By Angela Hanson
With king size no longer the undisputed ruler of the candy aisle, retailers search for new sales drivers
Bigger used to be better. That was the common view once upon a time, when king size ruled the candy aisle and the largest chocolate bars were among the most popular products for consumers and retailers alike. But does king size have the same sway these days?
"Not so much," said Chris Carter, owner of Shout and Sack convenience store and deli in Vinita, Okla., echoing the opinions of a number of single-store retailers and candy suppliers.
King size might be an old favorite, but a wide variety of new chocolate candy products, brand extensions and size formats were on display at this October's NACS Show – and store owners will have some homework to do to decide which items work best for their customer base.
For Carter, one format that's been picking up in the last year is the theater box. "That's become very popular," he said in an interview with Convenience Store News for the Single Store Owner. "That has really grown for us." He also noted that the popularity of bagged candy is on the rise.
Suppliers have likewise adapted their size options to meet the evolving desires of today's consumers. Mars Chocolate North America, in particular, acknowledges seeing "significant growth" in shareable products based on their convenience, portion control and portability.
"In the c-store channel, around 92 percent of chocolate sales are for immediate consumption. Of that number, single-size packs represent 42.5 percent, while larger, sharing packs represent 49 percent," stated Larry Lupo, Mars Chocolate's vice president of sales for the convenience and drug channels.
To make sharing – or saving for later – easier for consumers, Mars launched its 2toGo, 4toGo and Sharing Size formats, which all contain multiple pieces wrapped in a resealable twist-wrap package.
At The Hershey Co., king size has remained its strongest pack size for growth during the past two years, but it is seeing some movement in other segments as well. "We've also seen some travel centers and higher volume retailers do well recently with take-home pack types – specifically, unwrapped, hand-to-mouth offerings in stand-up pouches," noted Jeff Lilla, national c-store sales director for Hershey.
Overall, Hershey continues to see strong demand for traditional, core chocolate products. "There is considerable growth in what's referred to as the hand-to-mouth segment, led by Hershey's introductions of Reese's Minis, Hershey Drops and Rolo Minis," said Lilla. "In addition to new options and brand extensions, consumers tend to gravitate to their top four to six brands that they know and love."
Seasoning the Mix
SymphonyIRI data shows that in the 52 weeks ended Aug. 12, c-store seasonal chocolate sales increased more than 30 percent vs. the previous year, to a total of $52 million.
"This dramatic increase is due in part to manufacturers, like Mars, offering seasonal items in single servings," said Lupo. Mars' newly revamped Singles Shapes portfolio now includes Snickers Peanut Butter Santas for Christmas, Milky Way Simply Caramel Hearts for Valentine's Day and Snickers Eggs for Easter.
Different flavors also make a difference to chocoholics, whether or not they're prompted by a special occasion. "[It] seems like the different flavor variations promote people to try items over just having different size options," said Jill Dreher, owner of JD's Quik Stop in Akron, Colo., who noted that king size and the "old standards" in regular size remain popular with her customers.
The familiarity of a trusted brand combined with the novelty of a new flavor may be just the thing to hit customers' sweet spot. Shout and Sack's Carter commented that having dark, white and milk chocolate varieties of Kit-Kat bars attracts attention in his store.
When it comes to flavor trends, Mars has seen interest in white chocolate outpacing its market share. "White chocolate is the smallest chocolate segment, but shows the strongest growth," Lupo said. "Within the white chocolate category, the cookies and crème segment has increased tremendously." In response, the company introduced Dove Cookies & Créme earlier this year.
Additionally, "the vanilla flavor segment is outpacing growth in all major categories," said Lupo, which is why Mars will offer a limited-edition Milky Way French Vanilla and Caramel bar early in 2013.
"Placing candy bars at impulse buy areas seems to improve sales," said Dreher of JD's Quik Stop. "Promotional setups provided by manufacturers seem to promote interest, especially if pre-priced at a lower price; the theme they promote seems to make no difference in our store."
Carter agreed manufacturer promotions are effective, especially for Hershey and Mars candy. Offering two king-size bars at a cheaper overall price point gets customers to open their wallets, he said.
He's also seen firsthand how retailers can reap the benefits of manufacturer advertising. Twix is a classic brand, not an item that's new to the market, but Carter reported that it has seen the most growth among all chocolate bars in his store over the last year.
What's more, Carter has trained his staff in what he calls the "auctioneer" process – pointing customers to what candy they can get at the register for just a little more. "Price means a lot," he said.
Layout of the candy aisle does, too. "Placement is key; it's important to place top sellers in the middle of the section first and scan from left to right," said Lupo of Mars. "It puts the products at eye level with the shopper, making it easier for them to find the brands they want."
For stores with the space, Mars offers the "Mars Core 35" set, which includes the company's top 24 items plus 11 new Mars products.
"Since shoppers move through the store and make buying decisions in seconds, retailers should increase the points of interruption to attract more impulse purchases," Lupo added. "You'll increase sales by simply placing confections in high-traffic areas like by the register, the coffee rack or in the cooler vault."
Careful examination of a store's consumer base can provide insight on what specific candy they prefer. Carter, whose store is on the famed Route 66, sees a higher volume of customers who are traveling through, as opposed to repeat local customers. To accommodate them, he expanded his travel section to 12 to 16 feet of boxed candy, which he says "looks nice" and has posted good results.
Single-store operators also shouldn't be afraid to mix up their chocolate selection. At Shout and Sack, Carter is willing to try any new product for 60 days. Once that time is up, if consumers haven't embraced it, he'll replace it with something else.
Ultimately, even with distinct customer preferences for the chocolate candy they like most, there's still room for single-store owners to boost sales of old favorites and new potentials. Retailers just need to do their research and be willing to try something new.
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