NCA Sweet Insights 2016
Natural-positioned snacks driving growth in specialty channel, says Spins
Value sales of snacks through speciality gourmet supermarkets – defined by Spins as high-end, experiential stores that have more than $2m sales and feature full-service and fresh departments such as prepared foods, butchers, and on-site bakeries – rose 6.1% versus a 2.4% rise in the conventional channel.
Leading retailers in the specialty channel – which sells around $1bn of snacks a year versus the $70bn sold through conventional stores - include The Fresh Market, King’s, Gourmet Garage and Fairway Market.
Natural-positioned snacks drove the growth in the speciality channel, Spins strategic alliance manager Kora Lazarski said during a recent webinar hosted by the National Confectioners Association.
Spins sub-divides natural-positioned snacks into four smaller segments (see box-out), with so-called Natural Standards snacks holding the largest sales value in specialty channel at $182m, and growing 7.8% in the past year. The Conventional Natural segment, which is worth $5.1m in the specialty channel, had the highest growth rate (16%).
Natural snacks: Spins definitions
Natural snacks are categorized by Spins into four smaller segments: Natural Standards, Specialty Natural, Naturally Perceived and Conventional Natural.
- Natural Standards snacks are marketed and sold in natural retailers. They meet the strictest quality standards demanded by core natural consumers. Examples: Terra exotic vegetable chips; Justin's peanut butter cups
- Specialty Natural snacks are marketed as artisan, premium quality, imported/regional or ethnic/cultural. Their quality standards are similar to a natural standard brand. Examples: Skinny Pop popcorn; barkTHINS; OMG's Clusters
- Naturally Perceived snacks target shoppers looking for an 'entry point' to make better purchasing decisions. Broader distribution across various retail channels. Examples: Garden veggie straws; Project 7 gourmet gums
- Conventional Natural snacks are developed by traditional CPG brands but has added value, such as organic content, fair trade ingredients, or allergy free claims. Examples: Simply Tostitos; Florida'a natural organic fruit snacks
Jerky and other meat snacks is the fastest-growing of ten speciality retail snacks categories highlighted by Spins, with sales up 26.4% year on year compared to 13% growth in energy bars and gels, and a 9.5% increase in refrigerated salsas and dips (see table below).
Many businesses are looking to tap the growth in meat snacks, with Hershey last year acquiring the Krave jerky brand and General Mills this year buying Epic Provisions.
Chips and pretzels is the largest snacks category in speciality retail, and is worth $270m, followed by candy and individual snacks at $199m and cookies and snack bars at $136m.
Lazarski highlighted that within the candy and individual snacks category, chocolate bark and organic gummies “take the wheel”.
“Though chocolate bars dominate the category, chocolate bark is driving absolute and percent sales growth,” she said.
Speciality gourmet retail channel:
Snack Category | Sum of Dollars | Abs. $ Change | % $ Growth |
Chips pretzels and snacks | $269,836,403 | $10,972,435 | 4.2% |
Candy and individual snacks | $198,556,495 | $6,067,688 | 3.2% |
Cookies and snack bars | $135,669,332 | $9,523,305 | 7.6% |
Crackers and crispbreads | $121,534,941 | $6,799,175 | 5.9% |
Nuts seeds dried fruits and vegetables | $95,240,153 | $7,278,455 | 8.3% |
Refrigerated salsas and dips | $70,744,330 | $6,123,822 | 9.5% |
Energy bars and gels | $61,027,187 | $7,144,311 | 13% |
Shelf stable salsas and dips | $26,229,193 | $970,250 | 3.8% |
Jerky and other meat snacks | $9,075,549 | $1,894,763 | 26.4% |
Rice cakes | $5,550,037 | $469,954 | 9.3% |
(Source: Spins)
