Make Way For Alternatives

Alternative snacks are showing promise in the convenience channel

With an average shopping time of just a few minutes, the grab-and-go convenience store mentality is a well-honed business philosophy. Whereas traditional snacks have been a category leader for some time, the alternative snack segment is also showing promise.

"We use NACS category definitions and we have three subcategories in alternative snacks: meat snacks; energy bars, granola and fruit snacks; and the catchall [of] other," said Michael Turco, category manager for Rockland, Mass.-based Tedeschi Food Shops, which operates 188 convenience stores throughout New England.

Turco explained that he and his team work closely with the c-store chain's brokers, including Crossmark, Harold Young and Acosta, as well as manufacturers Kellogg's and General Mills. "We also seek out new items through other sources like the Natural Food Show and ECRM events," he continued. "All of our business partners are aware of our initiatives in this category and will seek out product lines that will help us achieve our goals for the category."

The 2012 Convenience Store News Industry Report found the average c-store sold $11,326 in alternative snacks in 2011, a 12-percent increase compared to the previous year. Meat snacks remained the best-selling item in the category, although health/energy bars saw the greatest percentage increase in sales. Meat snacks rose 13.1 percent in average sales per store in 2011, while health/energy bars grew 13.8 percent and health/ yogurt bars increased 7.8 percent.

ADOPTION RATES

The alternative snacks landscape is often hard to transverse for many convenience store operators, according to Jenn Ellek, director of trade marketing and communications for the National Confectioners Association (NCA). "Consumers are looking for fun to eat, easy snacks, and alternative snacks are not necessarily the best in the c-store environment," she said.

The good news is that 54 percent of retail consumers prefer to purchase snacks on the go, a statistic Ellek shared from a joint study between the National Confectioners Association and SymphonyIRI Group. On quick shopping trips, the report showed 16 percent of respondents preferred non-chocolate snacks, while 20 percent preferred granola bars and 18 percent favored yogurts.

Aside from on-the-go appeal, sales of products with front of package protein information also have been increasing. Manasquan, N.J.-based Supreme Protein's flagship product by the same name underscores its 30 grams of protein on the front package, for one.

Byrne Dairy, a 54-store chain based in Syracuse, N.Y., has experienced success with this alternative snack offering. "Initially, we only slotted one SKU of Supreme [Protein] because it didn't fall into our preferred supplier lines for our warehouse," Byrne Dairy Category Manager Ryan Crowley noted. "Within one month of slotting, however, the product was flying off the shelves. At that time, we contacted Supreme Protein and partnered with them. We became a direct account and expanded the placement of their products for our stores."

Since alternative snacks is a slow but growing segment, like with many other c-store products, placement strategy becomes essential. Tedeschi Food Shops developed a "Healthy Snacks" end-cap, which was started in 2011 by its category manager Dan Powers. "It is placed on the No. 1 or No. 2 end-cap in every store it is in," said Turco, adding that the number of stores with this layout now stands at approximately 150. A full rollout is expected in the coming year.

"The position is based on customer flow in each location to provide the section with maximum exposure," Turco said. "Many of the products on this end-cap are new and not your traditional items you would find in a convenience store."

GAINING MOMENTUM

While weather can sometimes be a factor in snack sales, Turco said sales in the alternative snacks category are not seasonal. "However, due to increased traffic, we see higher sales in the summer months in some areas of the chain," he said. He also noted that healthy or "good-for-you items" tend to sell better in the early part of the year, January through March. He referred to this as the "the New Year resolution theory."

Overall, though, the category has continually picked up sales over the last year. "We have been gaining momentum throughout the chain on an everyday basis," he continued. "We have a category specialist, Sue Calnan, who is devoted to the healthy/good-for-you items in this category among other categories as we continue to focus on the healthy products."

So as to not speak in generalities, Turco supplied some statistics to underscore the performance of this segment. Tedeschi Food Shops, he said, has seen steady growth in alternative snacks year over year for the past three to four years. For 2012 year to date through August, sales were up 14.5 percent in the alternative snacks category as a whole, he said.

Breaking the categories down, meat snack sales were up 7.9 percent and energy bars up 8.1 percent in sales. He added that alternative snacks comprise just 1 percent of total snack sales compared to traditional/salty snacks that deliver 17 percent of overall snack sales.

While Byrne Dairy didn't provide sales statistics, there is a clear indication that alternative snacks are resonating with its customer base. "Since slotting within our breakfast/ nutritional bar section, Supreme [Protein] has consistently outsold similar protein bars. That suggests we are offering a product that is differentiating itself from other items within the category," said Crowley. "Given Supreme Protein's profile as a high-end protein bar, the Supreme customer is more than likely someone who is committed to a healthier lifestyle. That's our customer. Also, in terms of sales revenue, consumers with higher income will typically spend more to get the type of quality that Supreme offers."

One area that more c-stores could capitalize on is fruit/healthy snacks, explained Ellek. "With our NCA Sweet Insights program, we found that 2 percent of the population on any given day purchase healthy snacks compared to 41 percent that purchase confectionery snacks," she said.

What's more interesting, and perhaps counterintuitive, is that whereas the average adult will shop for healthy snacks 15 times a year, children in the age two to 12 segment are the largest consumer in this segment driving sales once a week or more (with parental assistance).

"These healthy products are usually consumed as an afternoon snack after an activity and more likely to be eaten with a lunch," she said. "While we primarily work with confectionery snacks, we do have an annual Sweets and Snacks Expo where we partner with the National Snack Association and others. What we have seen is that the fun and easy aspects of confectionery snacks is now the same compelling motivator for fruit/ healthy snacks."

For comments, please contact W.B. King, Contributing Editor, at [email protected].