According to the Australian Association of Convenience Stores’ (AACS) State of the Industry 2023 Half Yearly Report, Snackfoods remains the fastest growing category, continuing its strong performance in 2022, with a +21.1 per cent growth in the first half of 2023.
Soren Madsen, National Account Manager for Trumps, a Queensland based wholesaler and distributor of nuts and dried fruit, says the healthy snacking category is an ever-changing space as consumers continually seek out new and alternative healthy snacking options.
“We’ve seen considerable growth in the healthy snack category within the petrol and convenience (P&C) channel over the last few years,” says Madsen. “Australians are more health-conscious and more careful with what foods they are consuming, boosting demand and creating more opportunities for healthy snack food retailers.”
Madsen says Trumps is meeting this demand with plans to expand its ‘Snacks to Go’ snack cup range in the new year.
“Our ‘Snacks to Go’ cup range is our most popular product in the channel. We plan to launch new flavours, including dried fruits and natural nut combinations in the new year to provide more variety for consumers” says Madsen. “The ‘Snacks to Go’ cups provide a healthy and convenient snacking experience, fitting perfectly into the cup holder of a car, trolley or even golf buggy.”
Madsen notes that while demand for nut-based snacks has moved away from flavoured options to natural or dry-roasted flavours, he believes there will always be a market for flavoured snacks.
“We have seen a shift in people wanting natural flavours, rather than nuts coated in salt or sugar, however, there is still a big sector of the market who prefer full flavoured snacks. Over the last 12 months, I think the P&C channel has certainly driven the demand for healthier snacking options.”
Within the healthy snack food category, demand for protein-based products like bars and balls has also grown, driven by an expanding gym and workout culture, resulting in many snack food producers adding more protein-based snacks to their product range.*
Following the successful launch of Carman’s Protein Bakes range into P&C in 2021, Carman’s Marketing Manager Lois Tristram says the company continues to innovate and explore different protein-based options to meet varying consumer expectations.
“The P&C channel provides such a great opportunity for Carmans to attract new consumers to our products and trial new product offerings, like our Protein Bakes range,” said Tristram. “The Protein Bakes are a great example of a product that was first launched in P&C, that we later launched in a multipack format in grocery when we saw how much people loved it.”
While protein isn’t a new trend, Tristram notes that it continues to grow in the P&C channel, as well as across grocery.
“One of the key reasons people choose protein is that it keeps them fuller for longer,” says Tristram. “In response, Carman’s launched our Salted Caramel and Peanut Butter Brownie Protein Bakes, each with 10g protein. While Carman’s Oat Slices continue to be our top-performing product in P&C, the Protein Bakes have already grown by almost 85 per cent compared to last year.”
Tristram says the P&C channel plays a key role in the company’s marketing strategy.
“It sounds obvious but the greater the availability of our products, the more likely consumers are to give our brand a try. We want people to be thinking of Carman’s when they’re looking for a healthy snack, and we want our products to be readily available in that moment,” says Tristram.
“The P&C channel is a really important channel for us and a great way to offer on-the-go consumers a little ‘moment of joy’ when they eat our snacks as they go about their everyday lives.
“The COVID pandemic had an enormous effect on the industry – obviously snacking on-the-go slowed right down, but I think we’re seeing that pick back up again as people resume their busy lives”.
Despite the growing consumer demand for protein-based options, Tristram also notes there is a growing fragmentation of what shoppers are looking for in a healthy snack.
“People are looking for ‘better-for-you’ benefits in all different segments, whether that’s lower sugar, higher protein, lower carb or 100 per cent natural. Health means something different to different people. In response, Carman’s includes a variety of options in all of our ranges to cater to different consumer wants and needs.”
Plant-based options on the rise
Kerin O’Brien, Sales Director at Purabon, an Australian based manufacturer of plant-based, wholefood snacks, says more consumers are looking for plant-based snacks with clean ingredients.
“Having clean ingredients in products is becoming more important than ever as consumers care more about eating well and catering to their dietary requirements while shopping for snacks in convenience outlets,” says O’Brien.
“In the P&C channel, our protein and wholefood balls are our most popular impulse snack, often purchased where coffee is sold instore.
“Our plant-based wholefood bars are also designed to provide a more satisfying snack for consumers seeking a larger serve for a quick breakfast or afternoon snack on the go.”
Off-Piste Provisions, a plant-based meat company based in Aotearoa New Zealand, entered the P&C channel last year with its range of plant-based jerky.
Off-Piste Provisions sales manager Will Baldock says the company recognised a gap in the channel for healthy, plant-based snacks.
“Most on-the-go snacking options in New Zealand’s petrol and convenience stores are on the sweeter side; protein bars or anything covered in chocolate,” says Baldock. “There aren’t too many options for people looking for a more savory or nutritious option, leaving the door wide open for plant-based, healthy snacks.”
Despite plant-based snacking being relatively new in New Zealand, Baldock says there is a growing demand for the category.
“The reasons for this may be environmental, or simply due to people being more aware of what they are consuming and therefore wanting a healthier, natural option,” says Baldock.
“When you consider other categories like dairy, plant-based alternatives like oat, almond and soy have become so mainstream, whereas snacking remains an untapped category.”
Baldock believes the main challenge for the industry is pricing and market viability.
“While consumers are willing to pay a little more for a product, there’s definitely a fine line between cost and experience,” Baldock says.
“Due to the current economic conditions, particularly in Australia and New Zealand, people don’t have the same level of discretionary spend which really plays into the P&C channel where many purchases are made based on impulse.
“Ensuring products hit the right price point and provide value to the customer is sustainable for both the business and the consumer, because snacks are an impulse and a luxury which a lot of people are starting to give up.”
A key benefit of being in the P&C channel is that Off-Piste Provisions jerky is sold in the same section as mainstream jerky, says Baldock.
“We’ve found our products sell best when positioned next to traditional jerky snacks. The position gives consumers the option for a plant-based snack, rather than having to go to a separate, health foods section.”
Baldock adds Off-Piste Provisions has plans to expand its product offering in New Zealand’s P&C market ahead of the summer road trip period.
“While we’ve only been in the P&C channel for 12 months, it’s an exciting space to be in. It’s great that retailers are starting to see plant-based as a viable option and are willing to change and adapt to keep up with market trends. We’re looking forward to seeing plant-based alternatives being normalised and becoming part of the everyday mainstream shopping experience.”
No substitute for flavour
Despite current economic pressures, Baldock says consumers are prepared to pay more for a healthier alternative, as long as it provides similar value to its mainstream counterpart.
“We’ve found consumers are willing to sacrifice on some elements of a product, but you still have to give them an enjoyable eating experience whether it’s the flavour, texture or chew of the snack,” says Baldock. “If people don’t find any value in the alternative, they won’t purchase it again.”
Tristram echoes Baldock’s sentiments: “While healthy snacks need to deliver the health benefits consumers are now demanding, taste is key.
“A brand can have the most compelling packaging in the world, but if the product they’re selling doesn’t taste amazing, the consumer won’t purchase it again,” Tristram said. “Consumers typically don’t want to compromise on taste, so there is a level of balancing healthiness with enjoyment when it comes to food.
“I think that’s the key when it comes to positioning and selling healthy snacks in store, don’t just focus on the functional benefits of a product, make sure it continues to meet the consumer’s standards of taste and quality.”
* Health Snack Food Production in Australia – Market Size, Industry Analysis, Trends and Forecasts (2023-2028)| IBISWorld
This article originally appeared in the December/January issue of Convenience and Impulse Retailing Magazine.