KANSAS CITY — The $1.3 billion meat snacks category is expected to post continued growth, though at a slower pace than in recent years, said Mikael Olson, associate client director at Nielsen, New York.
“The growth number associated with what we saw in 2014 versus 2013 was astronomical,” Mr. Olson told Food Business News. “This is a billion dollar category we’re talking about, and it experienced 12% growth in 2014, which is really incredible. Overall, the story is still very positive; it’s just not as shocking as it was two years ago.”
Multi-outlet dollar sales of dried meat snacks in the year ended July 10, 2016, grew 4.3%, and unit sales increased 5.6%, according to data from Information Resources, Inc., Chicago.
Meanwhile, prices have flattened, most likely related to lower beef prices, Mr. Olson noted.
“From a flavor standpoint, beef is still king,” he said, adding that beef’s share in the meat snacks category is 10 times larger than turkey and well ahead of other types of meat.
“Pork and chicken are a little smaller than turkey but are still growing,” Mr. Olson said. “The most exciting part of the category is exotic proteins, which are relatively miniscule in volume compared to traditional beef, but the meat types in our data that are kind of fascinating include venison, bison, buffalo, lamb, elk, kangaroo, boar, duck, pheasant and ostrich. I believe they all have positive year-over-year numbers associated with them. So, while relatively small, they are contributing to growth in the category.”
An emerging trend in the category is meat bars, introduced to the market by such brands as Epic, Krave and Tanka.
“When we look at bar as a form, it is up significantly in the past several years, but relatively speaking is a drop in the bucket compared to the overarching category (led by) really strong brands and strong traditional players,” Mr. Olson said, adding the most popular formats for meat snacks remain strips and sticks.
“Forms classified on the packaging as being ‘pieces’ or ‘bits’ are actually down,” he said. “That may have been a flash-in-the-pan element of the category that’s losing favor.”
Research from Packaged Facts, Rockville, Md., indicates not all players are seeing growth in the category. Link Snacks, the largest meat snack producer in the United States with 43% market share and $569 million in sales, saw dollar sales and volumes drop 7% and 15%, respectively, in the past year, according to a recent report from Packaged Facts.
“If any meat snack brand epitomizes the classic style of jerky, it is Jack Link’s, and these sales results show that this is not the kind of jerky people are looking for any more,” Packaged Facts said.
Conversely, Krave Jerky saw dollar sales rise 71% to $38.3 million, with volume sales growth of 84% in the past year behind increased distribution since being acquired by the Hershey Co. in 2015.
Other meat snacks stalwarts are maintaining strong growth. ConAgra Foods’ Slim Jim brand, which holds 19% market share with $243 million in sales, posted 11% growth in dollar sales in the past year, according to Packaged Facts. Oberto Sausage Co. and Bridgford Foods Corp., which markets the Sweet Baby Ray’s brand, posted dollar sales growth of 18% and 30%, respectively.
Brands driving the fastest growth in the category include Chef’s Cut Real Jerky (up 597% with $3.7 million in sales in the past year), Duke’s from Thanasi Foods L.L.C. (up 108% to $8 million), Vermont Smoke and Cure (up 96% to $2.1 million) and Perky Jerky from PEMS L.L.C. (up 37% to $10.8 million).
“As we can see, it is the small meat snack marketers who are providing small batch, uniquely flavored, and artisanal products that are appealing to meat snackers right now,” Packaged Facts said.
Mr. Olson of Nielsen said more gourmet and premium options are entering the marketplace to sate consumer demand for authenticity and higher quality.
“We may be seeing something of a ‘gourmetization’ or ‘premiumization’ under way in jerky,” he said. “I think it’s safe to say if you’re a manufacturer looking at the category, there are some really stalwart, high-equity brands in that space that you have to come in with a new value proposition for consumers. One way to do that is to offer what might be perceived as fancier protein, unconventional forms, lots of packaging language and really visually stimulating (imagery conveying) simplicity and realness.”
Capitalizing on the demand for artisan-style options, Link Snacks in 2013 introduced its premium brand Small Batch Jerky, which saw sales grow 75% in the past year, according to Packaged Facts.
Overall, the meat snacks category has experienced “tremendous tailwinds” in recent years, which are expected to continue, Mr. Olson said.
“There’s a very real shift from processed to real food, transparent products, things that consumers perceive as fresher, and that’s a component of an overarching theme that we have been talking about for a long time… We see a huge shift from dieting to wellness, and that’s where we get the words like ‘real,’ ‘transparent,’ ‘fresh,’ which is very on-trend today across the entire store,” he said.
Another advantage of meat snacks is portion control, which influences the majority of consumers’ purchasing decisions, Mr. Olson said.“Put all of this together: wellness, nice flavors, but also a better-for-you halo with regard to protein and satiety, and built-in portion control,” he said. “Meat snacks are very on-trend for this variety of reasons.”