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08/08/2016

The Meat of the Matter

Much has been written lately about the rise of snacking, as more and more time-pressed consumers opt to replace regular, full meals with on-the-go snacking. Much has also been written lately about the rise of better-for you, with snackers increasingly seeking out more healthful products, particularly those that boast protein and all-natural ingredients. Fitting perfectly into all this conversation is the meat snacks segment, which is enjoying a “nationwide surge” thanks to factors like nutrition, innovation, changing tastes and increasing product variety, noted Tim Powell, vice president of consulting at Q1 Consulting Services.

The meat snacks market was worth $2.5 billion in 2015 and it’s important to note that 80 percent or $2 billion of those sales were accounted for in convenience stores, Powell said. That’s because consumers turn to meat snacks to satisfy the need for fast fuel, and c-stores are the go-to destination to fill in the gaps between meals.

For two consecutive years, the meat snacks segment has led the alternative snacks category in year-over-year growth, according to the latest annual Convenience Store News Industry Reports. In 2014, average sales per store of meat snacks saw a 10.3-percent rise to $8,528. Strong gains were made again in 2015 when average per-store sales ticked up another 6.5 percent to $9,082. Overall, the total industry saw a 7.7-percent increase in meat snack sales last year.

In addition, a recent study conducted by Datassential and Tyson Convenience found that: more consumers indicated they purchased bagged jerky in the past three months than any other type of off-the-shelf snack food from convenience stores, except for chips or pretzels; and nearly 90 percent of c-store operators said bagged jerky is at least “somewhat important” to the success of their business. This study was fielded between September and November of 2015.

“The [meat snacks] category continues to grow since it is ideally located at the intersection of snacking trends and consumer demand for protein,” Rob Ramsey, senior marketing manager for Tyson Convenience, told CSNews. “New brands, flavors and formats have the potential to bring new consumers to the category, which will drive growth.”

MEAT SNACK DYNAMICS

Meat snacks are an example of how all snacks are not created equal in terms of meeting specific consumer needs. “More of a mini entrée, the overall appeal of jerky is that it is a more satisfying snack … It fills you up,” explained David Lakey, senior vice president of marketing at Oberto Brands, adding that meat snacks have historically been different from other snack foods.

Meat snacks were once perceived as unhealthy, redneck and only appropriate as a snack for long drives, Lakey acknowledged. But this dynamic has changed as the c-store market has begun to brim with more variety for consumers as they seek out flavorful, better-for-you options.

“Jerky has been a category that s been around since the beginning of time,” echoed Bart Silvestro, CEO of Chef’s Cut Real Jerky. “The more you talk to consumers, you hear they’re looking for sustainable snacks between meals, as well as looking for lean and better-for-you products. Low in carbs, low in fat and high in protein, jerky meets that in many aspects.”

Consumer mindfulness around protein is “on fire,” added Silvestro, and this has been ongoing for the past few years. Protein as a selling point got its start with protein bars, then moved over to Greek yogurt, and now the high-protein halo has moved to jerky products.

Another selling point of meat snacks is product innovation. It’s no coincidence that as sales are surging, innovation in the segment is also rapidly on the rise.

Beef jerky still accounts for a hefty majority of the segment (79 percent), per IBISWorld data. However, poultry jerky, like chicken and turkey, has become the fastest-growing flavor profile. Game jerky is also seeing a rise in popularity, represented by double-digit growth in 2015.

New flavor profiles provide further proof that jerky innovation is not slowing down. For instance, Perky Jerky’s Jammin’ Jamaican Turkey Jerky, Brewmaster’s Pale Ale Turkey Jerky, and BBQ with Seoul Beef Jerky appeal to millennial consumers. Meanwhile, Jack Link’s Squatch Snack Sticks with Bacon and Cheddar are also suited for a younger demographic, while its Small Batch Maple Bacon Jerky capitalizes on the bacon mania craze.

“Turkey jerky is continuing to grow in popularity as consumers seek a healthier alternative to the more traditional beef jerky,” observed Brian Levin, CEO of Perky Jerky.

With demand for more transparency and cleaner ingredients, Levin also predicts there will be a shift in sourcing antibiotic-free, grass-fed beef among the next generation of jerky brands.

As for future flavor innovation, Oberto’s Lakey believes flavor-forward innovation is less about spicy and more about interesting flavors that are not polarizing. He foresees sea salt and other cuisine-inspired flavors that are becoming mainstream making their way over to the meat snack aisle soon. “Some products may be appealing to 5 percent of consumers, but not to the other 95 percent,” he cautioned.

Format innovation is also gaining steam. Suppliers in the segment point to bars and trail mixes as the next up-and-coming meat snack formats.

“We’ll be seeing creative, new ways that get consumers to engage with the jerky category by reframing it into mainstream categories like energy bars and trail mixes,” noted Ramsey at Tyson Convenience. “Trail mix, bars and other alternative formats fuse the savory, protein-rich meat snacks with other ingredients, like nuts and fruit, and then package them into new and exciting consumer snacking platforms.”

HOW C-STORES CAN CAPITALIZE

Meat snack suppliers are optimistic about jerky’s prospects for the foreseeable future and they’re equally bullish on the role convenience stores will play in the category’s continued growth.

Silvestro of Chef’s Cut advises c-store operators to be proactive. “What you hear from c-store meat snack buyers is the paradigm is shifting,” he explained. “C-stores are changing their layouts and putting better-for-you products up close, and separating it from hot dogs and candy bars. This will only grow the jerky category.”

Lakey of Oberto’s advice for c-store operators is to monitor shopper research because it will show which key flavors, brands, formats, etc., consumers want to find when they shop. However, he cautions retailers to make sure they don’t overdo it.

“With limited space, [retailers] have to decide how to not over-SKU. Shoppers want to come to a section they see is for them — offer variety not strictly based on velocity, like offering 15 items from a traditional brand,” he advised. “Don’t miss out on new users and new occasions.”