By Marilyn Odesser-Torpey, Associate Editor.
Danna Huskey, category manager for Texarkana, Texas-based E-Z Mart Stores uses words and phrases, such as “rocking,” “shockingly great” and even “holy cow!” to describe recent sales of non-chocolate confections. She attributes much of this success to quarterly promotions she is running with support from manufacturers Nestlé for its Wonka line of candies and Wrigley for its Skittles, Starburst and Lifesavers brands.
“These manufacturers recognized the need for deep discounts to bring about a resurgence of these products,” Huskey explained. “As a result, we’ve seen sales of some items, such as Wonka’s Kazoozles, skyrocket.”
E-Z Mart, which has 288 stores in Texas, Arkansas, Louisiana and Oklahoma, is very aggressive in its promotion of kid-centric candies. In the stores, a three-to-four-foot section of the in-line average 12-foot candy set is dedicated to kid-favorite confections, most of which are non-chocolate. This display showcases about 25 core products including candy necklaces, Tootsie Pops, Sour Punch Straws and Baby Bottle Pops. Two shelves also rotate novelty items in and out on a constant basis.
Marcia Mogelonsky, global marketing analyst for Mintel, suggested that c-store retailers also consider looking into appealing to adult sensibilities by featuring some upscale non-chocolate sweets. She cited the Sugarpova brand of gummy candies fronted by international tennis star Maria Sharapova as a brand that could bring some cachet to the category. “Convenience stores do well with fancy chocolates, such as Lindt’s Lindor Truffles, so it would make sense to offer some premium non-chocolate confections as well, especially in the summer,” she said.
Mints Making Money
After trending downward for a few years, mints are making a comeback for some retailers. At E-Z Mart, they are “rocking,” Huskey said, increasing 4.75% in sales over last year even though the stores have not done any special promotions on these items. To take full advantage of this upswing, she has replaced some underperforming gum varieties with mints in her sets.
Across the board, gum is struggling. IRI reported that sales have dropped 8.7% in the latest 52 weeks ended June 16, 2013. Even with deep discounts from manufacturers, unit sales dropped 2.4% at E-Z Mart, Huskey said.
Tim Cote, vice president of marketing for Plaid Pantries Inc., operator of 103 stores in Beaverton, Ore., attributed much of this sales lag to a lack of recent innovation in the category. Although there were 40 new product introductions in the gum category last year, according to Datamonitor, Cote explained that most were simply extensions of existing brands.
“After a fairly long period of innovation, the category has gotten stale,” Cote said. “Younger people are bored with it now; they’re always looking for the next new, cool thing and it isn’t coming.”
The last product to shake up the category was Wrigley’s Five Gum, Cote pointed out. “That was a completely new brand,” he said. “When Five first launched it was a phenomenon and manufacturers that copied it were also relatively successful.” Now, he said, the current crop of tweens and teens view Five as their mom and dad’s gum.
Pricing is also a problem. “Prepriced packages offering five or six pieces for 59 cents—89 cents don’t compute as a good enough value for consumers,” he said.
Finding the Right Mix
With more than 300 new product introductions in the non-chocolate category last year, keeping up with the next big thing in candy is a constant juggling act. “I have to go with my gut and my knowledge of what our customers traditionally like,” Huskey said. “For instance, I know they like sour candies, so I make sure to look for those.”
The National Confectioners’ Association (NCA) also recommended that retailers keep up with what’s new and hot by using syndicated data and manufacturers’ reports.
Speed-to-shelf is important to Huskey, but only if the new products fit her customer profiles. “I like to be able to tell our store personnel that we’re one of the first c-store chains to pick up a certain item,” she said. “It gets everyone excited.”
Cote agreed that making the effort to launch new items within the first 30-60 days of their introduction can result in significant additional sales. “It’s pretty simple to launch two items and pop two out of the set,” he said. “Manufacturers can help by letting us know in advance when they’re planning to introduce new items so we can be prepared.”
With advance notice, Cote said, it’s often just a matter of keeping two items that would not normally have lived past the January set refresh in the mix as placeholders until the new products are launched.Manufacturers have gotten better at doing their new product launches within a specific time frame, Huskey said, so she knows the sets in her 288 stores will undergo major refreshes in January and June. Cote noted that the major manufacturers are also getting better at separating their chocolate and non-chocolate promotions.
“These products are targeted to two different groups of customers and when the promotions overlap it can be confusing,” Cote said. “The power brand chocolates also tend to overshadow the slower moving non-chocolate items when they are promoted together.”
Almost every new item gets a shot in Cote’s candy sets. “You have to throw each new product out there and let it have its run,” he said. Plaid Pantry stores carry 150 gum and mint SKUS and 35 other non-chocolate candies.
Keep Sets Fresh
The proper balance of core items and new items is crucial to the success of the candy set, said Jenn Elleck, director of trade communications and marketing for the NCA. She noted that other trade channels are more efficient in getting new items to the shelf and that c-stores should have key new items in stock before the manufacturers’ advertising and promotional campaigns kick off.
Top sellers, Elleck said, should always be kept in stock; particularly hot items may even merit double facings.
With gum it is particularly important to put all new flavors out as they are released even though the category as a whole is not growing right now, Cote said. “The life cycle for flavors is pretty short now. Before, it could take a couple of years before a flavor would become a permanent item in the set or would drift out of the assortment.” Now, he said, that window has shrunk to 6-9 months, making it more important for retailers to work closely with manufacturers and their brokers to keep up with new product introductions.
NCA also suggests that retailers use multiple vendor display racks. Both Cote and Huskey use manufacturers’ shippers to display new products. Cote also merchandises gum and mints on end caps, in coffee and fountain drink areas and on temporary displays scattered throughout the store.
“Gum and mints is the most impulsive category in the entire store,” he said. “If you just display them at the register and in the candy aisle, you’re missing multiple opportunities to capture those impulse sales.”