Courting Candy Customers

Colorful CandiesThe sweet news is that sour sells in the non-chocolate confections category.

By Marilyn Odesser-Torpey, Associate Editor

Overall sales growth for non-chocolate confections topped $10 billion last year, a 3.6% increase over the year before, according to the National Confectioners Association (NCA). Sales per capita grew from the year prior by 1.9% to $32.44 per person. The association predicts that non-chocolate candy sales will grow another $1.8 billion over the next five years.

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“Non-chocolate has been on fire through all of 2013 and now in 2014 both in seasonal and everyday sales,” said Jenn Ellek, NCA’s director of trade and marketing communications.

Chewy candy has been the most active sub-category, making a 5.6% gain in 2013, Ellek said.

“The normal range is somewhere between 3-4%, so there’s definitely something going on here,” she said. “Fun and fruity flavors are up $83 million in retail sales.”
Ellek noted that gummies are “really hot” sellers, up $76 million. Assorted peg bagged candies are also doing very well, up $30 million.

“Consumers see the peg bagged candies as a good value,” Ellek said.

Sours have been and continue to be the big rage, according to Ellek, and manufacturers are coming through with more sour products. She mentioned the Sour Watermelon Peeps Minis just introduced by Just Born Inc. and Toxic Waste Goop Gum that’s filled with a sour liquid.

Non-chocolate sales rose by double digits at Lubbock, Texas-based United Express convenience stores, said the company’s Convenience Business Manager Tandy Arrant. He agreed with Ellek that gummies and sour items are fast movers and show no signs of slowing down.

Although the products are basically the same, Arrant attributes their consistent popularity to the new flavors the manufacturers are constantly introducing. Large-scale manufacturer advertising campaigns also help to move non-chocolate products. Arrant cited Haribo, makers of gummy Gold-Bears, as having one of the strongest marketing campaigns.

“I can’t go a day without seeing one of their commercials,” Arrant said. “That certainly supports our ability to sell a lot of the product.”
One non-chocolate candy bar, Payday, a caramel and peanut confection, is one of the best sellers in United Express stores. It’s so popular that it is the number three candy bar overall—including chocolate—in sales.

Then again, the No. 1 non-chocolate item across all of the United Express stores is the caramel Tootsie Pop, a product that Arrant has never seen promoted by the manufacturer.
“Word must spread around the schoolyard,” Arrant said. “That’s why it’s so important to keep close track of what’s selling well; you never know what product will take off, whether it is promoted by the manufacturer or not.”

To promote the products at the stores, Arrant will run two-for offers for a month at a time. Others he will mark down by 10 or 15 cents for a promotional period.
While the majority of the non-chocolate products are displayed in line, Arrant also chooses one item per month to showcase at the front counter cash register to increase impulse purchases. Many times, this will be a new item that the store is introducing.

United Express stores allot as much as six feet of shelf space to non-chocolate confections. They usually carry about 75 SKUs. Arrant does a full refresh of the category annually, usually to coincide with the National Association of Convenience Stores (NACS) show where manufacturers exhibit their latest items.

Research firm Euromonitor named the new bite-sized Jolly Rancher chews as “the most important innovation.” Ellek chose Hillside Candy’s Go Organic Fruit Chews as an up-and-comer because they appeal to the growing number of consumers who are concerned about cleaner ingredients and the sourcing of those ingredients.
“We think the audience for this kind of product is growing,” Ellek said.

Tim Cote, vice president of marketing at Beaverton, Ore.-based Plaid Pantry c-stores, laughed when he reported the rumor that sales of sour candies were supposed to decline this year. “I see sales of these items constantly improving,” Cote said.

Cote noted gummies and sour candies are leading the pack. He said that constant innovation in gummy shapes helps keep kids’ interest in purchasing the candy.
“Gummies can be shaped into anything and kids are always looking for the latest and greatest animal shape,” Cote said. “When someone comes out with a new shape, we can get a couple of years run out of that.”

Most popular are the gummies offered in sour flavors.

“It used to be that sour flavors were just preferred by kids, but now more adults are showing a preference for them,” Cote said.

Euromonitor research confirmed the fact that candy is more than kid’s stuff. The firm reported that a growing number of older consumers from the baby boomer generation are starting to have an effect on sales.

These older consumers are buying products, such as licorice, toffees and caramels, partly because of their typically lower sugar content (many also have sugar-free varieties) and partly due to nostalgia for the candies they ate as they were growing up, the research company said.

While sours and gummies are the category stars in his stores, Cote has seen “a slight decrease” in overall sales of non-chocolate candies.

“The products that are out there are great, but there has been a lack of any real innovation,” Cote said. “I’m looking for anything new and different to add life to the category.”
Cote wished that manufacturers would come up with something beyond another flavor of Starburst, Jolly Rancher, or Lifesavers gummy. “Kids are getting burned out on just new flavors,” Cote said. “Manufacturers have to bring new branding to the category.”

It isn’t that new flavors are not helpful, but they have a relatively short life where consumer excitement is concerned.

“A new fruit combination will come on the market and it will have a 3-6 month run before it goes away,” Cote said. “It’s not deliberate, but by necessity, most of them become in-and-out items.

Plaid Pantry carries 150-200 SKUs of non-chocolate candies, which make up 20-25% of the stores’ candy set. Cote does major category refreshes two and sometimes three times per year. Peg bag candies are popular at Plaid Pantry and Cote believes that consumers perceive them to provide the best value.

At Plaid Pantry, candies are displayed throughout the stores at multiple points of interruption, so consumers cannot miss them.

“They’re in line, at the checkout stand, in the planogram wings and on top of our portable coolers,” Cote said. “The candy is in front of the customers wherever they are.”
Plaid Pantry also buys a lot of shippers and price promotes, as Cote described it, “aggressively.” He said the category might do a lot better if manufacturers put as much marketing muscle behind their non-chocolate items as they do their chocolate ones.

“There has always been the thought that non-chocolate doesn’t respond to price promotions and shippers the way chocolate does, but, for us, that’s just not true,” Cote said. “Give us a nice shipper with a couple of hundred pieces in it and give us a good discounted price that we can pass along to the consumer and they will sell.”

4 Tips for Driving Candy Sales
· Showcase new items at the front counter around the cash register.
· Be aware of products that are generating schoolyard buzz.
· Display candy at multiple points of interruption throughout the store.
· Use shippers and price promotions to drive excitement in confections.