The pumpkin spice latte hails the unofficial onset of fall, but Halloween kicks off the holiday season, and convenience stores are in a prime position to gain sweet profits from the candy segment this time of year.
While some customers might not view c-stores as the go-to channel for seasonal treats, the opportunity for convenience stores to capitalize on holiday candy sales continues to grow.
Consumers purchased, gifted and indulged in more than $22 billion worth of candy for Halloween, the winter holidays, Valentine’s Day and Easter in 2022, according to the National Confectioners Association’s (NCA) “State of Treating 2023” report.
In 2023, many c-store owners and category managers expect the upcoming holidays to further the momentum that’s been building throughout the year for many of the category’s brands.
Candy dollar sales have been trending upward, partly driven by price increases. Each of the four main product groups — chocolate, non-chocolate candy, gum and breath fresheners — posted dollar sales gains in c-stores over the past 52 weeks ending Aug. 13, according to market research firm Circana, a sign the segments have shed any lingering effects from the COVID-19 pandemic.
Rebound Continues
Gum and mints experienced more long-term reverberations from COVID-19 than many other candy offerings. As professionals continued to work from home or ease into a hybrid schedule, freshening one’s breath before meetings lost its value.
“Gum and mints were hit harder and have been slower to rebound. These products are often impulse buys and, with the reduction of foot traffic, in-store sales slowed,” said Lisa Olivares, a buyer for the Army & Air Force Exchange Service (AAFES). The retailer exclusively serves U.S. military personnel and their families on bases around the world and operates 10 distribution centers and more than 580 convenience stores.
Olivares also cited economic conditions such as inflation for customers pulling back on impulse buys. However, recent tallies pointed toward a more positive shift for these two subcategories despite price bumps.
“The gum and mint category is bouncing back after seeing a drop-off during the COVID-19 pandemic. Sales started to come back in 2021, but (we) saw a stronger comeback in 2022,” said Carly Schildhaus, director of public affairs and communications for NCA.
Sales Trends
Indeed, gum cashed in more than $1.1 billion in sales at c-stores over the 52 weeks ending Aug. 13, and unit sales climbed 6.1% in a year-over-year comparison, according to Circana. Breath fresheners also enjoyed sales gains, totaling more than $211 million and 4.5% growth in units.
Meanwhile, chocolate is seeing greater competition from non-chocolate confections — chocolate banked more than $3.6 billion while non-chocolate candy earned more than $3.3 billion. Both subcategories incurred losses in unit sales, but less so for non-chocolate candy, which registered greater dollar sales gains than chocolate.
“Non-chocolate continues to drive growth in confections,” said Olivares. “It is currently outpacing chocolate sales by 3% and is now almost 40% of total confection sales — a 7% growth in share from 2019 to 2023.”
Some of that increased market share at AAFES could be tied to the introduction of several new products. In addition to Vegobears, vegan gummy bears, Olivares mixed in a variety of new chewy treats, including Haribo Berry Clouds and Swedish Fish Blue Raspberry Lemonade. She also stocked a selection of novelty items, such as Push Pop Gummy Pop-its and Juicy Drop Gummy Dip ‘N Stix. Her chocolate planogram welcomed Twix Cookie Dough and Caramel Cold Brew M&Ms.
“Innovation is central to the confectionery industry — including gum and mints — with manufacturers seeking to offer consumers their classic favorites alongside brand-new treating experiences,” said Schildhaus.
In fact, NCA’s research shows a majority of consumers are curious about candy, gum and mint innovations and are willing to act on those impulses. More than 60% of people will occasionally or frequently look for new candy options.
Additional market trends shaping the category include customer interest in ingredient sourcing and benefits beyond indulgence, such as gum with functional benefits.
As the days count down to Halloween, c-stores expect customers to stock up on all kinds of candy bars, bubble gum and other sweets. The trick for retailers is to keep that interest in treats piqued throughout the holidays and beyond.
