Market Trends Category Analysis: Something to Savor
Meat snacks as a category are segmented into three types—jerky, meat sticks and “others,” a grouping that includes kippered, pickled and meat and cheese varieties. Mintel attributes increased popularity of meat snacks to several factors. Leading the way is an improved image. Once widely perceived as “truck stop and cowboy” fare, the meat snack now attracts more diverse consumers. A relative lack of fat propelled the snacks during the low-fat/fat-free craze of the late 1990s, and the recent popularity of low-carb diets further promoted meat snacks as a healthful alternative. The low-carb factor also widened the consumer base to include females. Finally, time-pressed consumers view meat snacks as a convenient on-the-go snack food.
Considering the relatively low market penetration of meat snacks, the market has a fairly unlimited potential, especially as these types of snacks broaden their consumer base with varied flavors, expanded distribution and healthful messages.
Teen SupremeMintel's exclusive consumer research found 43% of teens surveyed were twice as likely as adults to say that they had purchased meat snacks in the month prior to the survey. Of these teens, one third reported purchasing beef jerky.
Mintel found that incidence of purchase rose dramatically with weekly disposable income. However, likely due to the lower average price of these items, teens “were equally as likely to have bought beef sticks, regardless of disposable income.” Compared with their adult counterparts who purchase meat snacks, teens were less likely to regard the items as a healthful snack.
Teens have long been a strong consumer base for meat snacks, but considering the flat number of 10- to 14-year-olds through 2010, manufacturers may have to look elsewhere for growth. Since moms are usually the ones making purchase decisions for this segment, targeting adult females could prove lucrative in penetrating two markets: adults and kids. Nonetheless, preteens have a degree of influence in purchase decisions; therefore, Mintel suggests exotic flavorings and “cool” packaging could prove key to reaching this group.
The number of 15- to 19-year-olds will rise sharply through 2010, a 9% jump over the 2000 total. Male teens traditionally have proven to be strong consumers of meat snacks, and females also enjoy the products. So the rise in population bodes well for sales. Information Resources Inc. (Chicago) found that households with teenagers are buying a greater volume of meat snacks than in previous years. Growth in the number of teens and young adults will result in a 52% market growth through 2007, predicts Mintel.
Meat snacks also have made their way into the mealtime options of younger children. Parents view the products as a more healthful protein snack and as mess-free and portable. As such, parents themselves are enjoying meat snacks more.
A Healthful AlternativeImpacting this innovation have been diet trends among young Americans. Concerns about increasing obesity levels in children have affected the sales of many snack foods, but for those consumers seeking to lower their fat consumption, nearly fat-free meat snacks have proven a viable option. The current popularity of protein-rich diets has been a boon to meat snacks, which also serve as a snack solution for those seeking “all-natural” or “organic” labels.
Mintel notes that many meat snacks are inherently “all-natural,” and their labels are beginning to boast those modifiers. Future sales success could center on organic items, as more Americans seek that feature in their snacks.
One in five U.S. adults surveyed by Mintel reported having purchased meat snacks in the month prior to the survey. Beef jerky was the type most commonly enjoyed. Purchases among adults were quite regionally distinct. Mintel found respondents from the North Central and Western regions to be “significantly more likely” to have purchased any meat snacks. This was attributed to the Midwest's strong meat-producing tradition and the West's “cowboy history.”
However, among adult purchasers, presence of children under 18 in the household played a major role in purchasing meat snacks. Some 28% of respondents with children had purchased meat snacks in the previous month, significantly more than the 16% of those without children. Nearly a third of purchasers said they purchased the snacks for their children, not for themselves.
For those who bought them for themselves, the convenience of the meat snack proved a key benefit. In snack foods overall, those that are in portable containers, need no refrigeration, are bite-sized and leave little or no mess have gained tremendous popularity among consumers. The meat-snack industry has taken some advantage of these concepts, putting the products in resealable tubes and introducing bite-sized or mini versions of traditional favorites.
The last decade has seen jerky assume the mantle of market leader in the category, boasting an estimated 44% of sales in 2002, versus 33.5% for meat sticks and a combined 22.5% for all other. The boost in jerky's fortunes has been tied to diet trends promoting protein snacking.
Regular-flavored meat snacks garnered more than 40% of the market, a jump of 30% from 2000 to 2002. Registering the largest gain during that period were hot- and spicy-flavored products, gaining 39% and mirroring trends seen in the salty snack market. Other flavors making headway in the meat snack category included smoked, teriyaki, peppered and brown sugar/honey.
Flavor preferences appear to be region-specific. Midwesterners opt for regular and smoked varieties, but peppered and hot and spicy varieties appeal to meat snack consumers in the South and Southwest.
Mintel further segments the meat snack market by the source of meat. With sales totaling nearly $1.8 billion, beef holds more than 80% of the market. The first meat snacks were beef products, so beef is the source with the longest and largest consumer following, says Mintel. Nonetheless, other sources are making their presence known. Turkey, for instance, had a 22.5% growth from 2000 to 2002. Because of turkey's milder taste, women and children are the target market for these products.
Leaders in the meat snack market are a diverse lot. ConAgra's (Omaha, Neb.) Goodmark holds the market lead, possessing a 27% market share in 2002. Its Slim Jim and Pemmican brands have boosted sales of late, growing 15% and 30%, respectively, from 2000 to 2002. A fairly close second, Oberto Sausage Co. (Kent, Wash.) has more than a 21% market share. The 15% share held by Link Industries (Minong, Wis.) puts that company in a solid third spot.
Many of the most popular brands are regional, and Mintel has found that, while one brand may lead in most areas, the number-two brand is highly dependent upon region. Furthermore, many independent suppliers hold significant shares of regional markets.
Perhaps the only concern for the future of meat snacks growth rests in the presence of private-label options. Private-label meat snacks hold only 2% of the food store, drugstore and mass merchandiser market sales and are poised to grow as producers concentrate their efforts on this market. As Mintel notes, potential sales growth among the big names may be tempered by increased competition from the private-label arena. However, according to Mintel, “as more retailers begin to capitalize on the popularity of meat snacks, the average price of goods sold should drop.”
Website Resourceswww.sfa.org — Snack Foods Association
www.mintel.com — Mintel International Group
www.PreparedFoods.com/archives/1999/ 9907/9907meats.htm — A look at the challenges present in formulating meat snacks