As candy manufacturers roll out holiday products, Fairfax,Va.-based Exxon Mobil Corp. is taking advantage of sweetseason’s start.
During August, ExxonMobil ran a special promotion in itsOn the Run convenience stores throughout the U.S.A free Kit Kat barwas given with the purchase of any size Bengal Traders coffee, cappuccino, hot chocolate or other hot beverage.
Chocolate and coffee have always gone hand-in-hand, especiallyin c-stores. Many chains have even designated shakers—7-Elevenand Wawa, to name two—of chocolate powder that can be stirreddirectly into hot beverages. By partnering with Hershey, On the Runwas able to take advantage of this tendency with the candy bar promotion and draw rave reviews from customers happy to walk awaywith something free, ExxonMobil spokeswoman Melissa Changcocotold CSD.
The National Association of Convenience Stores (NACS) 2007State of the Industry Report found that hot dispensed beverages andcandy rank right next to each other as two of the top 10 category revenue contributors. Since chocolate bars and packs still make up themajority of candy category sales, On the Run’s promotion was strategically conceived to couple the popularity of chocolate candy andits own coffee program.
The August promotion offered customers a choice of several different varieties of hot beverages, Changcoco said. The NationalCoffee Association (NCA) reported that 18.12% of the coffee drinkersin the U.S. drink gourmet coffee beverages daily. The goal of combining the gourmet coffee purchase with a free chocolate bar is toincrementally grow both categories down the road, especially in the candy aisle.
Kit Kat bars are one of Hershey’s top-selling confectionery items inc-stores and carry higher profit margins because of its standard size.Single-serve candy products perform the best in a c-store environment, and the standard 1.45-oz. and 1.60-oz. Kit Kat bar sizes offeredwith the On the Run promotion plays off that trend.
“Retailers will continue to see the coffee and chocolate combination trend grow in c-stores,” said Tom Joyce, vice president of customerand industry affairs for The Hershey Co.
A Sweet RelAtionShip
The thought for ExxonMobil was after participating in the promotion once, customers would be drawnback to selecting a candy bar with their next coffee purchase, solidifying a repeat consumption trend when visiting the local On the Runstore. With the BengalTraders coffee bar placed in the center of thestore, it has become a destination for customers. When passing toand from the coffee to the registers, customers are faced with displays of candy, urging them to pick up a bar on the way out.
“Most candy purchases are impulse and not planned,” Joyce said.”That is why many points of interruption in c-stores are outfitted withend caps, racks, displays and shippers. They showcase high profitmargin, impulse items that are instantly consumed.”
Retailers may be able to increase add-on sales with cross-promotions between compatible categories. The NCA reported that 54% ofU.S. adults drink coffee daily.A large number of those consumers frequent c-stores on a daily basis, many stop in every morning to pickup their coffee. With candy manufactures like Hershey targeting theadult male for single-serve items in c-stores, candy promotions canprove to be popular with a demographic that consists of collegestudents, blue-collar workers and businessmen who consume coffee every morning.
ExxonMobil hopes the promotion’s influence continues throughthe fall, pushing into Halloween with the introduction of holidaythemed candies. To aid with seasonal promotions, Hershey’s providesretailers with fixtures, racks and various suggestions on how to bundleproducts and increase candy sales. There will be a Kit Kat GhoulishCollection in regular count and 6-packs in addition to the standardsize bars that are available all year round.