Confections Sweet Success Some segments of candy and gum have reported growth, and opportunity exists for more. BY JILL RIVKIN
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hanks to a number of shopper macrotrends positively impacting the confection category, the multibillion-dollar candy and gum segments have reported some notable successes recently. “As more people are easing up on money-saving measures, gourmet chocolate is hot, with a whopping dollar growth of nearly 11 percent over 2014,” says Jenn Ellek, senior director of trade marketing and communications at the Washington, D.C.-based National Confectioners Association. Ellek also points to the health-and-wellness megatrend catalyzing the success of dark chocolate products and products infused with fruits and nuts, as well as the presence — or absence — of certain ingredients, and bold, fun favor combinations. Te chocolate candy segment is a $13.4 billion marketplace, with gum generating $3.2 billion – both showing increases in dollar sales due to pricing, but units either fat or sliding slightly in the past year, according to IRI MarketAdvantage for the 52 weeks ending Sept. 6.
“Helping retailers think through the impact of trends downstream is a critical role we play in how best to optimize the shopping experience.”
—Aundria Cummings, Mars Chocolate North America
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Tapping Trends and Multiple Store Locations “Helping retailers think through the impact of trends downstream is a critical role we play in how best to optimize the shopping experience and simplify the world of expanded choices in the aisle, and the points of interruption throughout the entire path to purchase,” says Aundria Cummings, senior director of category development at Hackettstown, N.J.-based Mars Chocolate North America. Cummings emphasizes that while this segment is high-penetration, it’s also highly impulsive, with above-average proftability. “It’s a magical combination for leveraging secondary locations in high-trafc areas to drive incremental purchase and marketbasket building,” she says, observing that checkout, for one, has seen a “major rebalancing around space allocation” as the snacking revolution continues to impact purchasing patterns. She also points to the
signifcant 75 percent of shoppers who don’t go down the candy aisle, and thus the need for retailers to “create a shopper-centric experience that generates excitement and whimsy and drives shoppers into the aisle while balancing with operational considerations.” “Transaction zones,” according to Kurt Laufer, VP of U.S. sales at Chicago-based Wrigley, are key to understanding shopper behavior. He notes that Wrigley and parent company Mars Chocolate are “leveraging our extensive research to help our retail partners drive sales growth across transaction zones spanning from the front end to pharmacy, mobile and beyond.”
’Tis the Season to Display “Confectionery has enormous potential for crossmerchandising and increasing the basket ring,” says Ellek, using s’mores as an example of a consumer solution featuring confections, as well as pointing to chocolate and wine, candy and fowers, and even gum and mints in the automotive section as creative ways to drive incremental sales. Seasonal occasions play a huge role in category management in candy and gum, but could play an even bigger part, Laufer says, emphasizing the opportunity to build sales around events like the Super Bowl, which captures so much attention for salty snacks. To that end, Wrigley and Mars are “encouraging cross-merchandising opportunities for retailers with chocolate and nonchocolate candy and other game-day favorites, as our brands are strong drivers of impulse purchases, particularly when merchandised near salty snacks.” “Historically, retailers and manufacturers have rallied around the ‘Core Four’ in confectionery: Valentine’s Day, Easter, Halloween and Christmas,” Cummings says. “More recently, summer has played an expanded role; however, through our shopper understanding, we know that traditions and rituals within seasons ofer signifcant growth potential. Tere is unlimited potential behind making candy part of everyday celebrations.” PG
| Progressive Grocer | 2016 Category Management Handbook | December 2015