Potato Chips, Popcorn Carry Snack Category

Return to 99-cent bags is a hit for convenience retailers

The salty snacks category continued to perform well for convenience stores last year, making up 2.2 percent of in-store sales and 2.5 percent of in-store gross margin dollars.

As usual, potato chips led the way as the driver in the category, posting an increase of 4.5 percent in per-store sales and a 5.8-percent increase industrywide, compared to 2009. Unit volume also increased by 1.1 points — the highest of all segments within the salty snacks category.

In stark contrast to potato chips, tortilla/corn chips fell 5.7 percent in terms of per-store sales, with a sales share decline of 1.1 percent last year. Meanwhile, although both nuts/seeds and crackers saw declines of 3.4 percent and 7.0 percent respectively in 2009, both segments posted slight increases in 2010. Nuts/seeds increased 0.1 percent, and crackers saw a 0.5-percent increase per store, with a 1.4-percent and 1.7-percent increase industrywide.

Aside from potato chips, the biggest percentage increase in the salty snacks category came from ready-to-eat popcorn; however the increase was not as dramatic as in 2009. Popcorn saw a 3.6-percent increase in sales per store in 2010, compared to a 17.6-percent jump the year prior.

Most c-store retailers were happy about Frito-Lay's return to 99-cent bags vs. $1.29 bags. Even with less weight/product, the price point was a hit and limited-edition snack shippers contributed to the category's success, according to retail buyers. In December 2010, Frito-Lay also announced plans to switch more than six dozen varieties of its products to all-natural ingredients by the end of 2011, with Lay's, Tostitos and SunChips leading the way. The company cited the trend of consumers looking for more natural ingredients as the key driver behind the change.

On the sweet snacks side, sales dropped in c-stores by 1.8 percent last year in terms of per-store sales, and by 0.6 percent industrywide.

Aside from sweet and salty snacks, a bright spot in the overall snack category last year was the alternative segment, which includes meat snacks, health/energy bars and granola/yogurt bars.

The largest percentage sales increase among alternative snacks was seen in health/energy bars, with an 8.8-percent bump in per-store sales. Following that was the “other” category that includes rice cakes, trail mix, yogurt raisins, etc., with a 7.1-percent increase.

Granola/yogurt bars also posted a 5.6-percent increase in per-store sales, while meat snacks — which represent the largest share of the alternative category at a 63.8-percent share — increased its sales by 3.5 percent per store last year, the CSNews Industry Report showed.

— Tammy Mastroberte