Product Showcase

EMBRACING SNACKING

David Arens, division merchandise manager for the Army & Air Force Exchange Service (AAFES), which operates 589 Express convenience stores and 122 main stores, said salty snacks are the leading category, up 9% over last year for the chain.

“Since the beginning of the COVID-19 pandemic, stores have seen shoppers embrace snacking more,” Arens said. “As shoppers are staying home more or choosing to gather at homes, snacking overall has increased. Shoppers are also looking for the ready-to-eat convenience of snacks.”

Two-for offers continue to do well at c-stores across the nation as well as at Express stores. Secondary displays and shipper displays have provided a reliable lift in sales. Tie-in and cross-promotional offers such as snack-andbeverage combo deals have performed well.

SUPPLY & MERCHANDISING

With supply chain issues continuing, handling out-ofstocks has become a crucial task. Express stores work closely with vendor partners to know when product will be available and identify those that may be out of stock for an extended period. Retailers are supplementing inventory levels by exploring alternative vendors and making one-time buys for new brands, which also increases assortment variety.

As supply chain issues and inventory strains continue to pose challenges, Arens said stores are staying flexible and creative to keep shelves stocked and continue providing shoppers with the products they want.

“The snack industry is forecasted to continue growing,” Arens noted. He expects to see better-for-you snack items such as gluten-free, low-sugar and organic snacks continue to drive categories.

Promotional offers and execution will continue to serve as the drivers of snack sales increases, Arens said.

“Ensuring clear, attractive and well-placed signage for promotions will help,” he said. “Creating promotional events to tie in categories such as chips and a roller grill item help increase the basket.”

The snack category will continue to see so-called ‘aspirational foods’ making waves within the industry. With consumers striving to better themselves, more organic options will also become easier to access, as well as more options with nutritional callouts, like protein, collagen, low-sugar, low-fat and low-sodium.

Consumers today are better educated than they’ve ever been, and they expect the brands they support to align with their heightened expectations. CSD

Snack Sales Trend Upward

Snack dollar sales rose across segments at convenience stores for the 52 weeks ending March 20, 2022.

Dollar Sales

Product

Bakery Snacks Cookies

Current 1-Year % Change

$960 M 17.1% $924 M 15.8% Dried Meat Snacks $2.2 B 19.6% All Other Dried Meat Snacks $1.23 B 18.0% Jerky $967 M 21.8% Dry Fruit Snacks $138 M 35.1% Other Snacks $375 M 19.3% Nutritional Snacks/Trail Mixes $198 M 11.8% Chocolate Covered Salted Snack $168 M 30.2% Carob/Yogurt Covered Snack $8.12 M 6.5% Apple Chips $450,085 22.6% Salty Snacks $6.26 B 15.1% Potato Chips $1.9 B 14.8% Tortilla /Tostada Chips $1.34 B 18.4% Other Salted Snacks (No Nuts) $902 M 10.2% Cheese Snacks $880 M 13.1%

Corn Snacks (No Tortilla Chips) $469 M 20.6% Pretzels $295 M 23.9% Ready-to-Eat Popcorn/Caramel Corn $254 M 12.6% Pork Rinds $214 M 7.5% Snack Bars/Granola Bars/Clusters $782 M 21.4%

Source: IRI OmniMarket Total Store View, Total U.S. Convenience data for the 52 weeks ending March 20, 2022.

fast facts:

• Salty snack dollar sales grew 15.1%, while dried meat snack dollar sales ticked up 19.6% for the 52 weeks ending March 20, 2022. • As supply chain issues continue retailers are staying flexible and creative to keep shelves stocked.

SWEETS & SNACKS EXPO

There have been several landmark decisions

shaping the tobacco/nicotine category for convenience stores.

The 2007 Tobacco Control Act granted the Food and Drug Administration (FDA) market authority over tobacco products. In 2016, the agency deemed vape products as tobacco products.

And with the passage of the omnibus budget bill in mid-March, Congress amended the definition of tobacco products as “any product made or derived from tobacco, or containing nicotine from any source, that is intended for human consumption.” The language “containing nicotine from any source” now places synthetic nicotine products under the FDA’s authority.

