SNACK SURGE

WILLIAM SMYTH

The current surge in popularity of meat snacks has retailers cashing in on these salty, smoked products as they re-position the items within the center aisles of supermarkets and lasso in the profits.

For years, the American perception of beef jerky was that of a 'cowboy's food,' popular only among fur traders and mountain men. However, recent statistics suggest that beef jerky doesn't just call the range home anymore.

According to the Snack Food Association's 1999 State of the Industry report, meat snacks have become an integral part of U.S. snacking habits and manufacturers are starting to market the product more toward mothers.

Given the growth that this billion dollar category experienced last year, it seems like manufacturers and up-and-coming meat snack players have linked with moms in the supermarket aisles, convincing them to spend a portion of their snack dollars on the products.

According to Information Resources, Inc., Chicago, dried meat snacks in supermarkets saw a 17.5% increase in sales to $117 million during the 52-week period ended July 18, 1999. The category saw total FDM increase 20.3% and total sales reach $184 million.

Slim Jim, a brand of Goodmark Foods, Inc., Raleigh, N.C., is the leader in the dried meat snack industry, recognizing a 21.1% increase last year in sales to $34 million, $20 million of which came from supermarket sales. Supermarket sales as a whole increased 18.4%. Goodmark also owns the Pemmican, Big Mama, Tijuana Mama, Rough Cut, Penrose and Smokey Mountain meat snack labels.

The Oberto Sausage Company, Kent, Washington, also saw major increases in sales in all retail areas. Its Oh Boy! Oberto brand increased sales at the retail level by 51.6% to $18.4 million. Dried meat snacks from Bridgford Food, Inc., Chicago, were up 20% and witnessed an $11 million dollar profit to take third place in supermarket sales.

"Meat snacks are doing really well," said Keith Shannon, category manager at the St. Louis-based Schnuck Markets. "They've been doing well for the past couple of years now."

According to Shannon, 10 linear feet at Schnuck's is devoted to dried meat snacks, with the top brands sold being Oberto and Jack Link ($6.6 million in supermarkets last year, up 56.1%). Shannon pointed out that the traditional Slim Jim has also done very well for Schnucks. Fat-free dried meat snacks are turning out to be the growing category, and Shannon credits manufacturers with reviving sales.

"A lot of merchandising and advertising that companies are putting behind it is really helping out," said Shannon. Minor promotions are done from time to time at Schnucks, with products displayed at the checkout counter, he added.

Wild Oats Market, Inc., Boulder, Colo., has also witnessed the segment's growth. Although the meat snack volume account has not yet been identified at Wild Oats, sales have increased. "We presume that people are consuming more and more meat snacks due to the trend of consumers wanting more protein rather than carbohydrates," said Michelle Walker, product coordinator for the grocery department. "We do sell them."

In addition, Wild Oats sells authorized antibiotic- and hormone-free meat snack products in its grocery department. "We sell what we consider clean and is a part of our store philosophy," added Walker.

Meat snacks are displayed in different areas within each store of the Wild Oats chain. Walker said some stores display in bulk on the meat counter, while others have the products packaged in the grocery department or even on spinner racks.

Homeland Stores, Oklahoma City, Okla., has also had an increase in meat snack sales, despite not carrying the variety some other stores have. "We carry four items and we do not have a large variety," said Ralph Radcliffe, category manager. "Slim Jims do very well. They are displayed in the snack aisles with the Pringles, Chex mixes, things like that."

Manufactured brands have begun increasing meat snack promotions, also contributing to the increase in sales. According to the SFA, Goodmark, Oberto and E.W. Knauss and Sons, Inc., Quakertown, Pa., are a few that have been using promotions to generate sales. From World Championship Wrestling's Slim Jim promotions for younger children to Knauss' NASCAR auto racing promos for an older crowd of meat snack fans, beef jerky-type products are trying to create a niche.

Oberto has undertaken a "Go Biking with Oberto" promotional campaign where consumers can win Schwinn mountain bikes and water bottles, as well as Oberto meat snacks. Goodmark Foods has also found success in promotions. Jack Slater, vice president of marketing, believes there are two main divisions within supermarkets -- beef stick and beef jerky.

"One of the critical pieces of success is that Slim Jim is the only brand that does national advertising. We do a lot with sports such as the Busch NASCAR series and NBA [National Basketball Association] Hoop-It-Up," said Slater.

Slater pointed out that the Slim Jim brand is sold in different packages in supermarkets -- in 5-pack cigarette-style packs or multipack canisters, which is "one of the areas we've had success in."

According to Slater, one of the biggest growth areas in supermarkets is at the front end. "This is a great growth area as an impulse item. Kids can grab Slim Jim at the front end," he said. "We are finding new places to sell Slim Jims and there is definitely a consumer demand for them. We spend more money than most candy companies on advertising."

"We sell beef jerky in the Pemmican brand and consumers are realizing that it is high in protein and it is the perfect kind of snack that they never considered before. We have been seeing double-digit growth and we are finding them in more and more supermarkets," Slater added.

The Chicago-based Bridgford, the nation's second-largest meat snack manufacturer for FDM behind Goodmark, has also seen demand for meat snacks increase. "It's an outstanding category for us. Meat snacks are really taking off. The driving force for meat snacks right now is that it is being viewed as a healthy snack," said Chris Cole, national accounts manager at Bridgford. "People are realizing it's 97% to 98% fat-free and high in protein. Gyms are even getting into it. Consumers are now noticing that it can be a healthy alternative."

Bridgford now offers its 4-ounce jerky bag in six flavors. "This is the size people want and the new flavors should be hitting the stores now," Cole said, adding that 4-ounce bag shippers are being sent out nationally. The company has also developed high graphic shelf caddies for grocery and mass merchant stores.

"We've spent a lot of money in new packaging and merchandising aides," said Cole. "They're pretty effective. We have a DSD system that handles everything from coast to coast, Alaska, Hawaii and all of Canada. With the DSD, people can work with store owners more closely, rather than just going through the warehouse. The DSD system is great so you have to take advantage of it."

Some retailers, on the other hand, have not yet begun to reap the benefits of the meat snack craze. One company that is not seeing any growth is Star Markets, Cambridge, Mass. According to Joe Connolly, deli buyer, dried meat snacks are not a popular item. "They are a very small part of our business," said Connolly. "We carry mostly Bridgford brands and they are all store delivered. They are located right within the deli on top of the deli counters."

Connolly did however point out that meat snacks are hardly ever advertised and not merchandised well enough in his store. "We don't promote these items," Connolly said. "We view them as an impulse item and the customer can pick them up when they're at the counter."