While COVID-19 has caused upheaval in multiple product markets across the economic spectrum, consumer demand for candy’s spark of enjoyment has held steady with both chocolate and non-chocolate lovers.
“Yeah, chocolate’s doing well,” said Tim Young, category manager, center store, for Holcomb Oil’s Five Star chain with 85 stores in Kentucky, Indiana and Tennessee. “Now I will tell you, though, that the peg candy set has really, really done well. … That’s definitely seen a tremendous amount of growth.”
Sales data from Nielsen for the Total U.S. Convenience channel supports that observation. Despite a dollar sales drop-off of 7.8% during the 13 weeks ending May 23, 2020, roughly paralleling the arrival the COVID-19 crisis and lockdown measures nationwide, chocolate sales for the 52-week period were up by a half percent.
Non-chocolate confections performed even better, with a 13-week dip of just 0.8% and a surprisingly strong increase of 3% for the year.
It’s an especially bright outlook, considering the National Confectioners Association told CSD that, with so many convenience store consumers staying home in response to coronavirus pandemic concerns, overall trips are down at c-stores and on the rise at grocery stores.
Young agreed that his chain felt that pain in March and April. “But May,” he said, “we came storming back in May — had a just absolutely great, great month.”
There may be a simple explanation for the resurgence. With all of the difficulties that consumers faced in the wake of the pandemic, many might have felt that they’d earned the right to treat themselves.
“There’s definitely a little bit of indulgence taking place,” said Nicolette Jaeger, director of merchandising and loyalty for the The PRIDE Stores, which operates 16 locations throughout the Chicagoland area. “We’re going through something that we haven’t experienced before, and everybody’s trying to find the new normal and trying to cope with it; and sometimes we turn to food or snacks and sweets, especially.”
Innovation Piques Consumer Interest
The confection industry is doing its part to keep consumer interest sweet.
“The innovation this year has been insane,” said an impressed Jaeger. “We saw a lot of sales start to pick up with … have you heard of the Finders Keepers? Those little chocolate eggs with the toys inside of them? Yeah, those. (And) the Kinder Bueno bars are great.”
And while novelties and upscale offerings generate excitement, candy makers haven’t overlooked old classics — instead, they’ve freshened them up with new packaging. Successfully, according to Young.
“So, Hershey came out two or three years ago with some of the snack tubes. Ferrara (a related company of The Ferrero Group) came out with, I guess, more of the traditional candy — like the Lemonheads, Red Hots — in more of a tube-type package,” Young said. “So we’ve definitely seen that do well for us. A little better price point for a value consumer.”
Jaeger said that there is a bit of a larger packaging trend with non-chocolate candy, “but it’s not as dominant as chocolate,” she noted.
And attention-grabbing signage like danglers that simulate a 3D-popout effect help pique the interest of browsers in the candy aisle.
“That segment as a whole, they’re just continually, continually bringing in new innovation and that’s why they do so well,” Jaeger said. “Whether it’s new product, or new packaging, they find fun and creative ways to make their products stand out.”
While that innovative attitude drives manufacturers to do things outside of the mold, smart c-store operators are making the most of sound merchandising principles to keep satisfying the sweet-toothed shopper.
“Like the traditional candy bar,” Young said. “We are still running a solid number with candy bars. And we’re heavily, heavily skewed in king size. We still carry standard. But most of your promotions are driven off of king size.”
The PRIDE Store’s Jaeger echoed that wisdom. “Our strategy is to place share size and king size on the top racks — more of an impulse buy — and then to definitely work novelty candy as close to the registers as possible.”
Five Star also does suggestive sell competitions every month, Young noted. “I try and rotate it around different parts of the store. Any time we do that, we see a tremendous amount of success,” he said.
Variety is Essential
Five Star employs the same planograms for all of its stores, which helps to simplify as much as possible, according to Young. He has been working on a display extension plan, as well. Its candy display is the fairly standard five-feet height, but Young asked for a bar across the top that allows for more peg candy display space.
“I picked up 16 SKUs,” he said. “So I definitely feel that when I looked at the data, we’re definitely seeing an increase in variety, and people are gravitating to that selection.”
Plus, the added room allows smaller stores to offer more variety. “I think, from what I’ve learned, people like that,” advised Young. “They really enjoy having an opportunity to kind of pick what they want and not just take what you have to offer.”