“It was always a matter of when, and not if, the FDA would gain regulatory authority over synthetic nicotine. Without enforcement discretion or court injunctions, the effect on c-stores will be felt most in synthetic nicotine pouches and disposable vaping devices,” said Gregory Conley, president of the American Vaping Association.

What’s more, the timeline for manufacturers to apply for and gain authorization is limited. Manufacturers of synthetic nicotine products on store shelves as of April 14 have until May 14 to submit pre-market tobacco applications (PMTAs).

“NACS is advising any retailers who sell synthetic nicotine products to verify with the manufacturers of those products that they have submitted PMTAs by the May 14 deadline. If they have not submitted PMTAs, any retailers selling the products must remove them from shelves by May 14 or possibly face enforcement from the FDA,” cautioned Anna Ready Blom, director of government relations for the National Association of Convenience Stores (NACS).

Items with an accepted PMTA can remain on sale until July 13. Eligibility beyond that depends on the FDA’s final ruling.

Additionally, any product that had already been through the PMTA process, but denied market approval, cannot reapply. Nor can any tobacco-derived product that was modified to use synthetic nicotine after receiving a market denial order.

2022 Synthetic Nicotine Market Approval Timeline

MENTHOL MAKEOVER

Meanwhile, the industry still awaits the FDA’s decision on a nationwide menthol ban.

“NACS strongly opposes a ban on menthol cigarettes and flavored cigars because it will push users to the illicit market, undermining the efforts and investments of responsible retailers in our industry,” said Ready Blom. “If the FDA moves forward with the rulemaking, NACS plans to file comments on behalf of the industry, and we are also planning to organize a comment campaign where retailers can file individual comment letters.”

However, not all stores will be impacted equally. Some retailers may experience minimum change.

“The proposed menthol ban does not affect us as most of our locations are rural, and menthol cigarettes are a very small percentage of our overall cigarette sales,” said Sean Bumgarner, vice president at Scrivener Oil Co., which operates 12 Signal Food Stores in southwest Missouri.

CITY LIMITS

Conley said flavor bans remain a hot topic, with state proposals in Illinois, Connecticut, Maine and Hawaii. However, he believes the movement for bans has slowed.

“Thus far, we have been pleasantly surprised at the reticence displayed by some state legislators to target tobacco and nicotine products. After

two years of pandemic-related business interruptions, youth vaping on the decline and news of FDA actions, some are understanding that this issue can’t be • March 15: of tobacco Congress amended the definition products as “any product made or properly addressed with new prohibitions,” he said. In California, a statewide flavor ban was derived from tobacco, or containing nicotine postponed during a petition drive to turn it from any source, that is intended for human into a ballot issue, for which it qualified. This consumption.” fall, voters will make the decision. • April 14: FDA authorization takes effect. Perhaps the most assertive local regulation • May 14: Deadline for manufacturers of synthetic nicotine products on store shelves is the birth date cutoff, instead of a minimum age, in Brookline, Mass. No one born later than Jan. 1, 2000, can buy any as of April 14 to submit pre-market tobacco tobacco/nicotine product within the city. applications (PMTAs). Items without accepted Local c-stores immediately filed a lawsuit

PMTAs must be removed immediately. claiming the ordinance unfairly penalizes • July 13: Items without FDA market approval their businesses and denies some adults must be removed from shelves. access to the lawful products. At this time, no additional action has been taken. On a more encouraging note, the FDA granted a few market approvals last year, including Vuse Solo and two of its tobacco-flavored replacement pods. In December it granted a modified-risk market order for 22nd Century Group’s VLN King and VLN Menthol King combustible cigarettes, a first for the category. This year, it is expected to decide on the outstanding PMTAs. “We are watching the news one day at a time while monitoring our inventory conditions to ensure we avoid any large on-hand situations,” said Ben Brooks, category manager for Nouria Energy. The Worcester, Mass.-based company operates 146 convenience stores across five states. “We are also ensuring with our vendor partners that if a product needs to be removed from the shelf, we will have an avenue to return the product.” CSD fast facts: • Congress amended the definition of tobacco products as “any product made or derived from tobacco, or containing nicotine from any source, that is intended for human consumption.” • The National Association of Convenience Stores plans a letter-writing campaign if the Food and Drug Administration pursues a menthol ban. • This fall, California voters will decide on a flavor ban.