Sweeten your sales

Skittles

Confectionery is booming, but which areas are raking in the profits?

by Iain Hoey


Confectionery is one of the broadest categories in the independent retail market. From chocolate to sweets, to mint and gums, there is simply so much to choose from to stock that it can be a challenge to choose what to stock when the space is limited.

“Confectionery is an area where people are prepared to try new products,” says Tim Eales, Strategic Insight Director at IRI. “Generally speaking, new products are more expensive than existing ranges in store. That little premium new products have can help add disproportionally to their value sales.”

If your shoppers are anything like this features writer, trying a new type of confectionery is one of the best excuses to indulge in a sweet treat, making NPDs an important part of any store. Much like the time Kit-Kat Chunky Peanut Butter came out when it took looking in six different stores nearby SLR towers before tracking down the bar at a nearby independent to try it out, it can be a genuine reason for shoppers to visit and (hopefully) revisit. But is this a big enough reason to give shelf space to NPD?

Recent research from IRI shows that the number of confectionery products stocked by UK retailers has declined by 2.4% over the past three years. This balances with the findings that overall sales from new products in categories across the board were down 6.5% over the same period, indicating that consumers don’t have as much of a taste for the new as they used to. But why the slowdown?

“There’s a profit argument in here,” Eales says. “Once [sales] hit the ceiling, retailers concentrate very hard on making as much money out of their whole business, partly by using their shelves as efficiently as they possibly can.” He explains that stocking a new product is not an instant sales guarantee for retailers, and rather than immediately putting new product on shelf as soon as they come out, some are likely to see how a product performs in the market before they stock it in their store. “It has been proved in the past that sometimes, sales actually improved by having a lower range in store because shoppers could make faster purchasing decisions,” he says.

Regardless of the sales of a new product, there are always going to be NPD and hefty marketing campaigns as companies attempt to capture the consumers imagination. SLR can print over and over how important it is to stock certain products, but when it comes down to it, it varies from store to store. What matters is keeping a close eye on your own ranges and consistently reviewing them, paying attention to the market and being generally savvy when it comes to where the biggest profits are.

Old favourites

For every action, there is an equal and opposite reaction, meaning that for every customer looking to try something new, there will be another one right in after them who is far more sceptical of NPDs and looking to buy their favourite long-established confectionery treat. There are too many to list them from but some of the top sellers time and time again are: Skittles, Star Burst, Fruitella, Love Hearts, Wine Gums and Refreshers.

ChocolateGalaxy Swirlers

SLR’s chocolate feature last month gave a lengthy look at the chocolate category, but for those reading who haven’t pinned up the 3 pages spread to their stockroom wall, the important thing to remember about chocolate is its importance as a special indulgence snack. While consumers are generally looking for healthier food options, they will trade health for indulgence when it comes to chocolate. The other important thing to remember is its importance as an occasion treat – from Valentines to Easter, Halloween to Christmas, it captures the heart of the Scottish people as a gift for any occasion. Some of key players are: Galaxy Swirlers, Cadbury Dinky Deckers, Mars £1PMP treat bags, and Bounty Protein bars.

Mints

It is a small category, but mints and gum are among the most impulsively purchased products in convenience, and they are a consistent sales driver in c-stores if organised well. Ferrero’s Customer Development Director, Levi Boorer, category says sales can be maximised by siting in disruptive locations such as at the counter or beside the newsstand. The category has a small but vital role to play in the confectionery aisle as insights from Kantar show that 45% of consumers buy into the category.

Sharing BagsWine Gums

Whether for a big night in or to keep hidden away in a drawer as a work motivator, sharing bags are a consistent success story in the confectionery category. Evening snacking is worth over £6.5bn and counting, according to Kantar research, and chocolate remains the top choice for those settling down for a night in, with sweets in second place. Over half of all confectionery occasions take place with other people present, so having a range of sharing products, is key if retailers are to maximise the opportunity.

PMPs

PMPs are relevant in nearly every SLR feature, and there’s a good reason. More than two thirds of shoppers buy PMPs in convenience stores as competitive pricing encourages impulse sales, with more than half saying it reassures value (HIM).  There are few better ways to drive confectionery sales than an obvious PMP.

