Snack Sales Outlook

Salty and meat snack sales hold steady in c-stores despite inflation and competition from e-commerce as more customers shop online.

Howard Riell • Contributing Editor

Both meat and salty snacks remain bulwarks of the convenience store industry. And during uncertain economic times, with other staple product categories facing some very real challenges, bulwarks are a good thing to have.

“Both (salty snacks and meat snacks) are good categories that saw growth in 2022 and should grow in 2023,” predicted Rich Abel, director of stores for Bakersfield, Calif.-based Jaco Oil Co., which operates the 54-unit Fastrip Food Stores chain. “Both are bright spots on a category map that has a lot of wounded/ casualties — tobacco, vape, beer — expected in 2023.”

According to GlobalData’s Q4 consumer survey, 58% of people in the U.S. are “extremely” concerned about how inflation and rising costs may impact their household, reported Khalid Peerbaccus, senior innovation researcher at GlobalData. “Given convenience stores’ position as marked up in price, brands would do well to highlight the value aspect of their offerings and emphasize the quality of the ingredients. While low-price/cheaper snacks are favored by 27% of consumers, 31% believe that high-quality products or ingredients equate to ‘good value for the money.’” Salty and meat snacks had strong sales at c-stores throughout 2022. For the 52 weeks ending Oct. 30, 2022, the convenience store channel saw sales of dried meat snacks reach $2.2 billion, a 4% increase, according to Ryan Stredney, senior public relations specialist, marketing for IRI, a Chicago-based market research firm. Within the category: • All other dried meat snacks saw sales of $1.3 billion, up 8.8%. • Jerky accounted for just over $914 million, a decrease of 2%. For the broad salty snacks category, sales for the same period topped $6.9 billion, up an impressive 16.9% over the previous year. Inside that category: Potato chips led the way with nearly $2.1 billion in retail sales, a sharp increase of 15.3%. Tortilla/tostada chips registered sales of $1.5 billion, a 23.3% gain. Cheese snacks garnered sales of $981 million, up 17.9%. Other salted snacks (excluding nuts) reached sales of $928 million, up 14.6%. Corn snacks (excluding tortilla chips) notched sales of just over $621 million, a 14.7% rise. Pretzels saw sales of nearly $322 million, up 15.7%. Ready-to-eat popcorn/caramel corn recorded sales of just over $286 million, a gain of 16.5%. Pork rinds recorded sales of more than $221 million, up 6%.

CHALLENGES & OPPORTUNITIES

But convenience stores face mounting competition from e-commerce when it comes to snack purchases.

“In the U.S. convenience channel, the total value of savory snacks was $15.2 billion in 2021, and this is predicted to grow to $15.7 billion at a compound annual growth rate (CAGR) of 0.72% by 2026,” said Peerbaccus. “In contrast, e-retailers will see substantial growth from $5.5 billion to $14.8 billion over the same period, at a CAGR of 21.6%. This highlights the challenges evident in the convenience channel, which has been severely affected since the 2020 outbreak of COVID-19. Consumers have become more reliant on online purchasing for their snacks.”

Within the c-store snack category, meat snacks were valued at $1.2 billion in 2021, and the category is expected to see a CAGR of 5.2% by 2026 to reach $1.6 billion, Peerbaccus said. At the same time, potato chips are expected to decrease by a CAGR of 0.7%, from $4 billion in 2021 to $3.9 billion in 2026, while popcorn will grow from $1.2 billion to $1.6 billion at a CAGR of 5.1%.

“The reason for the decline in potato chips in comparison to popcorn could be the perceived health benefits of popcorn versus potato chips,” Peerbaccus explained. “Many people have also invested in homecinema systems since the pandemic, which has helped to prompt interest in ‘cinema food’ such as popcorn.”

Manufacturers of snacks like potato chips, which are perceived as less healthy, will continue to trumpet the low-salt content of their products. According to GlobalData, 43% of U.S. consumers agree that low-salt content is preferable in food and drinks, and 34% deem it essential.

Opportunity lies in newness, as customers are driven to taste test new snack flavor innovations.

“GlobalData’s research reveals that 38% of shoppers are willing to try the newest food flavors as soon as they are available, with curiosity cited by 57% as being the main motivating factor,” Peerbaccus explained. “Snacks that feature unexpected flavors may therefore be favored by those shoppers, who may seek some respite from the stress and uncertainty of the current cost-of-living situation.” CSD