Although sales of chocolate, gum and mints are flat, down or, at best, just slightly up, research shows that one bright spot in the overall confections category is non-chocolate candy, which has achieved healthy increases in both dollar and unit sales over the last year.
By Marilyn Odesser-Torpey, Associate Editor
Non-chocolate category sales in c-stores rose to $2.2 billion for the 52 weeks ending July 9, 2017, an increase of 1.39%, according to Information Resources Inc. (IRI), a Chicago-based market research firm.
At Go-Mart convenience stores, with 123 locations in Ohio, West Virginia and Virginia, category manager Ian Stewart reported that non-chocolate candy sales are consistently growing due to the constant influx of new products and players in the category.
“There is a lot of new entrance into the segment—manufacturer innovation and creativity in expanding portfolios and new emerging brands,” said Stewart. “Such a wide range of products speaks to a broader group of consumers of all ages.”
Within the category, gummy candy in peg bags and bigger bags does particularly well as do sour-flavored varieties. He added that seasonal non-chocolate candy, especially for holidays such as Valentine’s Day, Halloween and Christmas, gives manufacturers and retailers the ability to build incremental sales.
Perfetti Van Melle USA AirHead Bites, the expanded Ferrara Trolli line and Starburst (since the manufacturing issues have been fixed) are bringing in exceptionally good numbers, Stewart pointed out.
INNOVATION RELATION
The July 2016 “Sugar Confectionery in the U.S.” report from market research provider, Euromonitor International confirmed that the growth in the non-chocolate candy category “was driven by innovative new products, marketing campaigns [and] sour flavors.” It also mentions “the growing consumer preferences for chewy candy” as a factor.
Go-Mart allots four feet of inline display space to non-chocolate candy. Shippers at the front of the stores showcase new and special promotion items. Two items are selected for promotion every day.
IRI reported that chocolate candy dollar sales in c-stores rose to $2.8 billion, an increase of 1.39%. Unit sales dipped slightly to 1.7 billion. Chocolate candy sales at Go-Mart have been relatively flat, Stewart noted.
King-size bars remain the best sellers by far. One new item that is selling exceptionally well is the king-size Milka Oreo Bar. For now through 2018 he sees dark chocolate versions of traditional favorites such as Kit Kat and Butterfinger as being an up and coming trend.
Chocolate candies are given an eight-foot inline display at Go-Mart stores as well as shippers up front and an end cap for Hershey’s chocolate products.
In its July 2016 “Chocolate Confectionery in the U.S.” report, Euromonitor pointed out that “whilst consumers are still looking to indulge, they are also increasingly concerned with eating better.”
“[As a result,] health-focused shoppers have increasingly turned to snack bars over candy bars, as brands like KIND have innovated with sweet and salty flavors that satisfy sugar cravings (and even use chocolate) but enjoy a healthier positioning,” the Euromonitor report states.
Stewart noted that some large candy manufacturers are resting on their laurels, not assertively advertising or promoting their products.
“Even the introduction of a very hot new product can sustain excitement for only so long,” said Stewart. “One new product, no matter how much promotion is behind it, is not enough to keep the momentum for the brand going for a long period of time.”
Jon Fleck, merchandising manager for Cenex Zip Trip, a 69-store chain based in Billings, Mont., has had just the opposite experience with candy in locations in Washington, Idaho, Montana, Wyoming, North and South Dakota and Minnesota. After soft first and second quarters “due to weather,” sales of chocolate candy, particularly king-size bars, are up in the stores in the third quarter, a trend he attributes to vendor promotions with Mars and Hershey.
One new item that has really taken off is the M&M Caramel share size when it was recently offered on introductory shippers, he said.
Due to the promotional emphasis on chocolate, Cenex Zip Trip’s non-chocolate candy sales overall are flat with the exception of some promoted products such as Pearson Nut Rolls, sold two-for-$1 regular size and two-for-$2 king size on shippers. Mamba Fruit Chews are also doing well. Sales of some previously popular sour and sweet/sour candies are slipping.
Offering innovative products at lower prices in eye-catching shippers is one of the best ways that suppliers can support candy sales in convenience stores, Fleck said. He also noted that back-up with a lot of advertising gives new products the best chance of succeeding.
“They are not all home runs, but suppliers generally do a good job at marketing their new products,” Fleck said.
Zip Trip stores allot around 75% of their non-gum and mint inline space to chocolate candy and the remaining 25% to non-chocolate. The only secondary location for both kinds of candy is on special promotional shippers near the register area.
GUM, MINTS DIP
Gum category sales in c-stores declined to $1.05 billion, a 3.77% decline in the 52 weeks ending July 9. Unit sales fell 6.3% to 730 million units during the same period, according to IRI. Sugarless gum sales—the category’s mainstay—dipped 3.87% to $856 million during the period, while unit sales fell to 1.7 billion, a 6.78% decline.
Breath freshener dollar sales decreased 4.15% during the same 52-week period. Plain mints, which IRI designates as a subcategory of non-chocolate candy, notched a 3.57% increase in dollar sales. Unit sales were flat.
Gum sales at Go-Mart stores reflect the category’s sagging sales, while mints are flat or slightly up, Stewart said, noting “bumps” in gum sales when new varieties are introduced, specifically fruity flavors with bright packaging geared to kids.
“Unfortunately, these bumps are usually short-lived,” said Stewart. “And for every one or two successful launches, there will be many more that won’t go anywhere.”
Go-Mart highlights new items in small temporary displays at the front counter. Items that do well there are planogrammed into the stores’ four-foot inline product set space.
Stewart said that, while new product innovation is crucial to maintaining consumer interest in the gum and mint categories, he would like to see suppliers more actively promoting their core SKUs.
“We want to be able to upsell items customers are already purchasing by offering a two-for price and promotions of that nature,” Stewart said.
Despite the disappointing performance of gum and mints, however, customers haven’t slowed down their confectionery purchases at Go-Mart. Instead, Stewart said, customers seem to be buying more items from the rest of the non-chocolate candy category—particularly AirHeads, Starburst and Skittles—instead.
Cenex Zip Trip and North Carolina-based Holt Convenience Stores, are planning to shrink their inline gum and mints displays due to slow sales and give the space over to candy. Currently, Zip Trip allots over 15% of inline space to gum and 5% to mints to accommodate the ever-increasing product variety.
However together they account for only 14% of total sales, Fleck said. “All of the manufacturers are trying to find the next big thing, but I feel that there are too many options and flavors,” he said.
That’s not to say Cenex Zip Trip will be giving new items short shrift.
“As new items come out, we will continue to display them near the check stand and if they do well we try to fit them into the inline set,” Fleck said. “So far, none have really set the world on fire.”
Hannah Holt, co-owner and marketing and operations director at Holt Convenience Stores, which has 10 locations in eastern North Carolina, is planning to streamline its gum and mint displays by focusing primarily on the top sellers. In addition to sharing 12-16 feet of inline space with candy, some of the stores also have gum and mints at the coffee bar and checkout area.
Although new items keep the category fresh for consumers, she wishes suppliers would provide more promotional support, especially when it comes to bundle pricing.
Euromonitor explained that mints are stealing share from gum via new innovations such as Ice Breakers Cool Blast Chews, which are accelerating popularity.
