Candy sales have remained sweet over the past several quarters. Candy, gum and mints contribute $32 billion annually to the U.S. economy, with the convenience channel controlling 21% of the market, the National Confectioners Association (NCA) reported.
“The incidence of candy and gum purchases in convenience stores was up 4% in the fourth quarter of 2012 compared to a year ago,” said David Portalatin, convenience store analyst for NPD Group, the global research organization.
One of the main reasons for growth was a boost in non-chocolate sales, much of which can be attributed to the generation of chewy candy fans born between the early 1980s and the early 2000s.
“We have to pay attention to the generational shift that’s occurring,” Portalatin said. “The Millennials have the potential to be the largest generation of convenience store shoppers in history. Depending on how you define the generation, they are comparable in size to the baby boom. Chewy candies hit the market during their childhood. That’s what they’ve grown up with, and those items have tended to stick. The trends are starting to reflect it.”
Sweet Sensations
Candy manufacturers are both creative and productive. “More than 1,550 new candy and gum items were introduced in the U.S. in 2011,” said Jenn Ellek, director of trade, marketing and communications for NCA. “Today’s confectionery buyer has a lot of challenges.”
At the Flash Foods in Waycross, Ga., the challenge is keeping up with the consumer’s sweet tooth.
“Our chocolate continues to grow at more than 10%,” said Chuck Coleman, category manager with the 170-store chain. “Non-chocolate was up over 40% last year. The only two subcategories that were down were gum and bagged candy.”
Convenience store retailers need to be aware that chocolate is an impulse-driven category. “When consumers buy chocolate, they typically buy other things too,” Portalatin said. “We find that the chocolate buyer has about five units in the basket. They’re likely to have some chips and gum and probably a beverage of some kind. It’s still an impulse category that can drive a lot of margin growth and additional sales.”
Convenience operators continually look for new ways to drive consumer traffic, and Portalatin believes candy provides that opportunity. “If you think about how you are going to leverage this category to differentiate your offer from the rest of the market place, an expanded assortment across all the sub-categories is one way to be consumers’ destination point for candy gum and mints,” he said.
