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Who are the authorities on the future of the convenience store industry, and what can you learn from them? In this series of exclusive one-on-one interviews with c-store industry leaders, started in 2010, Convenience Store News Editor-in-Chief Don Longo explores the most important trends and issues facing the convenience store industry.
This month, Longo interviews Tim Quinn, vice president of trade development for Mars Chocolate North America. Quinn offers a unique perspective, as he was chairman of this year's National Confectioners Association (NCA) Sweets & Snacks Expo, and will serve in that role again next year.
In his 30 years with Mars Chocolate North America, Quinn has held a variety of positions in sales and marketing management. With NCA, in addition to being chairman of the expo committee, he also serves as an ex-officio member of the Executive Board, and sits on the Customer Relations Committee, State of the Industry Committee and Customer Meeting Task Force.
With NACS, Quinn is on the Members Services Board Committee, NACS Health & Wellness Committee and is a gold member of the NACS Hunter's Club, among other duties. He also serves on the Retail Advisory Board, and Industry Issues and Project Subcommittee for the National Association of Chain Drug Stores (NACDS), and is on Food Marketing Institute's (FMI) Annual Business Conference Committee and Food Marketing Association's (FMA) Industry Development & Advisory Committee.
In October, Quinn will be inducted into the Candy Hall of Fame and he recently was nominated for and accepted a position on the NACS Supplier Board.
Longo: What do you consider to be the most important trends influencing retailing today?
Quinn: The trends we see are that consumers are continuing to be value conscious and they are looking for trusted known products to play a meaningful role in their lives. We see consumers seeking simple joys, doing away with excess and looking to the simple things in life to bring them happiness.
Longo: Please comment on the most significant developments relating to the convenience snacking and confectionery industry.
Quinn: There are several significant developments we see happening with convenience snacking and confectionery. First is that consumers are looking for value, portability and portion control. There is a strong increase in demand for sharing size packages, which includes our 2toGo and 4toGo sizes bars. Each package has two or four pieces, wrapped in a resealable twist-wrap package, so consumers can keep the remaining pieces clean and tightly wrapped.
Another trend is seasonal confectionery sales. Once almost nonexistent in convenience stores, seasonal candy is now showing impressive sales gains due to manufacturers creating the right impulse products in the right sizes for the convenience store consumer. We also see the drug and value channels now more aggressively pursuing the convenience store shopper.
Longo: What are your thoughts about the current evolution of c-stores? Is the push to grow foodservice sales working and how does that impact sales of other categories? In what areas are c-stores lagging today?
Quinn: The push to grow foodservice now seems to be working, with the improvement in variety and product quality. It has also increased opportunities to cross-merchandise with other categories in the store. What could be better than a quality hot dog, a beverage and a Snickers bar?
We see an opportunity to increase the points of interruption in-store with the top-selling confectionery brands. Convenience store shoppers move through the store and make buying decisions in seconds. By having these second, third and fourth interruption point opportunities for sales on these high-margin, high household penetration items, the convenience store operator has a big opportunity for a larger, more profitable ring. We tested this principle in the drug channel and showed growth of over 20 percent on these items.
Longo: Please discuss the role suppliers play in today's convenience store industry and how the retailer-supplier relationship has evolved over the past five years? How is it likely to change in the next five years?
Quinn: The role major suppliers play has changed significantly over the last five years. It has evolved from a selling transactional relationship to a much more collaborative relationship. Progressive retailers are expecting manufacturers to come to the table with solution-oriented programs that address the specific individual needs of the retailers.
Retailers also need to better understand the consumer landscape. Shoppers do behave differently depending on the trip mission, and chocolate/confectionery is no exception. Consumers will shop for our category across many outlets. Therefore, it's critical to understand the impact, leverage cross-channel learning and direct merchandising efforts to maximize conversion.
At Mars, we have invested a lot of time and resources to understand shopper buying habits. Shopper MAJIC is our global path-to-purchase framework created to integrate insights across our business and drive category strategy and execution with our retailer partners. To put MAJIC into action, Mars utilizes distinctive capabilities such as our Mars Virtual Store to collaborate with retailers on merchandising visualization and activation in a virtual retail environment. The Mars V-Store also unlocks the power of shopper behavior through virtual research and testing from the ground up, including store layout, fixtures, planograms, products/pricing, point-of-sale (POS), graphics and in-store media.
In the next five years, we see even more of a need to work with convenience store operators collaboratively as the channel continues to compete with other channels, including drug, value and mass.
Longo: What are your thoughts about the national economy? How is the economic environment impacting c-stores? How is it impacting the candy and snacks business?
Quinn: Our category is strong and healthy. Worldwide, combined confectionery and snack sales are $357 billion. Here in the United States, candy and snacks contribute about $80 billion to the retail economy. Mars and the confectionery category as a whole are showing strong sales in convenience stores. In the last 12 weeks, sales in the c-store chocolate segment has increased 9.5 percent, while non-chocolate has increased 15.9 percent, according to IRI [Information Resources Inc.] data. Because of the strength in the category and the impulse nature of confections, c-store operators should create additional points of interruption throughout the store.
Longo: Is your company heavily involved in new media, such as Facebook, Twitter, etc.? How important is social networking for consumer product goods companies?
Quinn: Social media is an outstanding way to interact directly with our consumers. It's a two-way medium, and the consumer is our best source of information and inspiration for products. Through this instantaneous relationship, we can monitor and respond to consumer feedback and attitudes.
At Mars Chocolate North America, all our brand planning is done through integrated marketing communications to ensure we have 360-degree marketing campaigns. Social media is included in that integrated approach, and we've had many innovative social media campaigns for our brands, including around the launch of our new products. As an example, our M&M'S Brand Facebook page has over 3.6 million "likes" and Ms. Brown's Twitter page, which just launched a few months ago, already has more than 5,300 followers.
Longo: Switching gears, what are the foremost non-industry specific retailing issues that are on your mind?
Quinn: Sustainability is gaining traction in the industry and the world. It's the responsibility of suppliers to ensure their products are sustainable. As one of the world's largest confectionery companies, we are focusing our sustainability efforts on three areas where we have the most expertise and can make the greatest impact:
- We will responsibly source raw materials. We pledge to use 100-percent certified sustainable cocoa in all of our products worldwide by 2020. Last month, we announced that we will exceed our 2012 target of 20 percent, making Mars the largest user of certified cocoa in the world. (Estimating that demand for cocoa will outstrip global supply by 2020, Mars Chocolate has developed a comprehensive strategy to manage this challenge under the guiding principle of putting cocoa farmers first.)
- We will make our sites and logistics completely sustainable in a generation. We are committed to eliminating our carbon footprint by 2040, and we aim to recycle 100 percent of our waste at all of our manufacturing sites by 2015.
- We use our brands as catalysts for change and encourage consumer participation in sustainability. We committed to reduce packaging use 10 percent by 2015, and we partnered with TerraCycle to produce affordable, high-quality consumer goods by repurposing surplus and used packaging from more than 20 Mars brands, including M&M'S, Snickers and Twix.