Sweet Outlook for Candy and Confections

Despite the continued economic doldrums, U.S. confectionery sales have grown at a pace of 4.2% annually and generate $29 billion in total sales, according to SymphonyIRI, a Chicago-based research firm.

Jenn Elleck, of the National Confectioners Association (NCA), said the biggest misconception about selling candy is that candy sells itself. “Retailers don’t think they need to worry about candy. But if they put in a little more effort, it becomes a real money maker.”

Candy not only generates high margins (typically 35-40% for c-stores, according to NCA), but it also maintains sales even under lackluster economic conditions. “I wouldn’t say we’re recession proof, but we are recession resistant,” Elleck said. “Candy is an affordable luxury. People still want to treat themselves.”

To get the most from the candy category, c-store operators should focus on five key objectives:

• Avoid out-of-stocks. With limited retail merchandising space, c-store operators need to be diligent in tracking candy stocks by keeping core brands in stock at all times and eliminating slow movers. Maintaining stocks is a priority for Corpus Christi, Texas-based Stripes Convenience Stores, a division of Susser Holdings, where candy sales represent 3.5% of store sales. “The key to success is staying in stock on the items that your consumer wants and offering enough variety to cater to the majority of your customers,” said Chris Switzer, category manager for the 528-unit chain. “We focus on staying in stock on core products and up-selling customers on high profit, high volume products.”

• Cater to consumer niches. Many top-selling candies will be consistent across all stores in a chain, but c-store companies also consider regional tastes and distinct consumer demographics of each store. The spectrum of candy, gum and mint varieties is vast, but stocking flavors, brands and packaging sizes that meet specific consumer demands can give your c-store the edge.

• Plan for new products. New products are the lifeblood of the confection industry. During the past two years, 30% of confectionery sales came from new products, according to NCA. C-stores should take advantage of the marketing and merchandising support offered by candy distributors and manufacturers to promote new products, but many don’t.

• Merchandise around special events. Whether promoting a traditional holiday or a new movie release, candy lends itself to special event promotions. C-stores typically do not promote candy around the holidays as much as other channels, specifically drug stores. However, the big four candy holidays (Halloween, Christmas, Easter and Valentine’s Day) shouldn’t be dismissed, and candy promotions designed around other annual events (Independence Day, back to school, tax day) can boost sales during slower times of the year.

• Position displays for impulse sales. Candy is an impulse sale, so position displays in high-traffic areas of the store. Tedeschi, like many c-store chains, positions a candy, gum and mint set at the checkout area.  Positioning candy near the cold vault is another target area, according to “Convenience, Confections & Profit,” a joint study released by NCA, NACS and the American Wholesale Marketers Association.

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