Sticky Choices

Having a tough time deciding which gums and mints to carry? You’re not alone. The amazing number and diversity of new entries in this important category have most convenience store retailers second-guessing the wisdom of their choices.
From energy boosts to dietary supplements, gum and mints are now available in a wide variety of formats at a multitude of price points, presenting difficult choices when it comes to stocking shelves and displays in the candy aisle and the front counter. Since the global gum industry alone is worth an estimated $19.5 billion annually, it clearly behooves category managers to make careful choices about which gums they elect to sell. 
A major part of the dilemma is that so many of the new products haven’t been around long enough to have a useful sales track record. Indeed, data from Information Resources Inc., a Chicago-based market research firm, shows that for the 52 weeks ending July 13, Wrigley’s Doublemint led the non-sugarless gum list with 15.55% of the dollar share of sales and Orbit won in the sugarless competition with 18.32% over Trident’s 13.63%. Over the last year, sales of sugar-free gum increased 1.5%, according to the National Confectioner’s Association (NCA).
Ask and you shall receive 
One of the best ways to decide whether or not to carry a new product: listen to customer requests. That’s how Joao Carvalho, who owns a few Islander Marketplace stores in downtown Miami, began selling VE2 Energy Gum, two pieces of which are equal to an 8-ounce cup of coffee or an energy drink. 
A friend and customer mentioned the gum to Carvalho. “It kind of struck me,” he said. “I thought, ‘What else are they going to come up with?’”
Carvalho acquired a couple of cases of the gum the following day and put it out with the other 50 varieties he carries. “I was surprised at how rapidly it sold, especially as we didn’t do a point-of-sale (POS) display,” Carvalho said. “I tested it myself and found my friend was right—it does give you an instant pickup. I started telling people they should try it instead of drinking so much coffee.”
Even so, Carvalho was surprised at how well the gum continues to do. “We have a bunch of energy products—cereals, energy bars and drinks—I’m very surprised that a little piece of gum is doing so well,” he said. “It’s unique in the market.  If the company takes the time and does a good job of promoting it, it will really take off, but I think the manufacturer should add more flavors.”
Carvalho’s experience is by no means universal, however. Stephanie Poitry, category manager for 440 Kum & Go stores based in West Des Moines, Iowa, said Jolt, the only energy gum her company carries, does just well enough to stay in the planogram. 
“Functional items—with the exception of dental items—have not been successful in the past in our market,” Poitry said. “I do not anticipate adding any other energy gum items in the next planogram.” 
stocking what’s selling
Sales figures, of course, remain the determining factor of choice for many c-store retailers, as well they should. Jerry Goff, director of operations for Fred’s Minit Mart LLC, said his company has received some anecdotal information on several new supplemental gums and mints and stocked a few, but has not had a lot of success with them. Goff makes choices about which brands of gum and mints to stock at the chain’s 34 stores by what’s selling and what’s not as compared to customer feedback.
“Obviously the gum and mint rack is one of the areas we look at most closely,” Goff said. “We make changes almost monthly to make sure we have the right products.” 
While Minit Mart’s confectionery sales have gone down overall, gum and mints continue to perform well. The changes Goff makes don’t necessarily come about as a result of dropping current stock in favor of what’s new, though. 
“We still do not scan, so we work pretty closely with manufacturers,” he said. “We cull items and offer new ones on a regular basis on the basis of the market intelligence we get from them.”
C-Stores Remain Major Candy Outlets
According to the NCA’s annual State of the Confections industry report, convenience stores continue to be a dominant retail outlet for confections. The outlook for the remainder of 2008 is promising. Convenience stores accounted for 15%, or $4.5 billion, of overall candy sales in 2007. Led by new products and line extensions, the industry’s sales increased 6.2% over 2006. On average, every consumer in the U.S. spent $94 on confectionery products in 2007, the report said, and the U.S. retail confectionery category generated approximately $29 billion in sales in 2007 with a profit margin for the category of approximately 35%. 
Gum aside, mints are still a strong draw for stores, but not nearly as big as they were five years ago. As with gum, new products have proven to be crucial sales drivers. For example, ReplenishMints, which are lozenges that last for two to three minutes in the mouth, replace the antioxidants depleted by smoking. Though the manufacturer first concentrated on selling the product in tobacco stores, it began a serious c-store campaign last February. It’s in ongoing discussions with two of the top five convenience chains, and the product is already handled by McLane.  
Sales of ReplenishMints have proven successful in tobacco stores, but c-stores stand to earn high margins from this product and nearly double their average profits when the mints are bundled with cigarette sales. “Though their ranks have declined in recent years, the approximately 32 million U.S. smokers who are never going to quit make ReplenishMints a natural fit for c-stores, where tobacco sales are still high,” said Bill Smart, vice president of the mint manufacturer. “That’s the key to product movement at any level—providing a timely product that fills a need for convenience customers.”  CSD

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