Growing Snack Sales

Sunflower seeds, which have quietly built a loyal following both as planned and impulse purchases, are garnering more shelf space these days as c-store retailers expand this category.

Randy Adams, buyer for Huck’s Food and Fuel in Carmi, Ill., found that sunflower seeds have proven so popular that when he recently completed a nuts and seeds reset in all of Huck’s stores, he needed to tighten up the pegboard to add a fourth row of merchandising to accommodate several new SKUs and package sizes in the nut and seed category.

“Mostly we’ve done a lot of swapping out,” Adams said. “We added a Carr’s brown sugar crunch item in tubes that’s doing very, very well since it came out a few weeks ago, and a Carr’s shelled peanut. It’s the first time in several years we’ve actually had a plan-o-gram spot for them, but I think they’re going to do pretty well.”

Even so, Adams had to remove some nut and seed offerings due to space constraints. “The yogurt apple mix had to go in order to bring in the brown sugar crunch,” Adams said. “But the raisin almond mix is doing well, so much so that we added a larger bag.

Probably, Adams biggest change came about because Huck’s does so well with corn nuts, which the chain has always carried in 1.8-ounce bags. “This time we decided to add four SKUs of the hanging bags, and they’re doing just amazingly well,” Adams reported.

New Products and New Markets
Adams has also added new products, some that target new markets as well. “We added Planter’s Pepita, which is our first stab at Hispanic products, and a caliente corn nut that’s Hispanic as well,” he said. “Also, two Planter’s peanut items, a chocolate peanut and chocolate cashew. We’re not seeing a lot of sales on that yet, but it’s only been out a short time.

The recent pistachio nut and peanut product recalls didn’t really hurt sales, but temporarily devastated sets, Adams reported. However, he’s too busy watching trends to worry about that.

“With the recession coming on and gas prices going up again, my concerns are about consumers looking for lower rings,” he said, adding that, right now, he also sees customers switching to healthier foods. “I don’t know why that would be happening all of a sudden, but the healthier items in these last couple of sets I’ve brought in have also been the bestsellers. We’ll have to give it a few months and see.”

Huck’s is experiencing incredible growth in the salty category overall on par and nuts and seeds “We’re outpacing the national growth on all of those, which is pretty exciting, and expect this year to be even better than last,” Adams said.

Huck’s has added some 44 items in the salty, nuts and seeds categories without deleting much, just by tightening up the sets and re-positioning the shelves. “I think we brought in some real winners,” Adams said. “Our overall sales are up. We’ve done some great advertising and a lot of good work in our stores. It’s been a total company focus, and it’s paid off.”

Category Focus Pays Off
Tim Grossi, category manager for LaPlata, Md.-based Dash In Food Stores, said the amount of shelf space in his stores allocated to nuts and seeds is also up slightly as the category holds strong. “It’s about focus,” he explained. “Right now we’re getting ready to run a trail mix promotion and are focused on that.”

Since February, Grossi has completely reset all the Dash In stores, which are now printing their own tags in the back and introducing new products as employees change out the old tags. “We introduced this tagging system to minimize out-of-stocks throughout the summer and hope our in-stock condition will be much better with this reset,” he said.

With that reset, Grossi said all of the stores are set to the plan-o-gram he introduced in January. “Our plan-o-grams are flexible, so we can move quickly on new items,” he said. “If you don’t have flexibility to change products more than once every two or three months, with all the items being introduced, then you’re not really showing the customer anything that’s really new…just new to your stores.”

Grossi isn’t doing any cross-promoting with the seeds and nuts category right now, choosing instead to run a series of manufacturers’ coupons from Kraft. “I partner with Planter’s on most of the nuts and seeds, so I use whatever coupons they have in our stores,” he noted. “We also have a program called Seeing Double, which nuts and seeds could rotate through, and if we get a shipper program that has nuts and seeds associated with it, we’ll do that as well.”

Recent recalls and food warnings didn’t impacted nuts and seeds sales, but did affect peanut butter snack crackers. “We stopped carrying our number one cracker, which was Keebler extra large peanut butter Nabs, and I’ve switched over to more chips at this point,” Grossi said.

Grossi has begun promoting more aggressively than he used to. “It’s more defensive than anything because of the economy,” he observed. Dash In promoted DSD chips throughout last fall and for the first three months of this year for Super Bowl and March Madness fans.

“The promotions did a good job of driving foot traffic, but chip margins are lower,” Grossi said. “Margins are down, but sales are up.”

Healthy Still a Tough Sell
Though dietitians still advise limiting the amount of nuts and seeds for snacks because of their high fat content, Jared Sturtevant, director of category management for Canastota, New York-based Nice N Easy Grocery Shoppes, said he hasn’t observed customers concentrating on healthier snack alternatives to a great extent.

“We’ve seen healthy growth in both units and dollar sales,” Sturtevant said.

Though he’s seen a decline in the unit movement of candy bars, Sturtevant cautions that it might not be an indication that customers are shifting to healthier snack alternatives. “We have also seen the most growth—and I’m talking high double digit increases—in potato chips and bakery items, such as boxed donuts, and those are about as far from healthy as you can get,” he said.

The most recent recall of pistachios basically stalled growth, but was not devastating to nut and seed sales—and there could have been other contributing factors to this slight decline [5% versus previous week], Sturtevant found. He hasn’t dropped any products from this category during the past year other than those products under government recall.

At Nice N Easy, the best new product has been Beer Nuts Bar Mix in the 26-ounce size, sold in a large plastic jar. “We have them stacked up in cases in most of our stores,” Sturtevant said. “It’s been a great incremental sale.”

Though Nice N Easy doesn’t place promotional retails on single serve nuts or seeds, Sturtevant has experienced great success with off-shelf displays and shippers. “One particularly successful item is Beer Nuts Bar Mix that we retail at $6.99,” he said. “It’s a big package that is also fairly new—you can’t find it in a Wal-Mart or grocery store yet. It is our number two dollar generator for this subcategory in Q1 of 2009.” CSD

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