Bigger Sizes Drive Larger Sales In Salty Snacks

Salty snacks moved back into the top 10 in-store categories last year with a 2.7-percent industry sales gain — leaping over the nonedible grocery category. On a per-store basis, salty snack sales were up 2.9 percent to $28,499 in sales per store last year. The category represented 2.33 percent of all in-store sales and contributed 2.53 percent of in-store gross margin dollars.

Unit volume was down roughly 4 percent in the category last year, but the increase in sales was driven by a shift in sales mix to larger sizes for take-home and fewer smaller sizes for immediate consumption.

Within the category, potato chips — the largest subcategory — saw a double-digit sales gain of 10.7 percent (up 10.9 percent on a per-store basis to $7,641 per store).

Among the other subcategories, tortilla/corn chips, nuts/seeds, and crackers all experienced a dip in sales last year, with the biggest decline in crackers, which dropped 7.2 percent industrywide (down 7 percent per store to $1,678). Unit sales of crackers dipped by double-digits in 2009. Tortilla/chips and nuts/seeds both dropped 3.6 percent in overall sales, with tortilla/chips falling to $5,343 per sales last year and nuts/seeds averaging $3,654 in sales per store.

Fig. 38

Category Analysis — Salty Snacks

(2.33 percent of in-store sales, 2.53 percent of in-store gross margin dollars contribution)

Fig. 39

Percent of Salty Snack $ Sales and Unit Volume

Pretzels and ready-to-eat popcorn, on the other hand, helped prop up the category in convenience stores. Pretzel sales were up 4 percent overall, and grew 4.2 percent on a per-store basis to $1,194. Ready-to-eat popcorn was up 17.3 percent industrywide, or 17.6 percent per-store to $970.

Selling larger package sizes helped convenience stores increase their dollar share of sales in the salty snacks category last year. The convenience channel comprised 19.5 percent of the dollars sold in the category last year, up almost a half-share point from the year before. Supermarkets still led in overall dollar share with 75.21 percent of sales, down slightly from 2008, while the drug channel was flat at 5.29 percent of sales. In unit volume, c-stores posted 32.17-percent market share, compared to supermarkets' 62.17 percent and drug stores' 5.66 percent share.

BOTTOM LINE:

• 2009 was a good year for salty snacks, especially potato chips.
• Larger-size packages sold well as the sales mix shifted away from smaller sizes for immediate consumption and toward take-home packs.
• Ready-to-eat popcorn was the fastest-grower percentagewise in the category.

Salty snacks moved back into the top 10 in-store categories last year with a 2.7-percent industry sales gain — leaping over the non-edible grocery category.

Selling larger package sizes helped convenience stores increase their dollar share of sales in the salty snacks category last year.