LEADERS OF THE SNACK PACK

SARAH MULHOLLAND

Judging from snack sales in the Center Store, sitting down with a bag of chips remains a favorite American pastime. Retailers continue to watch the category thrive, driven by product innovation in flavor and convenience, as well as our persistent affection for nibbling and munching.

According to statistics from ACNielsen, Schaumburg, Ill., a majority of snacking segments, from potato chips to peanuts, exhibited strong sales numbers for the 52-week period ended Dec. 2, 2000, in supermarkets with supercenters. Particularly striking are the figures for meat snacks, showing a 42.2% increase to $201.5 million, and pork rinds, with a 21.3% increase to $106.5 million. Sandwich and snack pack crackers are seeing impressive growth as well, with a 14.9% increase to $463.2 million.

In addition, the statistics express consumers' growing disenchantment with fat-free fare as rice cake sales spiral downward, showing a 9.7% decrease to $125.8 million for the most recent 52-week period. Retailer commentary was uniformly consistent with the statistical evidence, as they reported flat sales for baked chip varieties as well as those containing Olestra.

Constant favorites such as Lay's potato chips are responsible for much of the category's enduring popularity.

Retailers also noted Frito-Lay's promotional efforts, as well as the company's infusion of new flavors and unique marketing programs, as driving forces in the snack aisle. While the products remain the same, the company's novel packaging ideas have struck a chord with today's busy consumers.

Frito-Lay's most recent introduction, combining chips and dips into one product, has witnessed a surprising degree of success, according to some retailers.

Darrel Dyer, DSD coordinator at John C. Groub Co., Seymour, Ind., said the overall snack category has grown in his stores, with sales concentrated in the conventional chip segment.

"Lay's is leading the pack, simply because they're promoting the products more than the other manufacturers," said Dyer.

However, Dyer has not seen a tremendous amount of material pushing the new chip and dip combos, yet the new product is still doing well in his area. Indeed, it is doing better than he expected, given the scarce promotional fuel, he said.

Dyer ascribes the product's success to the convenience factor, and expects to see more of the same in the future.

An anonymous buyer for Shaw's of West Bridgewater, Mass., said the chip-and-dip combination is definitely the most exciting thing to hit the shelves for a while, but expressed some reservations about the price.

"It's doing well with people who want to spend the money," the source said. "I don't think people buying them are paying much attention to price because they're not cheap. You could buy a fairly big bag of chips and a can of dip for less money."

She also sees quick convenience as being the primary attraction.

"We have become a nation of one-handed eaters -- driving with one hand and eating with the other."

Roger Burks, senior vice president of Mad Butcher, Pine Bluff, Ark., said sales for the combo packs have been decent in his stores, but nothing more. However, his stores have not done much to promote them, and he plans to take another look at how the product is being merchandised in the near future.

Burks feels that Frito-Lay's ever-expanding selection of flavors has had a significant impact in certain segments of the category.

"Look at what they've done with Doritos," said Burks. "There used to be three flavors. Now they've got one for everything. They completely dominate the tortilla end of the market."

Another strong addition to the Frito-Lay arsenal are the bundle packs containing up to 50 small bags of chips.

"Those bundle packs, ideal for lunches, are selling very well," said Burks.

The bundle packs have also proved a boon to the snack category outside of the daily mundane, bolstering snack sales at Halloween, a holiday generally associated with Milk Duds and chocolate miniatures.

"We did excellent [last] October with the bundle packs," Burks said. "Frito-Lay really promoted their chips for Halloween this year, more than they have in the past. And, of course, the bundle packs weren't available in the past."

The source at Shaw's also saw a significant increase in sales in the chip category at Halloween this year due to the bundle packs. She believes that price played a role, in addition to health concerns.

"Big bags of candy can be so expensive," she explained. "But you can buy 50 small bags of potato chips for $2.99 or so."

"And I suspect that people feel potato chips are little bit better for you than candy," she added.

The bags used Halloween graphics, and at Shaw's they were displayed at a Halloween destination center alongside the candy.

Dyer also promotes snacks in his stores for Halloween, and includes snack cracker packages in the mix.

Indeed, convenient single-serve snack cracker packages are doing very well year-round. At Shaw's, some stores may have 2 to 4 feet dedicated to these products in the cookie and cracker aisle.

Again, the source attributes the rising popularity of snack-sized items to American consumers' harried, on-the-move lifestyles.

"Everything can be found in individual serving sizes now. With products like Kellogg's snack packs, even cereal has been taken down to the snack level."

Salty snacks remain the customary offering for group gatherings, sometimes serving as the victual centerpiece, as on Super Bowl Sunday. Retailers continue to take advantage of these snacking occasions, cross merchandising with soda and dip and other festive necessities throughout the store.

Groub's Dyer was preparing for Super Bowl Sunday when SN spoke with him, saying it was one of the biggest weeks for snacks. He said his stores was running extra snack promotions, being sure to make room for additional displays for anything running on ad to ensure sufficient product.

While the Super Bowl, July 4th and Memorial Day events were named as the biggest snacking draws, opportunities abound throughout the year.

"That whole time frame between Thanksgiving and Christmas is great for chips and pretzels," said Burks. "There are just so many parties."

For Valentine's Day, Burks' stores have had success with a cross-merchandising promotion featuring snack foods, another holiday not typically associated with chips and dip.

"We get empty Coca-Cola six-pack cartons and fill them with different things," he said. "We'll have a chip and a dip, maybe some candy. It's something different for Valentine's Day. It appeals to everybody, men and women. And there is no target age group."

The cartons may also include a "Sports Illustrated" aimed at the men or a "Cosmo" for the women, topped off with a balloon.

The displays are generally set up in the produce aisle alongside the flowers and balloons. The price varies depending on the mixture.

While the source from Shaw's acknowledges a modest bump in snack sales in anticipation of some events, particularly the Super Bowl, she maintains that snacking is a year-round phenomenon, minimally affected by the time of year.

"You would think the rise and fall in sales would be more pronounced," she said. "But actually, it's pretty consistent."

"People who buy potato chips are always going to buy potato chips. But, for a party, they'll buy another bag. People that never buy these kinds of things don't go out and buy them for the holidays."