced sales increases for the salty snack category following Sept. 11, said Darrell Dyer, category manager and DSD coordinator. He also expects the Olympics to contribute to another year of continued growth, depending on the level of advertising spending by the big snack companies like Frito-Lay.

"About the biggest product trend in snack foods is what they call 'snack-on-the-go.' For example, Frito-Lay is coming out with canister-type containers going after the Pringles business. They are putting a lot of money behind them, so they will probably sell decently," Dyer said.

New products and packaging are driving the salty snack category, confirmed Peter Costa, president, Target Marketing, Huntington, N.Y., a sampling and event marketing business. "With innovative packaging, innovative ideas on combining new flavors, and the way they package these snacks-on-the-go, I don't see snack foods leveling off. They are going to have a good year," he said.

Smaller package sizes for "quick snacks" is another key trend Costa identified. These were originally designed for school-aged children, "But now it is crossing over to young adults and people on the go. Convenience is becoming a big push. We live in a microwave age. Consumers want things now -- quick, easy, convenient. This trend suits the way people live their lives. We are on the run," he said.

Hy-Vee's Tetmeyer also reported good movement from the smaller, single-serve package sizes. "Most of the time they are merchandised on their own racks, whether on a sidekick rack, or up by the checkstands, or by the 20-ounce pop coolers," he said.

For a traditionally direct-store-delivery category like salty snacks, wholesalers are challenged to come up with ways to get their warehoused products in the stores, noted Debbie Esparza, senior buyer in grocery purchasing, Unified Western Grocers, Commerce, Calif. With all their day-to-day tasks, many retailers are content to let the DSD driver handle the salty snack aisle, "and he is going to move things around the way that he wants," she said.

Pringles has been a steady seller out of Unified's warehouses, but now Frito-Lay has a competitive product line in the stores. But at the same time, General Mills has come out with the Wahoos line, which is handled by warehouses, and the sweet-salty snack items are getting stronger, she said.

"As a whole, I think this is going to be a really good snack year for us because we are going to see a lot of new items coming out. But I'm still waiting to see what Frito-Lay is going to do with its canister line and how that is going to impact my Pringles business," Esparza said.

Add Esparza to the voices saying that the Olympics won't boost salty snack sales significantly. "You do have a lot of manufacturers trying to capitalize on the Olympics theme with in-and-out items. But I don't really see the Olympics as being a big driving force for salty snacks," she said.

"I don't see the Olympics doing much, but the Super Bowl is always great," said Brian Nadeau, grocery buyer, Dahl's Food Markets, Des Moines, Iowa. Mostly he sees good, steady sales for salty snacks boosted by new item introductions. "How many households do you know of that don't have a cupboard with some chips or crackers or something?" he asked.

Consistent salty snack sales have also been the trend at Frank's County Market, Elkhorn, Wis., said Ray Knutson, store manager. "In general, as a percentage of the store sales, we are not selling any more or less snacks than before. But it's a good, strong category and I don't anticipate any sales changes. It is a pretty steady ship," he said.