The Facts on Meat Snacks

The meat snack industry has seen unprecedented growth over the past decade. With beef jerky leading the way, the industry has seen double-digit growth in eight of the last 10 years.

By Howard Riell, Associate Editor.

Meat snacks like beef jerky, meat sticks, nuggets, pork rinds and more have long been convenience store mainstays, but that doesn’t mean manufacturers and retailers shouldn’t continue searching for new ways to build sales.

New flavors, exciting promotions and marketing to an array of demographic groups can help build sales, even in the face of greater competition from other retail channels. Retailers shouldn’t be afraid to test new items.

“Bacon Jerky is selling well for us right now,” said Tim Cote, vice president of marketing for Plaid Pantries Inc. in Beaverton, Ore., which operates 103 stores. “More manufacturers are getting into this for next year. Really, all segments are trending pretty well as the consumer moves from sweet toward salty in our stores overall.”

According to SymphonyIRI Group, a Chicago-based market research firm, for the convenience store channel for the 52-weeks ended Sept. 9, 2012, the dried meat snacks category notched dollar sales of $1.19 billion, a strong 12.44% jump over the previous year’s period. Top players in the segment include category leader Jack Link’s plus Slim Jim, Old Wisconsin, Penrose and Tillamook Country.

Industry executives are taking notice. In the week following its independence from Sara Lee Corp., on June 28, Hillshire Brands new CEO, Sean Connolly, said he is taking a hard look at flavored sausages and snacks made with meat as he considers adding “provocative” new items to his company’s product line. He also noted that new meat products could fuel sales as his company expands into more retail channels and specifically cited meat snacks as an emerging market.

“There is a compelling consumer need around getting protein into the snacking occasion, as opposed to some of the hollow calories that they rely on today,” Connolly said.

Analyzing the Market
As popular as meat snacks are, Cote has some trepidation when it comes to pricing, especially in the long term. “It will be interesting how the customer responds to price increases,” he said. “This category has a tendency to start performing well and then crash as retailers and suppliers start trying to boost category margins. Hopefully, price increases stay in line with general inflation.”

If the impending price increases are reasonable, Cote added, the category should continue to perform well. “The customer sees an increasing value in the lean protein found in bagged jerky,” he said. “As a snack, jerky also has more perceived healthy benefits versus sugar-based snacks.”

Chris Clark, vice president of the Snack Food Association in Arlington, Va., said the group’s research shows that meat snack dollar sales, unit sales and volume all increased in some retail channels as of its latest tally.

“It looks like there is a lot more variety of flavors than existed not too long ago, especially for jerky,” Clark reported. The product category is also continuing to become more mainstream. “I think the market has expanded pretty significantly in other channels like grocery, where you didn’t see meat snacks so much before. You saw it in convenience stores, but I think even the traditional grocery has grown a lot. Even some of these alternative channels, whether it’s Home Depot or craft stores like Michael’s.”

As with so many other things, this alternative channel growth could end up being a mixed blessing. Americans are growing more desirous of meat snacks overall. “As far as consumers are concerned, it seems to be becoming more of a mainstream product, not just something you see in Colorado or Utah or the West,” he said.

Gender is another area of expansion for the category. “All research indicates that the core demographic is still primarily men in the 18-30 range, but it’s growing fast in other areas, especially with women,” Clark said. “I would think it’s worthwhile for c-store retailers to start targeting these other demographics because the demand seems to be there.”

Sales Surging
Estimates from Chicago-based Mintel Group, based on the Bureau of Labor Statistics’ Consumer Expenditure Survey and other data, project solid growth for meaty snacks all the way through at least 2015, when they should top $1.3 billion.

The research firm reported last year that meat snacks and beef jerky consumption is concentrated among the core top-selling brands. Private label, their report said, does not have a strong presence in this segment. While regular-flavored meat and beef jerky products are the most popular based on usage, the research showed, teriyaki beats out more traditional flavors including smoked, peppered and hickory—an indication, perhaps, that consumers would be receptive to more adventurous flavors.
The Mintel survey also found that the meat snacks and beef jerky market skews toward a younger audience, based on usage of the more popular brands.

There are, Clark added, important distinctions to be made between some meat snack products and others. “Pork rinds and beef jerky are very different products, have some different demographics and sometimes trend differently,” he warned retailers looking to grow the category. “Pork rinds have done very well, too. I think you see a lot of new products and flavors in pork rinds, particularly some hotter flavors, which I think may be more popular. Years ago, you may not have had a very spicy pork rind, but there now seems to be some innovations in terms of flavors.”

Promotions are another key component needed to effectively expand this category, but as Cote pointed out, promotions have not changed dramatically over the years. In his own stores, meat snacks are featured on an endcap, a checkstand rack, a cooler-topper rack for 10-ounce bags and a few permanent mini wings. “The bottom line,” he said, “is multiple points of interruption for the category instead of only one dedicated location.”

That customer, Cote was quick to add, can be male or female, and varies in age. “There are products for everyone in the category, however not all products in the category are designed for all users.”

Know What Sells
Huck’s Food and Fuel has been experiencing double-digit growth in this core snacking segment. Randy Adams, category buyer for 109 Huck’s Food and Fuel in Carmi, Ill., said Huck’s is experiencing incredible growth in the meat snacks category overall as it has been focusing heavily on the snacking segment. The company, earlier this year, rolled out a four-sided walk-around snack display that it developed in house to market top-selling snack brands. Jack Link’s serves as the chain’s category captain, providing Adams with the marketing data and merchandising expertise he needs to continue growing sales.

“We have continued to see double-digit volume growth for three consecutive years, and Jack Link’s has been an invaluable partner in getting us to where we want to be,” Adams said. “Our new display has enabled us to not only increase product visibility, but allows us to offer a wide variety of packaging that ranges from as little as 99 cents to as much as $6.29 for the bigger bags, and everything in between.”

As a result, Huck’s has a solution of nuggets, sticks and steaks in all sizes and price points to cater to the core 18-34-year-old demographic, but still offers a wide variety to attract new customers, such as women and even seniors. Also boosting Huck’s sales is where it is positioning the categ
ory. The new meat snacks displays are located just in front of the soda fountain at each of its stores. This helps drive business with customers of all ages.

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