There are more than 14,000 uses for salt! One of the more familiar and popular is to make food tasty. In particular, salt puts ‘oomph’ into bland starches such as potato, corn, rice and wheat and brings out the flavour of roasted nuts.
Salty snacks are becoming increasingly important to consumers as they change their eating habits. With people working longer hours and more working people in the household, there is a shift away from three home-cooked meals each day towards ready-to-eat food, grazing and snacking. More and more, people are grabbing a snack while at work or going to and from work in the car. This fundamental shift in behaviour is leading the growth in consumption of salty snacks.
According to the 2003 survey by the Australian Association of Convenience Stores (AACS), salty snack foods contributed about 2.5% of non-fuel sales and earned gross margins around 40%. Salty snacks are relatively more important to smaller stores with a smaller product range. Overall growth of 2.5% hides fast growth for nuts, pretzels, extruded snacks and corn chips, with potato chips, the stable staple of the category. Overall, 48% of consumers eat a salty snack at least once a week, and a bag of potato chips is still Australia’s third favourite snack. There is further scope for growth if Australia follows trends in the United States and the United Kingdom, where they eat salty snacks more often.
Salty snacks are increasingly important to convenience retailers, when you consider over 80% of all shopping trips are considered top-up shops.
“ The opportunity for convenience lies in getting their fair share of the salty snack consumption occasions,” says Nancy Roxburgh, Category Manager, The Smith's Snackfood Company.
John Chatterton, Marketing Director, Arnott’s Snackfoods, agrees. He says that convenience retailers need to recognise which of their products are impulse - and which are not.
“ Seventy percent of salty snack sales are impulse,” says John Chatterton. “This is one of the highest percentages. If customers see a great display with the products they want, they decide to treat themselves. Retailers need to place impulse categories in impulse areas and achieve a balance between chewing gum, confectionery and salty snacks.”
Salty snacks are consumed more often
than confectionery, according to Australia 5W’s Study of 2003.
Two major suppliers share the salty snack market – Smith’s with
61% of sales through C-Stores as measured by ACNielsen C*Track and Arnott’s
with 34%. Australian Convenience Store News asked them both ‘what’s
what?’ in the salty snack category this year.
Sales of Smith’s salty snacks products grew more than 20% in C-Stores in 2003, and were growing at 33% in the quarter to June 2004. Smith’s attributes its exceptional performance to strong brands and a strategic focus on quality and service.
“ Our aim is to have the best quality with consumers as well as be the best supplier to retailers,” says Nancy Roxburgh.
Smith’s won the AACS award for Grand Champion Supplier of the Year in 2003 and the Best Direct-to-Store Supplier this year. The AACS survey takes into account operational performance, service levels and customer (retailer) satisfaction.
A major trend is ‘premiumisation’.
“ Consumers want something a bit special, and this is reflected in the sales performance of Arnott’s Kettle range,” says John Chatterton.
Sales of the Kettle brand in convenience grew between 13% and 15% in each of the past three years and, according to ACNielsen data (MAT to 30 August 2004), the brand now has a 13.1% share of the potato chip sales.
Nancy Roxburgh agrees: “Growth
in sales of Red Rock Deli chips confirms this trend.”
“
For the retailer, premium means higher dollar sales and higher gross margin,” adds
John Chatterton. “This needs to be reflected in shelf space. Retailers
need to give more space to the more profitable and faster-growing brands.”
Salty snacks work well as components of meal deals. For example, a deal that brings together a sandwich, a packet of chips and a soft drink lifts a $2 sale to an $8 sale. This is an extension of the tried and true combo of salty snack and beverage. The combo continues to work because salt makes you thirsty.
“ Data shows that they are eaten together, but not necessarily bought together,” says Nancy Roxburgh. “There are opportunities in co-location and bundling to increase sales.”
As with combos, promotions still play an important role in the category. The Smith’s Tazo and Arnott’s Snackfood’s Crash Bandicoot insert promotions appeal to the younger consumers who tend to be frequent purchasers of salty snacks.
To coincide with the Olympics in Athens, Smith’s new flavours are inspired by the Mediterranean. Their new Smith’s Postcards from the Mediterranean range (Greek Feta and Herb Crisps, Italian Tomato and Basil Crisps and Italian Cheese Crinkles) is supported by substantial TV advertising.
Similarly, the new Red Rock Deli flavour, Tomato, Basil and Bocconcini, takes its inspiration from southern Europe.
Arnott’s turned to the sub-continent for their inspiration when they introduced a new flavour, Spicy Indian Masala, to the Kettle Sensations range in July 2004, hot on the heels of new Kettle Crunch in April.
Twisties on the other hand, appeal to kids and the latest innovation in the range is Twisties O’s & X’s Hawaiian Pizza, supported by TV advertising and sampling. In February this year, Arnott’s Snackfoods launched Cheezels Minis. Offering smaller sized rings than its ‘big brother’ Cheezels Original, Minis were designed especially for smaller mouths and hands.
Reflecting the growth in the consumption of nuts and ’premiumisation’ of the category, Arnott’s launched Kettle Nuts in October 2004.
“ Nuts are identified as a good low-carbohydrate snack option,” says John Chatterton. “No-one has done much with nuts recently, and we think this part of the category had gone a bit stale. Yet, overall, nuts are the third largest product group (after crinkle-cut chips and flat chips) in the category.”
The launch consists of two ranges: Kettle Nuts Sea Salt range (peanuts, cashews and beer nuts), and Kettle Sensations (Jalapeno Chilli Peanuts, Honey BBQ Cashews, Spicy Balsamic Vinegar Peanuts, and Mild Chipolte Chilli Cashews), all available for sale in the impulse channel in 50g packs.
The Kettle Nuts range was launched in supermarkets in September and made its debut in convenience chains on 1 November. To support the launch, Arnott’s is supplying POS especially designed for the convenience channel.
“ Nuts and chips are not easy to display together,” says John Chatterton. “Kettle chip and nut display incorporates nuts without compromising chips. It is a smart use of limited display space.”
Australian Convenience Store News, and others, had expected ‘healthy’ snacks to have made bigger inroads into the category than they have. For example, Rix rice chips which entered the market strongly, did not sustain sales.
“ Rice chips did not deliver on taste,” says John Chatterton. “Consumers just aren’t willing to sacrifice this when it comes to salty snacks. Developing a great tasting, better-for-you product for the category remains a challenge for all manufacturers.”
The humble pretzel may defy this trend, although the newest Parkers Pretzel flavour is Cheese and Cracked Pepper.