Merchandising Advice
  • Jon Eatly, Wrigley Customer Excellence Director, gives his six steps to help retailers successfully maximise confectionery sales:
  • Visibility is key in such an impulsive category, so popular confectionery items should be located just below eye level, at ‘buy level’, to take advantage of incremental sales.
  • Availability is crucial – remember to re-stock each morning and prior to peak traffic times. A fully stocked display will help maximise your profit potential and guarantee repeat visits from customers.
  • Ensure shoppers are aware of the choice and range on offer by keeping a clear and tidy confectionery display and merchandising by format and sub-category – e.g. single serving fruit confectionery, share bag fruit confectionery, single serving chocolate confectionery, chocolate blocks, sharing bags chocolate etc.
  • Rotate stock regularly so that older stock is sold through first.
  • Champion new products in store in order to raise sales and capitalise on early consumer demand.
  • Use eye-catching POS materials to draw attention to your confectionery display encouraging customers to buy on impulse. Make the most of your display and interrupt the shopper with eye catching confectionery secondary displays, clearly labelled with price and POR.

What’s going on in confectionery?

Adopt a Cow

Cadbury Dairy Milk is championing its iconic glass and a half of milk credentials in its ‘Adopt a Cow’ on pack-promotion. Available on singles and multipacks of Cadbury Dairy Milk Buttons, Cadbury Dairy Milk Freddo and Cadbury Dairy Milk Little Bars, the promotion is to remind consumers of the great taste of Cadbury and offer families the chance to adopt one of 20 cows and win a ‘farm-tastic’ weekend away to meet their new friend. Spectacular.

Singles Sensations

The ‘Singles Sensations’ campaign, leverages the strength of Cadbury’s core singles range, driving awareness to attract a new generation to the category, and reminding existing consumers of the repertoire of brands available. The ten second ads show off the brand’s five top-selling adult singles: Cadbury Twirl, Double Decker, Crunchie, Boost and Wispa.

Maynards campaigns

Maynards Bassetts Wine Gums brand recently returned to the small screen in with a TV campaign as a part of the brand’s £6m marketing programme for 2017.  Maynards Bassetts is also pushing an on pack promo competition this summer which will see the brand give away what it deems ‘marvellously bonkers days out’ to more than 100 consumers.

Get Minted

Trebor recently launched an in-store competition, ‘Get Minted’, to excite shoppers and retailers, offering them a chance to win one of 102 prizes ranging from £50 to £5,000. The promo is also giving away prizes with the top three winners scooping a pair of flights to New Zealand, complete with £2,000 spending money and possibly tickets to the ‘Wacky Sheep Race’ event. We’ll leave you to imagine just what that might entail.

Coco es Bueno

Ferrero is the latest to jump on the coconut bandwagon with a special edition Kinder Bueno Coconut variant. It joins the ever-popular range, which includes Classic, White and Dark. It launches as a special edition product to reflect the rise in popularity of the exotic seed.

M&Ms goes nuts

Mars Chocolate UK announced the launch of M&Ms Peanut & Hazelnut, a new limited-edition variant that combines M&Ms with the third biggest flavour profile in the chocolate category. Mars says that hazelnut currently has a lower share in Bitesize compared to Block – an opportunity M&Ms Peanut & Hazelnut is tapping into to deliver even more growth to the category.

Mentos Fliptop

Mentos freshened up for summer with several new launches:  a new fliptop format for its white gum range, a new a fruity Bubble Fresh flavour in a bottle in three sugar-free flavours; peppermint, spearmint and bubble fresh, a new fruity mint flavour to its popular bottle format.

Milkybar gets milkier

White chocolatier Milkybar has increased milk in the recipe, making it the products number one ingredient. The percentage of milk in the new core range recipe increases from 26% to 37.5%, and it will be used across the full product range of MILKYBAR bars, blocks, buttons and sharing bags. Nestlé Confectionery is running a £4m media campaign including TV, Outdoor and Social Media to promote the promotion.

Vimto BonBons

Tangerine Confectionery, unveiled Vimto Remix Bon Bons. The Remix sub-brand launched in 2016 with a three fruits combo ‘Mango, Strawberry & Pineapple’, and now the new Vimto Remix Bon Bons, offer a mix of both fizzy and chewy bon bons in each pack in the signature mango, strawberry and pineapple remix flavours with the added secret Vimto taste and come in 165g PMP £1 bags.