Chocolate And Novelty Items Lead Candy Sales Increases

Bagged pegged candies also see strong growth in sales and profits

Candy and gum sales struggled to reach 2-percent growth on a per-store basis last year, according to the CSNews 2011 Industry Report. This trailed a stronger 4.3-percent gain seen in the category the previous year.

Chocolate rules the category with 45 percent of sales. This segment posted the largest dollar sales growth in 2010, adding $1,071 to the average store, an increase of 6.5 percent.

Chocolate also dominates the Top 10 SKUs, with every SKU either a Hershey's or M&M Mars chocolate product. This year, Mars' Snickers brand took over the top spot from Reese's.

Innovation continues in the category as well, with Hershey's introducing its newest candy in January 2011, Hershey's Drops, which are available in the company's popular flavors such as Milk Chocolate and Cookies 'n Cream.

Additionally, novelties and seasonal candy saw a double-digit increase of 11.5 percent, showing the importance of getting these products on the shelf quickly. Retailers said getting new items to market faster is the most important factor in sales, and also told CSNews they found suppliers doing a better job of timing new releases to seasonal changes in retailers' planograms. One of the new seasonal items that hit shelves in 2010 was Peeps Chocolate Covered Mint Flavored Marshmallow Trees, timed for the Christmas season.

Another bright spot in the candy category was bagged/repacked peg candy, with a 5.4-percent increase in sales. This category typically carries a 40-percent margin, according to retailers, and has seen growth over the past few years, especially among budget-conscious shoppers.

On the other hand, the remaining three category segments — gum, non-chocolate bars and packs, and rolls/mints/drops — all saw declines. Gum, the second-largest segment with one-quarter of sales, was down 1.6 percent in sales per store, after a slight gain of 0.9 percent in 2009. Wrigley dominated the top 10 gum SKUs, according to Nielsen Co.'s Scantrack for convenience stores, with seven SKUs in total, as well as the top four.

Non-chocolate bars and packs also reversed a trend; after gaining 7.2 percent in 2009, the segment declined by 1.4 percent last year. Candy rolls, mints and drops combined to decline in 2010 by 4.3 percent in sales per store.

Additional consumer research conducted by CSNews earlier this year, the 2011 Realities of the Aisle survey, found that one-fifth of c-store shoppers (21.4 percent) reported visiting a c-store in order to purchase candy and gum, and candy/gum was one of the most popular in-store purchases, along with canned/bottled soda.

While supermarkets still lead the way in terms of market share (40.94 percent), and drugstores seem the fastest when it comes to getting seasonal items on the shelf,

Sweet Tips to Drive Candy Category Growth

According to the 2010 IRI Confections Survey, more than 17 percent of all candy shoppers purchase confections at c-stores. The good news for c-store operators is that number is expected to grow.

However, studies also show that one-in-four chocolate shoppers will leave the c-store without a purchase if the item they want is not available.

“C-stores should focus on power brands, including what we call the 'Mars Core 24,'” says Larry Lupo, vice president of Sales Convenience & Retail, Mars Chocolate “North America. Mars' “Core 24” SKUs are outperforming Hershey's top 24 SKUs in dollar sales growth. (SymphonyIRI, 52 wks thru 2/27/11) The “Mars Core 24” includes the power brands SNICKERS®, M&M'S®, TWIX®, 3 MUSKETEERS®, MILKY WAY® and DOVE® Brands.

These Mars brands are driving chocolate category growth in c-stores. In the latest 52 weeks, the chocolate category increased by a strong 7 percent, with Mars outpacing category performance by 37 percent. Much of the growth is fueled by the sale of Mars singles,which experienced a 15 percent increase in the last 52 weeks, selling at twice the rate of increase as the category. (SymphonyIRI thru 2/27/11)

“We attribute the category's outstanding growth to Mars' product innovation,” explains Lupo. “In the past year, we've introduced several popular new items, including M&M'S® Pretzel Chocolate Candies, SNICKERS® Brand Peanut Butter Squared and MILKY WAY® Simply Caramel.”

Lupo offers the following:

TIPS FOR SUCCESS IN THE CANDY AISLE

• Stock the top 50 core items. The statistics say it all: the top 50 chocolate SKUs drive 80 percent of chocolate sales in c-stores, so you'll want to keep the power brands in stock.
• Ensure speed-to-shelf for new items. New item velocities are 20 percent higher immediately following the launch of a new confectionery product. C-stores should stock key new items before manufacturers kick off their marketing campaigns. For example, in April, Mars will offer the new MILKY WAY® Simply Caramel in a larger, 2-to-Go size (king size), so c-stores should stock up.
• Maximize merchandising and display opportunities to generate incremental profits. Seventy-five percent of candy customers purchase additional items, so position candy and gum in high-traffic secondary locations, such as the frontend, food service area, beverage cooler and coffee counter.
• Remove slow-movers to make room for new items. Mark down and remove items that are dragging down sales.

Your consumers are looking for new items that bring excitement into the category.

For additional selling strategies, c-store operators can visit Mars24seven.com. Designed exclusively for c-stores, the website is a resource center with everything needed to create, enhance and maintain a thriving candy aisle and to help drive overall category sales.

An exciting, new component ofMars24seven.com is the 2011 Fantasy Racing Program. C-store operators can play this NASCAR®-themed game for the chance to win prizes, including a trip to Daytona.

From a dedicated website to new product innovation and national promotions, Mars Chocolate is committed to helping c-stores unleash the power of confection sales. confection sales.

convenience stores continue to benefit from consumer cravings, particularly for chocolate, and retain second place with a market share of 37.5 percent vs. drugstores at 21.55 percent.

Market research publisher Packaged Facts forecasts the U.S. chocolate market will exceed $19 billion in 2014, and chocolate bars/ packs will continue to dominate the category in terms of sales and unit volume.