By Howard Riell, Associate Editor
Twenty-Five years ago, meat snack choices seldom strayed beyond traditional beef jerky. Today, however, spicy and exotic varieties have enlivened the category, even as functional and all-natural items help to draw new consumers. Whether the product spin is cured, smoked, organic or lean, the meat snacks category still produces a lot of bite when it comes to retail sales.
Chicago-based Mintel Group cited the Bureau of Labor Statistics’ Consumer Expenditure Survey in predicting sales of $1.3 billion by 2015. Meat snacks and beef jerky consumption is still dominated by a core of top-selling brands, including Jack Link’s, Slim Jim, Oh Boy! Oberto and Old Wisconsin among others, while private labels continue to make inroads on a regional level.
Of course, there’s still a lot of meat on the bone when it comes to untapped sales.
“This is the one category where I don’t think, for the most part, convenience store guys, especially mom-and-pops, are paying enough attention,” said Tariq Khan, CEO of Sentar Oil Inc., a four-store chain based in Rockville Centre, N.Y. “I think the people who have been paying attention are the chain stores. They get a call from the meat snack buyer and sit down and discuss it.”
Independents, on the other hand, often fail to do that, at times for quite pragmatic reasons, including geography.
“It depends where they are,” Khan said. “If they are in an area where the meat snack business is strong—like the Northwest, where the category is a big part of their sales, versus the Northeast—they pay more attention.”
The strength of the category in any setting, however, shouldn’t be underestimated.
“For years, meat snacks have been growing,” said Khan. “As an overall category snacks continue to make a strong showing in the convenience store channel. As long as you have that business, focus on it.”
During his tenure at 7-Eleven, stores were routinely designed with a prominent, three-foot section carved out for meat snacks.
“That is a lot of presence, and in many of the chain stores you go to you see it. But many of the mom-and-pop type stores just are not done as well.”
Though the old days played a prominent role in the history meat snacks category, the category still is prominent in today’s c-store sales.
“Dollars are up,” said David Crawford, vice president of operations for Las Vegas-based Green Valley Grocery, which operates 52 stores in southern Nevada. At the same time, however, costs have also risen. “The cost has gone up and the serving size has gone down with the price of beef.” Jack Link’s is the beef jerky category leader, he added. “Jerky appeals to a wide range of people: traditional consumers, certain diets, people looking for protein (and) tourists.”
The most effective promotions, Crawford has found, have made use of instant redeemable coupons, two-for offers, more product, seasonal items, reduced retail, branded flavors and LTO packaging. Crawford encourages other retailers to use price, placement and promotions to move product. He also warns against exclusive agreements, maintaining too much or too little inventory, and being slow to market with new items and promotions.
Accounting for Taste
Touting new items that align with consumers’ tastes are vastly important, said Jim Corallo, sales manager of Northland Premier Distributors Inc. in Mesa, Ariz.
“Customers recognize this as a healthy type of snack due to low-carb content, high protein, lower sugar,” Corallo said. “Some jerkys are touting that they are all-natural with no artificial ingredients, minimally processed, 97% fat-free, no added MSG and finally gluten free.”
The major demographic for the category is largely unchanged, though by marketing products that are minimally processed and potentially gluten-free, it is attracting younger and more health-conscious segments of the population.
Jack Link’s remains the leading player in the category. “The 3.25-ounce bags are most prevalent in all stores,” Corallo said. “We in the Southwest do very well with Jack Link’s products, as well as some local-type ‘cowboy’ jerkys. This is a style of jerky that is typically a drier, thinner cut format. The way jerky was first made in the West.”
In that vein, Jack Link’s new flavors include Sriracha and Burrito. Several players are coming out with their versions of bacon jerky.
More Than Meats the Eye
Khan said he has always found meat snacks to be a highly profitable category. He pointed out that, according to his experience, geography should never discourage operators from putting some marketing and merchandising effort behind the category.
“It is not a losing effort,” Khan said. “Instead, I think it’s an opportunity. Those who don’t have them, or who have very little, should consider them. Again, I am in the Northeast and while it may not be as big here as it is in the Northwest, we still do very well with it.”
Having a direct store delivery (DSD) supplier can help smaller retailers get a better handle on managing the category, Khan said. “Take Jack Link’s. We had a DSD supplier, a local distributor who serviced the stores. Because of him, we did exceptionally well. There was a big difference.”
Much of that difference, Khan explained, had to do with product variety and consumer preferences at the time.
“He knew what he was selling,” Khan recalled, “and when he came back next time and saw what hadn’t moved he made a change. Most retailers, independents in particular, fail to see a lot of things. They are looking in large part at the high-velocity items, and meat snacks are not necessarily high-velocity items.”
Variety, in fact, is a driver, Khan said. “The customer who’s looking for Marlboro or Marlboro Lights is going to ask for it,” Khan said. “The one who’s looking for meat snacks won’t, but if you put up four different brands you will draw his attention.”
Demographics and geography notwithstanding, the category is proving well worth operators’ ongoing efforts.
“Most stores will have one of those fresh varieties like in a jar,” Khan said. “A lot of times, I saw that in the Northwest and I brought it into my own store. When we were getting the service it did well. Have two or three brands of meat snacks, minimum, and try to give at least a couple of feet in the section. If you can’t do that, at least make room on an endcap, on the top, so you can see them right above your salty snacks like Wise Chips or Frito Lay chips.”
So whether it plain beef jerky that’s been a staple for 25 years, or an organic bison meat snack treat, the bottom line remains the bottom line.
“This is a wonderful category, with a 50% or more profit margin,” Khan concluded, “so it would be foolish not to focus on it. Pricing is a sensitive matter to everybody; some may work with a 35% or 40% profit margin, and you want to focus on that.”
Spicing It Up
Suppliers have acknowledged consumers’ desire to wander from the beaten track by spicing up their product offerings. Some recent ones include:
Oh Boy! Oberto has reworked some of its recipes to render them all-natural.
Jack Link’s is doing well with its “Lighter Side” 100-calorie packs, turkey strips, bites and jerky.
Denver-based Performance Enhancing Meat Snacks, for instance, is marketing a functional, all-natural item, Perky Jerky, soaked in a marinade infused with guarana, a caffeine-containing tropical berry that’s an ingredient in many energy drinks.
Entrepreneur and marathoner Jon Sebastiani’s Krave Jerky of Sonoma, Calif. markets itself as “jerky elevated.” The product is gluten-free, devoid of nitrites, MSG or corn syrup. Its marketing message: “Out with the tough, chemical-laden, processed meat snacks and in with all-natural, whole-muscle cut, hand-sliced pieces of meat.” Flavors include Basil Citrus Turkey, Garlic Chili Pepper Beef and Black Cherry Barbecue Pork.
Another company, Louisville Vegan Jerky Co., offers jerky with no-gluten ingredients and 12 grams of protein. It comes in three flavors: Bourbon Smoked Black Pepper, Bourbon Smoked Spicy Chipotle and Sriracha Maple.