Keeping up with customers’ candy demands remains a never-ending saga.
By Jeffrey Steele, Contributing Editor
When responding to a sudden desire for a chocolate bar, pucker-worthy mint or lip-smacking gum, customers tend to beat a path to convenience stores. There, they are likely to find what all folks with a sweet tooth seek: broad selection, competitive prices and an in-and-out experience that lets them counter cravings quickly.
According to Nielsen, in the 52 weeks ending July 30, 2016, sales of all candy at convenience stores grew 1.3%, to $5.867 billion. Seasonal novelties led the way with a sales increase of 9.4%, while bagged or repacked candy surged by 5.7%.
Comparably, candy rolls and mint drops gained 1% over the past year.
Consumers’ top need when it comes to snacking is that it be “quick and easy,” and the convenience channel is particularly well suited to deliver that experience to on-the-go consumers, said Jordan Rost, vice president of consumer insights at Nielsen.
“Great taste is the second biggest need, and so it’s important for retailers like c-stores and manufacturers to remember that snacks can still be a bit of an indulgence for consumers,” Rost said. “Although consumers are increasingly demanding healthier snacks, that can’t come at the cost of convenience or taste.”
For its part, Euromonitor International trumpeted c-stores as a natural place for candy, gum and mint purchasing.
“Convenience stores and forecourt retailers once again grew their channel shares in sugar confectionery in 2016, reaching a combined value share of 22%,” a recent Euromonitor International report noted.
“These channels are a perfect fit for the impulse nature of sugar confectionery and growing consumer demand for convenience. At the same time, lower U.S. petrol prices have left consumers with more disposable income at the pump, leading to more in-store spending on sugar confectionery,” the report continued.
Though consumers continue to indulge, they are increasingly seeking to eat more healthfully, said Jared Koerten, senior analyst at Euromonitor.
“The demand for ‘healthy indulgence’ has limited volume sales of chocolate confectionery,” Koerten said. “Health-focused shoppers have increasingly turned to snack bars over candy bars, as brands like KIND have innovated with sweet and salty flavors that satisfy sugar cravings and even use chocolate, but enjoy a healthier positioning.”
Simultaneously, manufacturers have innovated with products that incorporate dark chocolate, fruit, nuts and other ingredients providing a more nutritious or lower-calorie indulgence. A good example is the debut of Mars’ Snickers Crisper, featuring lower-calorie puffed rice, in January 2016.
Another trend is a move to less processed foods, which in turn has spurred chocolate makers to pursue “cleaner” labels in 2016. Following similar pledges in 2015 by Nestlé and Hershey, Mars this past February committed to eliminating artificial colors over the next five years, Koerten said.
PRIMED FOR PROMOTION
At Zarco USA stores in Lawrence, Kan., CEO Scott Zaremba agrees that c-stores are an ideal place for candy-craving customers.
“It’s a simple, quick purchase, so when the craving hits, you can get in and out of a store,” Zaremba said.
As for customer preferences at his stores, Zaremba reported the top 50 candy, gum and mint items nationally are favored by his patrons.
“Snickers is still No. 1, and I don’t even know what No. 2 is,” Zaremba said. “The biggest thing here is that there are so many new candies from national vendors coming down the pike. How well they do is dependent on how well they’re advertised in our region.”
Unlike the old days, new products aren’t just another take on candy bars, he noted. Today, new products often usher in additional innovation that goes beyond me-too items. They may have a different texture, size, shape or feel.
“And flavorings are huge now,” Zaremba added. “What used to be a standard bar is now offered in a lot of flavors. It could be cookies and cream, strawberry or other flavorings.”
Increasingly popular are new SKUs that offer customers bite-sized counterparts to the crowd-pleasing full-sized bars. This profusion of smaller-run items can create problems for space-starved c-stores, Zaremba said.
“Snickers can be in bars, king-size, multi-pack regular size and multi-pack bite-size,” he reported, adding with a chuckle, “and that’s just one product. So wading through these new products and trying to decide what will be on our shelves is a matter of learning how well they’ll be backed by the candy makers.”
QUESTION OF TASTE
According to Eric Huppert, partner at Team Oil Travel Center in Spring Valley, Wis., Reese’s King Size Peanut Butter Cups is among the biggest candy sellers, trailed by products like Snickers, Almond Joy, Dove Milk Chocolate and 3 Musketeers.
“One thing I find interesting is that Hershey’s Milk Chocolate Bar is a big seller,” Huppert said. “I think a lot of people just continue to like a plain chocolate bar.”
After tracking store traffic, Team Oil recently moved candy from an interior aisle to a more prominent aisle greeting customers entering the store, Huppert said. Sales of candy grew 10%.
GUM AND MINTS
Gum packaging has undergone tremendous innovation in recent years.
For instance, traditional small packs of individually-wrapped sugar and sugar-free gums have been joined by larger plastic dispensers of unwrapped sticks. At Zarco USA stores, however, gum lovers still want the 16-piece packaging.
“The bulk packaging, with say 50 pieces in a tube, is not a high-volume item for us,” Zaremba said, noting the target Zarco customer wants the same thing in both gum and mints: To get in and out quickly, having purchased a traditional-sized package.
At Team Oil, meanwhile, big sellers in gum include original Trident, Wrigley’s 5 Spearmint and Wrigley’s Extra Spearmint and Extra Polar Ice, Huppert said.
Mints are a product bought because customers “don’t want to offend anyone,” Zaremba said. Customers don’t have any desire for enormous economy sizes.
“Package size is important there because they want it small and concealable in their pockets,” Zaremba said.
The keys to success in candy, gum and mints are two in number, Zaremba said. First, be consistent by always offering the top 50 in every category.
Second, always have the latest and greatest in every category, so that when the product is advertised, consumers know your c-store will have it in stock. “That’s the hardest thing to do, because of shelf space and control of inventory,” he said. You have to “make sure you’re getting the turns and having the selection for the customer.”
Team Oil places baskets next to each register.
“When a box of candy in the aisles gets down to one or two bars, we take out the boxes and put the remaining one or two in the basket,” Huppert said. “The baskets are full all the time and they always sell. It’s the impulse thing; it’s what’s next to you when you’re standing at the counter. Let’s say you have a candy bar that’s a slow mover and you’re getting rid of it. Put those in the basket, and they still move.”