Snack sales pop on seasonal, gift sets - snack sets are popular gifts during the holidays

Discount Store News, May 1, 1995

Last Christmas, aisles at Caldor and Shopko were decked with tins of popcorn and cheese from Houston Foods. Target featured gourmet popcorn from Vick's based in Omaha, Neb.

Michael's, a crafts chain, sells gift tins of popcorn and snacks all year long.

And drug chains such as Revco also bring in decorative assortments of popcorn and other snacks for the Christmas holiday. Based on high 95% sell-throughs of holiday popcorn, pretzels and nut gift assortments, retailers are expanding their programs into other seasonal events. Currently, as much as 35% of all gift snack items are moved during the fourth quarter.

By doing so, buyers said they believe they are seizing more gift sales that would perhaps go to other outlets.

"We think we are getting a customer who needs a last minute gift item," said a source at Revco in Twinsburg, Ohio. Others said that candy sales have been soaring during seasonal events and they expect the sales of snacks to follow.

"It's a very good business for us," said the buyer for Shopko, the multi-regional discounter based in Green Bay, Wis. "These are items customers don't shop around and compare. They are also perfect for last minute gifts."

A leader in the seasonal snack category is Houston Foods. Houston is a vertically integrated company that allows itself to factor in a greater margin to its products, retailers said.

"Houston has it down to such a science," explained a buyer for a large discount chain, "that they can offer us prices that allow us to make a healthy margin."

Retailers said they are looking for suppliers that are flexible and can tailor their product mix to their type of account, a key factor in today's competitive retail arena.

"What's right for our stores isn't right for a discount store, so we know we can have something for impulse customers. Unlike most retailers, our business falls off in the last two weeks before Christmas," said an executive for Michaels, the nation's largest crafts retailer. "We look for a point of differentiation."

A buyer for a major discount department store agreed that one size fits all doesn't work in the snack food gift category. "For us, we want sets we can put on pallets and move huge quantities," he said.

Gary Musick, executive vice president for sales and marketing, at Houston, added, "We really service our accounts and we can customize programs for each one."

Houston is helping retailers duplicate their fourth quarter success with product aimed at other key seasons such as Valentine's Day, Easter and Halloween. "We think we can do the same for these holidays as we have for Christmas," Musick said.

Another company trying to help non-foods retailers build snack sales is Gardetto's. The firm has created an endcap program for retailers such as CVS that mixes its selections such as honey mustard pretzels and Snak-ens.

Also joining the pretzel fray is the popular Snackwell's logo. "Fat-Free pretzels were a logical extension of our successful Snackwell product line," said Rich Felber of Nabisco. He said the packaging, which imitates the well-known green of the cookies, will lend instant credibility on the shelf. The Snackwell line consists of thin pretzels, pretzel chips, mini twists and thin pretzels.

Frito-Lay, meanwhile, is investing $225 million in building up its cadre of low-fat products. The new entries include Baked Lay's Potato Crisps, reduced fat salsa and reduced fat Tortilla Chips. The company is making it easier for nonfood accounts to get into the business with a "Taste the Fun Not the Fat" aisle display that brings together Rold Gold Fat-Free Pretzels, Baked Tostitos Tortilla Chips and Reduced Fat Ruffles Potato Chips.

Lincoln Snacks, makers of Poppycock and Fiddle Faddle, have introduced a new non-fat line of caramel coated popcorn that is selling very well as Walgreens.

Low-fat snacks represent less than 5% of snack food category sales. However, low-fat snacks in general are outpacing overall snack growth.