South 40 Snacks' produce position shakes up sunflower seed category
Looking to revolutionize the stagnant in-shell sunflower seed category, South 40 Snacks is partnering with retailers to uniquely position its giant-sized, premium seeds in the produce aisle. The company seeks to emulate the success of pistachio category, driven in large part by innovation on the part of The Wonderful Co. In the not too distant past, the vast majority of in-shell pistachios were dyed red, often purchased in gas stations, and a mere semblance of today’s massive pistachio market.
“Our seeds are a game-changer,” said Josh Schroeter, company founder. “We’re excited to introduce consumers to our bigger, tastier, and easier-to-crack seeds next to produce items. They see our product as a healthy food and that all sunflower seeds aren’t the same as compared to those typically found in the salty snack aisle.”
Schroeter’s predictions are not unfounded, given the company’s rapid growth. Having launched late in 2018 with its unique sunflower seed varietal grown in Israel, South 40 Snacks is already available in the produce departments of multiple Albertson-Safeway divisions, as well as key retailers like QFC (Kroger Seattle division) HEB, and Giant Eagle.
South 40 Snacks currently has only one offering with two ingredients — roasted seeds and salt. Its competitors, Conagra (the David’s and BIGS brands) and Frito (SPITZ) typically have a "traditional" roasted and salted seed along with many flavors like dill, ranch and BBQ.
“We’re keeping it simple and clean,” said Schroeter. “Our seeds have a robust nutty flavor that people love, and we believe once they discover what a great seed by itself tastes like, there’s no turning back from quality.” This strategy is allowing South 40 Snacks to find success in natural and upscale stores like Whole Foods, New Seasons, and Erewhon, retailers that carry no other in-shell sunflower seeds.
Schroeter previously founded Sahale Snacks, a high-end nut company known for reinventing the packaged nut category with its unique combination of flavors and did concede that additional flavors are in the works for South 40 Snacks, but isn’t sharing specifics yet.
Taking a play from the pistachio play book, the company uses eye-popping dumpbin displays as a means to attract consumer attention in produce and gain velocity. Their bright colors and large clear bags showcase the company’s unique branding and large seeds.
“We don’t have much of a budget to promote,” said Schroeter, “but we like to find creative ways to partner with retailers who are excited about innovation.” Last year for the NFC Championship, South 40 Snacks and QFC teamed up to award Seattle Seahawks and San Francisco 49ers tickets to the manager of the produce department with the highest ratio of South 40 Snacks seed sales to total department sales.
There’s not a lot of sales data on South 40 Snacks, but the company supplied some recent IRI/Nielsen data showing it is driving extra sales, outperforming the leading national brands of sunflower seeds in the snack aisle by a large margin, and outperforming many nut and seed items in produce.
“Honestly, in-shell sunflower seeds were never previously even on our radar,” conceded Mark Nelson, produce sales manager at Safeway’s Seattle division. “South 40 Snacks are a premium seed, and their eye-catching bags and displays are driving incremental produce dollars in our healthy snack mix, not just for sporting events but every day.”
South 40 Snacks may also be getting a boost as its competitors are facing supply challenges and forced to raise prices. Harsh weather, extreme flooding, and early frosts have led to poor yields in the 2019 domestic crop, with an estimated production loss of 40-60 percent. Seventy-five percent of domestic sunflower seeds are grown in North and South Dakota where elevated water levels are preventing acreage from being planted, an issue that is expected to continue in the coming years.
Schroeter, who discovered Israeli sunflower seeds as a kid living in Israel, became hopelessly addicted. After decades of living back in the U.S., however, he still couldn’t find another sunflower seed that compared. So before launching, he travelled back to Israel, partnered with a farmer/processor, and began importing the seeds. South 40 Snacks roasts and packages the seeds in the US. “It’s an amazing journey that’s just beginning, and I’m thrilled so many people are now becoming obsessed with the world’s best sunflower seeds.”