Chocolate dollar sales totaled $2.93 billion, up 1.2% for the 52 weeks ending Dec. 29, 2019, according to U.S. convenience store all scan data from IRI, a Chicago-based research firm. Unit sales totaled 1.7 billion, down 3.1%. Novelty chocolate candy saw a 3.9% boost in dollar sales and a 15.6% climb in unit sales for the same period. Sugar-free chocolate saw dollar sales grow 12.7%.
“With chocolate, there is a lot of new innovation coming up right now,” said Mike Askwith, chief operating officer for PBD USA Inc. in Elmhurst, Ill., which includes 25 owned and franchised locations in Illinois, Georgia and Florida. “A lot of it has to do with dark chocolate and some of the higher-end chocolates coming out.”
As competition between chocolate brands heats up, new products are offering increased opportunities for retailers.
“We’ve got a lot of limited-time introductions,” Askwith said, pointing to Hershey’s mint and dark chocolate Kit Kat Duos, as an example. “They introduced Duos, which are really, really just fantastic products. A lot of chocolate items are coming out now that include ingredients like coffee; synergies (are) building on different ways of doing business. … It’s exciting.”
Price pressures, however, challenge the category in c-stores.
“There have been three price increases in the last two years,” Askwith said. “If you look at the price of entry, in a lot of cases we’re seeing $1.49 for a standard-size bar without promotional activity and breaking the barrier of $2 for those king-size bars.”
Meanwhile, other retail channels including grocery, dollar stores and club stores are able to better compete on price.
“For example, at Dollar General or Dollar Tree or Family Dollar, most of the standard-size bars are sitting right around $1 or less — like 89 cents, in some cases,” Askwith said.
Steve Nachwalter, founder and principal of Nachwalter Consulting Group in Las Vegas, offered strategies for growing chocolate sales in 2020:
- Product placement. “Put it where people are so that they come across it. Have good, eye-catching packaging and a natural flow that brings you to that product,” Nachwalter said. This can include cross-merchandising near the coffee bar and beverage case.
- Have the employees in the store promote the product. “’Hey, have you tried this? Hey, we have this on sale. Hey, if you buy one of these, you get one of these free.’ Something along those lines,” he said.