POPCORN STAYS HOT

SN Report

vable popcorn's popping. Retailers in different markets across the country reported brisk sales of the packets that people pop into microwave ovens for a quick hot snack.

"The microwavable popcorn category just keeps growing," said Jimmy Jones, buyer at Ingles Markets, Black Mountain, N.C., one of 10 retailers interviewed about the category. "We don't really advertise the popcorn that frequently. It just

sells well on its own."

The cold winter months are generally the hottest opportunity for sales, said the popcorn buyers. However, the category's other attributes are helping it develop as a year-round category, they added. Those attributes include convenience and appeal as a healthy snack.

Low retail prices complete the equation that adds up to growing popularity, the retailers said. Many of them added that the popcorn responds well to frequent advertising and promotions, but it still offers them healthy margins.

National food store scanning data, provided by Information Resources Inc., Chicago, showed dollar sales for the $513.2 million category up only slightly during the 52-week period ended Nov. 7, 1993, compared with the previous year.

Retailers contacted by SN, however, were more enthusiastic about microwavable popcorn than those numbers would imply.

For some, that optimism could be stemming from line extensions over the last month or two. The latest product trend is upscale flavoring, such as a butter content comparable to that of the popcorn sold in movie theaters.

Retailers said major manufacturers are rolling out more upscale lines with "theater-style" butter and other fancy flavors, and they are working them into their assortments. Retail expectations for those new items were positive for the most part, especially with regard to theater-style butter-flavored entries.

Here are comments from the supermarket buyers about the category:

Bob Rieck

buyer

Seaway Food Town

Maumee, Ohio

Microwavable popcorn is doing very well in our stores. We merchandise it in an 8-foot popcorn set.

We frequently advertise the microwavable popcorn. We find that they offer us good margins.

We don't really see any seasonality to microwavable popcorn sales, especially since it is microwaved; you don't have to heat the home. It sells well year-round.

We find there to be a good growth in the larger sizes. Customers are going more to the six-and 10-pack items instead of the original three-counts. And these larger sizes still offer us good margins.

In our stores, Orville Redenbacher is the No. 1 seller, followed by General Mills' Pop Secret.

Jimmy Jones

buyer

Ingles Markets

Black Mountain, N.C.

The microwavable popcorn category just keeps growing. We don't really advertise the popcorn that frequently. It just sells well on its own. I don't even know how many feet we devote to it.

The newest thing in our market is the Movie Theater Butter popcorn from Hunt Wesson, Orville Redenbacher. That is really big. We just can't seem to get the pipeline filled on that.

It looks like the flavors tied to movie theater quality are going to be excellent items. It is still fairly new for us and hasn't settled down to where we can tell what the normal movement is going to be. We just buy big and get it in here and it just zooms out of here really quick.

We have some of the larger value packs, and some of them are doing well for us. The value packs are doing real well.

We have private-label popcorn, but we don't have the large packs yet in private label. It is something that we may look at in the future. Right now we just have the smaller packs.

The microwavable popcorn has really cut into our sales of the jar popcorn. We've become a lazy society and people don't want to be bothered with the fuss of the old-fashioned poppers.

We merchandise the bag popcorn in the produce department, and I don't buy it, so I don't know how it has been impacted.

We have over 25 different stockkeeping units in microwavable popcorn, including 18 from Hunt Wesson, and others from Betty Crocker and American Home Foods' Jiffy Pop.

We also have three SKUs in private-label microwavable popcorn, in light, regular and butter flavors.

Larry Brown

buyer

Ball's Super Food Stores

Kansas City, Kan.

The popcorn category is still growing, and getting a bit upscale now with all the super butters.

We advertise it every few weeks and display it constantly. We don't put it on sale much. We're actually taking our margins up because it pretty much sells on its own.

We've decreased the number of brands, but added more SKUs of the stronger brands. Popcorn is taking up more shelf space than in the past. Bigger packages are beginning to sell better, and I think they will continue to do so.

Myron Haugland

buyer

Fareway Stores

Boone, Iowa

Microwavable popcorn sales are probably 80% of our popcorn business. Microwavable popcorn has been gradually growing and I expect that to continue into the future.

I think price is what is driving sales, along with the convenience it offers. The microwavable popcorns sure save a lot of clean-up mess afterwards, compared with the popcorn popper varieties.

Manufacturers have come out with some new flavors to help build sales, but they haven't taken off very well. Hunt Wesson came out with some new flavors this year, but I think only one out of three will probably make it: Movie Theater Butter.

Margins are probably staying about the same. The category offers retailers healthy margins.

With each company, the most popular size or flavor tends to be different. With one company, three-packs could be the best seller, and with another it could be six-packs.

We advertise the category a lot. We use buy-one-get-one-free and multiple pricing to promote the category. In fact, I think there is popcorn in every ad that we put out.

Sales of popcorn pick up during the winter months because people are home more and they may be renting more movies than they do during the summer months.

We also have a private label that is doing pretty well. We introduced it in the last eight months. We have it in three sizes: single, three-pack and six-pack.

Mark Polsky

senior VP

Magruder

Rockville, Md.

