Sweetening Your Candy Sales

Despite consumer concern about eating more healthily, steadily growing candy sales show that they are still treating themselves to chocolate and non-chocolate confections on a regular basis. It makes sense, then, that strategic marketing ideas can help capture more impulse sales.

By Marilyn Odesser-Torpey, Associate Editor

More than nine out of 10 adults report having purchased chocolate in one form or another over the past three months, according to an April Chocolate Confectionery report from the Mintel Group, a retail research company. In an April Non-chocolate Confectionery report, the firm found that 60% of candy consumers said they eat it as a snack, 42% as a personal reward.

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The National Confectioners Association (NCA) indicates that convenience store dollar sales in the overall confectionery category grew 2% between June 2017 and 2018, said Christopher Gindlesperger, vice president of public affairs and communications. Non-chocolate candy sales increased 2.7% and chocolate 2.4%. Mintel forecasts another 14% increase in chocolate sales between 2017 and 2022.

In Mintel’s non-chocolate report, 63% of consumers who said they have increased their consumption of these confections credited a better selection of flavors. The firm’s Global New Product Database (GNDP) report showed that sour and tropical flavors are on the rise and innovative textures such as mixed media and filled products also helped to maintain consumer interest.

While chocolate confectionery consumers overall are twice as likely to purchase the same type of candy as they are to look for new types, younger (18-34) consumers say they look for new items and buy on impulse. To encourage those impulse purchases, VERC Enterprises, which has 26 stores in Massachusetts and New Hampshire, displays chocolate and non-chocolate confections in several visible places in the store.

“We put them underneath the front counter, with the popular king-size varieties on the top row; in the closest gondola to the register and peg bags on an end cap,” said Meghann Eaton, VERC’s category specialist. “We also use manufacturers’ shippers to promote existing items and introduce new ones.”

Eaton noted that manufacturers like Hershey come in with a lot of helpful research and merchandising analysis on how to lay out the candy offerings. They also assist in determining what the in-store traffic flow should look like to capture the customers who may not have candy on their minds when they come in.

Overall, candy sales are up 2.5% at VERC stores. Eaton explained that most of that can be attributed to chocolate.

Nearly half the chocolate-eating consumers polled for Mintel’s chocolate report said they would like to see more mini bars or bites.

The researchers found that 68% of consumers surveyed purchased individual candy bars, 66% individually-wrapped chocolate pieces in a bag or box (e.g. Hershey’s Kisses, Snickers Minis) and 54% non-individually-wrapped chocolate pieces in a bag or box (M&Ms, Junior Mints).

“Over the next few years, consumers will see more options in smaller packages with clear calorie labels right on the front of the pack,” Gindlesperger said.

For now, king-size packaging is the highest growth area in the VERC stores, Eaton noted.

“But don’t forget to promote the standard sizes as well because there are good margins with them,” said Eaton.

Twists on old favorite candies can tempt younger customers who always look for something different yet still have feelings of nostalgia for the sweet treats from their childhood, Mintel reported. Eaton agreed, pointing to the recent introduction of M&Ms Caramel that “set the candy world on fire.”

MERCHANDISING MUST
The chocolate category has grown significantly over the last four years at Klamath Falls, Ore.-based Fast Break stores, said Michael Cordonnier, the 29-store chain’s category manager/buyer/marketing manager. That growth has been particularly strong since the stores started offering two bars for $2.22 for standard size and two for $3.33 for king size in 2016.
“We initially did it for one month and experienced a big bump,” he explained. “The next summer we did it for two months and had similar success.”

This summer, the confection sales strategy has changed to discounting items in the category to members of the stores’ Payday Rewards loyalty program.

“We have over 35,000 customers who have our Payday cards and we want to give them high value offers,” said Cordonnier. “Besides, the margins were too slim to do the two-fers indefinitely.”

Fast Break also robustly promotes its confectionery category with numerous shippers, window posters and danglers in the aisles to create various points of interruption.

Some of the stores, depending on their size, have more than 1,000 SKUs of confectionery. The larger stores have four four-foot gondolas with five shelves of candy and one or two with gum and mints. Multi-vendor end caps and other displays facing the cash registers and cooler also showcase high-impulse items.

Cordonnier noted that every year Mars Wrigley Confectionery and The Hershey Co. come in to talk to the store managers about new items and variations on familiar favorites.

“Each meeting takes only about 20 minutes and ensures that our managers know all about the company’s latest products,” said Cordonnier.

Molo Oil’s 15 Big 10 Marts in Iowa and Illinois are always testing new ways to merchandise and promote confectionery. Some are more successful than others, said Jacque Hager, director of retail operations.
“We’ve been the most successful in the past year,” Hager said.

A test she tried in one location in May 2017 was to put all the peanut butter items together and the same with chocolate, caramel, cookie wafers, etc.

“Over 30 days we saw a decline,” said Hager.

Another attempt to rev up sales involved displaying all the confectionery products in one section of the stores, with the shared-size bars positioned right next to the regular-size bars.

“Again, we saw a drop in sales,” she said.

When Hager moved the share size bars to the top of the display and near the checkout, she saw an immediate increase in sales. They also added three-tier counter baskets by the register and they run monthly specials with at least one candy, gum or mint on promotion for a 30-day period. In addition, they place promotional shippers in other parts of the stores to keep candy top-of-mind.

“The baskets have been a great success,” Hager said. “They put the candy right in front of customers to encourage impulse purchases and it gives our team members an opportunity to upsell.”

Confectionery manufacturer partners are also playing a role in boosting candy sales at Big 10 Mart.

“We did a buy-one-get-one-free promotion with M&M’s and the response was crazy,” said Hager. “We’re just finishing running a Snickers share size promotion and our sales of this product increased by 1,132% for June.”

For the Snickers promotion, Mars reimbursed Big 10 for window clings to help draw customers’ attention. The manufacturer also provided some prizes to award team members in a sales contest built around the promotion.

Hager added that the manufacturers are doing a great job at keeping the confectionery category interesting by bringing out new products like the strawberry-layered chocolate bar that Hershey’s is introducing and all the different flavors of M&Ms from Mars.

“Unique flavors and fusions is where the market is headed,” said Hager. “And customers are more willing to try these items if they are on promotion.”