Innovation is the key to boosting salty snack sales

The $202 million snack foods category continued to grow in 2020, with consumers seeing snacking as an important source of comfort, connection and community. However, that growth was at a reduced rate to what we saw in the previous year.

The Australasian Association of Convenience Stores (AACS) State of the Industry (SOI) Report 2019 showed that snackfoods had a growth of 4.1 per cent, which was the strongest in three years. However, on a MAT basis, in the AACS SOI Half Yearly Report 2020, that rate of growth had slowed to 0.1 per cent.

As with a number of categories, the first half of the year took its toll and, in the quarter leading up to the release of the AACS SOI Half Yearly Report 2020, snackfoods saw a decline of 6.9 per cent. Chips declined 3.6 per cent in that period, with nuts declining 14.3 per cent and popcorn declining 41.9 per cent.

Chips remained the largest category in snackfoods, representing an 80 per cent share and remaining in growth of 2.7 per cent on a MAT basis.

Innovation plays an important role in the category’s success and represented 5.6 per cent of total sales in 2019. That trend continued in 2020 with 3.7 per cent of salty snack sales through the convenience channel coming from new products launched over the last 12 months.

Snackbrands Australia has recognised the importance of innovation and in February launched its Tyrrell’s Crinkly Cut Crisps into the convenience channel.

“Innovation is enormously important to the snacking category. News drives excitement and consumers are always keen to try the next new flavour or product format,” says Debbie Schubert, Shopper Marketing Manager, Snackbrands Australia.

“We continue to see a shift into more premium products with wellness call outs like ‘vegan’ and ‘nothing artificial’ (vegan is currently the number two search term when consumers are looking for snacks online in the US),” she says.

“Tyrrell’s Crinkly Cut Crisps are triple cooked for more crunch and come in three flavours, Lightly Sea Salted, Mature Cheddar & Chives and Sea Salt & Vinegar, two of which offer 3.5 Health Star Ratings. 

“For those who look for vegan options, the Lightly Sea Salted and the Sea Salt & Vinegar are good choices.”

Schubert says that the growth of premium and ‘better for you’ snacks are two major areas of focus for Snackbrands Australia.

She highlights that crinkle cut chips are the biggest selling segment in the petrol and convenience channel and that Tyrrell’s are the first premium crinkle cut chip available on the market.

When it comes to ‘better for you’ snacks and the growing interest in vegan and plant-based foods, this is a trend that has also been recognised by dried meat snacking company D.Jays Gourmet, which is in the process of developing new products to meet those demands.

“While we are an air-dried beef company, we certainly can’t ignore the trend towards more sustainable food sources and the growing rate in vegetarianism and veganism,” says Arron Zamel. “D.Jays is trying to stay ahead and is starting to develop a vegan plant-based jerky so we can continue to serve a larger customer base.

“Consumers are always looking for new flavours and different snacking ideas. D.Jays has a core range of flavours and products that has served us well for some time, but as consumer likes and preferences change we are constantly adapting to meet new trends and provide exciting flavours. In saying that though, we have always found our original core range of flavours still performs the best.”

According to the AACS SOI Report 2019, ‘better for you’ snacks have increased share of snackfoods from 45 per cent to 51 per cent.

Nuts, jerky and rice snacks delivered the highest percentage of growth at 8.3 per cent; however chips delivered the greatest value contribution.

“D.Jays offers a large range of products to the convenience channel and there is a current surge for our sliced biltong packets due to the value pack offering of 120g of biltong, which retails between $10 and $11. This product offers some of the greatest value on a dried meat snack product for everyday prices,” Zamel said.

“Our consumers vary across the board from young to old and men and women. In petrol and convenience outlets with our Truckin’ Good Jerky offering we are certainly targeting people who work on the road and within trades. However, we obviously have a following within the South African community looking for a taste of home with our biltong range.

“There is also a growing trend for high protein, low in fat snacking and with the emergence of the keto diet we have many health conscious consumers looking for new and exciting flavours to snack on,” says Zamel.

Snacking was already a rapidly increasing behaviour, but this only accelerated as consumers were forced to spend more time at home.

According to the 2020 State of Snacking Report by Mondelëz International, 54 per cent of global adults relied on snacks for nourishment during the pandemic. Sixty-four per cent attested that snacks were nourishing to their body, mind, and soul during these strange times.

A majority were more mindful snacking at home, saying they are more focused on the snacks they eat these days (57 per cent), and that they have more control over the portions they eat because they are snacking at home more often (66 per cent).

More than half of global adults (53 per cent) were buying nostalgic snack brands from childhood and 59 per cent said they were buying snacks that brought back good memories during the pandemic.

This is evident through the way Snackbrands Australia’s brands have been performing in the convenience channel. Schubert says that despite the challenging year, their brands are in healthy shape, and calls out the performance of nostalgic products such as Cheezels and Kettle in particular.

“Kettle is the fastest growing slow cooked chip brand, growing at eight per cent (MAT to 22/11/20) with both ‘eat now’ and ‘sharing pack’ sizes in growth,” she says.

“Cheezels is growing at 3.8 per cent (MAT to 22/11/20); driven by the incredible growth we are seeing from home delivery. Our Cheezels 190g Party Pack is up a whopping 34.4 per cent over the last 12 months, the launch of Cheezels Chilli Cheese 80g has also struck a chord with consumers.

“We are seeing greater numbers of consumers utilising retailer home delivery services offered by convenience retailers, the ability to order your favourite products and have them delivered to your home continues to grow in popularity,” says Schubert.

Advice for retailers

When it comes to making the most of the snack foods category in retail, it’s all about the path to purchase and having eyecatching displays positioned thoughtfully within the store to interrupt the shopper’s journey and attract impulse spend.

For suppliers, the priority should be to create eye-catching packaging and promotional materials, says Zamel from  D.Jays Gourmet.

“Ensuring that your customers see our products in your store by placing items at eye level is a great start,” he says.  “D.Jays does everything we can to attract a wide range of consumers to our products through innovative and eye  catching packaging.”

“We also are happy to communicate with our retailers about offering special deals and offers to attract customers to the brand as well helping provide new and eye catching display materials.”

For Schubert from Snackbrands Australia, it’s all about disrupting the shopper’s journey and capturing that impulse spend.

“Off location displays are hugely important for products in impulse categories like salty snacks; I’d encourage all convenience retailers to interrupt shoppers on their way to the checkout with more off location displays.

“Petrol and convenience is hugely important to our brands, it provides us with an opportunity to develop a real relationship with consumers and is integral in building strong enduring brands,” she says.

So, the snack foods category and salty snacks in particular remain critical within petrol and convenience, having seen consistent growth over the past 24 months.

For retailers to make the most of this category, it’s important to stay informed about new releases and innovation, and to make sure they are working with suppliers to ensure products are being displayed in the best possible way to capture the attention of shoppers.

This article originally appeared in the February / March issue of Convenience & Impulse Retailing magazine.

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