We operate 12 stores in the greater Washington, D.C., metropolitan area. Microwavable popcorn sales have been unbelievable. It just grows and grows and grows, and all of the new entries seem to do well.

It is a category that doesn't need tremendous amounts of space, but everybody has their entries in and there is a lot of duplication. Unfortunately there are only so many different types.

Orville Redenbacher has just come out with their theater-style popcorn, but it is too early to tell how it is doing. Other than that, it is just a growing and growing category.

The low-fat items are really growing and are driving sales. I even eat a package every day as my night snack.

Right now, we carry Orville Redenbacher and Pop Secret, and we carry everything that they make. The introduction of new items had leveled off until the new theater items came out. But that is just a couple of items and it is not too bad finding space to carry them.

I don't think there is anything else to come out with for more new products. They tried the flavors and that didn't work. It is just there. That's it.

We do a big job with the large sizes, such as the eight-pack. But they sell all over the board. You have the people that don't care about fat and buy the buttered variety, and then you have the people who do care and buy the low-fat. We sell pretty well evenly throughout.

You don't really have to advertise the category, but I'll promote it about three times a year, mostly during the colder months. There really isn't any seasonality to popcorn, but during the warmer months chips are what we're thinking about when we go to put an ad together.

Nick Wedberg

VP, sales

Plumb's

Muskegon, Mich.

Plumb's operates 19 stores in Michigan. Spartan Stores is our wholesaler.

We've done real well with microwavable popcorn. We devote an average of 12 to 16 feet to it, and we do very, very well with it. All year round. The new items out there -- the Butter Burst from Pop Secret and the RedenBudders from Orville Redenbacher -- are really going to sell well. Both companies are really active in the movie theater popcorn lines. In fact, RedenBudders says on the box that it tastes like movie theater popcorn.

The margins in that area are usually pretty good. Because it is not that expensive, we can make a decent margin on it. Plus, all of the major manufacturers are pushing the category and we get co-op funds that we can run in that area.

Right now we are running a special pack from Pop Secret that is buy-three-get-three-free. We offer a six-pack at a three-pack price. That is a hell of a good value.

Health trends and the ease of making it both make it a popular snack category. I have three kids, and rather than take the time to use the air popper or to do it on the stove, I just throw it in the microwave and it tastes great. That has to be the No. 1 reason for its popularity.

We advertise the microwavable popcorn all of the time, at least twice a month.

Microwavable popcorn sells a little bit better in the winter months, but if you promote it in the summer it will sell well then, too. We advertise it almost all year round, and it sells quite well all year round.

We have a large assortment. We also have a private label and a Save Right label, which is a little bit below a private label, and they all sell quite well. We have a top of the line and bottom of the line, just based on quality, and they all do quite well, so the popcorn appeals to all consumers.

Our stores have a lot of blue collar (shoppers) and then we have a higher clientele shopping in some of them, so it appeals to a broad spectrum of people.

Nick Pallios

general manager, grocery buyer

Pallios Bros.

Ceres, Calif.

Popcorn sales are going very well. I think people like it because it's not fattening and the price is good.

We offer the major name brands, a private label and a generic brand. It sells day in and day out, but when we have a good ad, sales go way up.

There are some new products which the customers seem to like. Orville Redenbacher and Pop Secret have offered movie theater-style flavors, such as heavy butter and garlic and herb. They've only been around two or three months, so it's too early to tell just how well they'll do. Early sales look good.

W.C. Cadle

buyer

AppleTree Markets

Houston

Microwavable popcorn is doing well for us. Ours is a bit of a unique situation. Our company is selling all but seven of its stores; so instead of having our own warehouse like we used to, we rely on a wholesaler. The wholesaler offers us what sells for all its customers, not just what sells for AppleTree. And our best sellers are Orville Redenbacher and Pop Secret.

Popcorn sells regularly, but sales bring more people in and help massage the sales figures a little bit. We'll do "bushel bags' -- a special at a reduced price for four weeks.

We also do lots of displays. We usually do a popcorn display around Super Bowl time. New products stimulate sales. To a certain extent, some people are going away from light and going to the extra butter varieties.

Dayton McMartin

buyer

Homeland Stores

Oklahoma City

Sales are steady. Microwavable popcorn is sometimes advertised and our stores do displays. We've done displays in the video rental area and they've done well. You get a good hike in sales when you put it on promotion. We offer Orville Redenbacher, Pop Secret, Jolly Time and a private label. Shelf space is the same as in the past.

Dean Ward

buyer

6th Street Food Stores

North Platte, Neb.

Butter is the No. 1 seller. We put popcorn on sale quite a bit and do many in-store displays. We'll advertise buy-one-get-one-free deals and that really blows it out of here. We carry four national brands and a private label.

Sales are pretty steady all year round. This time of year we get good allowances. We display it and pass on the allowance. It seems to sell a little better in the wintertime when people stay home a bit more and want something to eat while they watch television.

I think people like the convenience of just popping the package into the microwave and being done with it.

It also seems like the manufacturers are coming out with new flavors and packages all the time. That's good because the companies get behind us and advertise the new products. So that's got to help us.