SLR speaks to the main confectionery suppliers to discover what their focuses are for the summer and beyond, and finds out how retailers can ensure they are getting their share of a vital market.
by Émer O’Toole
One of the kings of impulse, confectionery remains a key profit-driving category in any c-store — but the market has changed over the last few years with larger pack formats and hanging bags grabbing an enlarged share. So what does this mean for retailers, and what does the next few years look like?
There has been a quiet revolution going on in UK convenience stores in response to the backlash against sugar. With many supermarkets banning chocolate and sweets from their checkouts, a new breed of ‘healthy’ confectionery — in the form of fruit and nut mixes, and sweets made from 100% fruit juice — has gained ground. The media might be out to demonise sugar, but retailers are still experiencing strong demand for sweets, with shoppers keen to treat themselves, so this category remains an important impulse sales opportunity for retailers.
- Focus on getting the main confectionery display merchandised well, with strong availability of core lines.
- Multi-face key lines to help ensure strong availability and attract shoppers to make those all-important impulse purchases.
- When merchandising pouch lines, core favourites such as M&M’s and Maltesers should be displayed in a prime location. For example, at eye level on a wall display.
- Ensure you use all POS available to you, such as dumpbins and counter units — these are guaranteed to raise awareness and generate impulse sales.
- Put products such as M&M’s and Maltesers alongside savoury snacks and drinks to promote additional basket spend in store for shoppers looking to fulfil their big night in shopping mission.
Retailers should monitor trends and shopper behaviour to determine which categories they should focus on to build on success. Confectionery trends performing well include hanging bags, which represent 41% of sugar confectionery sales — according to IRI market research. Perfetti Van Melle (PVM) says sharing bags are in major growth, driving the confectionery sector and represent the largest portion of value sales within the market. Stock the big sellers to get the best results. PVM offers a wide selection of PMP sharing bags, including family favourites Fruittella and Mentos, and Cloetta offers a Chewmix hanging bag format.
Impulse sales
Confectionery is one of the most impulsive categories in store, and visibility is the key to getting more sales since the majority of purchases are unplanned. PVM independent research suggests that 80% of confectionery purchases are influenced in store, and over 30% of those purchases are purely impulse driven. As a result, the move to take confectionery off the checkout has undoubtedly affected the performance of the market. This, combined with a change in focus by many manufacturers to prioritise bags and pouches over the core singles, has resulted in an increased average price per unit.
Demand for bigger volume bags and pouches at lower prices has meant that value per kilo prices are continually falling. This in turn puts pressure on value growth, but it’s not all bad news. Shoppers have always known that there is sugar in confectionery, unlike other products which may have surprising sugar content levels or masquerade as healthier options. Confectionery as an occasional treat is how many consumers enjoy this category.
Confectionery is one of the most important PMP categories for retailers, with 68% of stores already stocking PMP sweets. PMPs is the second largest category after cigarettes, with 68% of retailers stocking confectionery PMPs. Independent research from PVM suggests that 80% of confectionery purchases are influenced in store, and over 30% of those are purely impulse driven. In fact, him! says 48% of customers would be encouraged by PMPs to swap to a new brand.
Retailers should make sure that PMPs are easy to see, and that they are stocked in prominent places where impulse shoppers can take advantage of them. For example, Smint £1 PMP might work well beside the coffee machine, and Fruittella sharing bags could be part of a larger ‘Big Night In’ display. Wrigley extended its popular range of PMPs in July 2015 for its best-selling sugar confectionery brands, Skittles and Starburst, with the introduction of four additional hanging bags with a £1 rrp price flash. The £1 price point is a key sales driver for the convenience channel, as it provides consumers with the assurance that their purchase is good value. Neilsen data reveals that Wrigley saw an increase in sales of 82% in its PMP hanging bags since the launch of £1 PMP lines.
A share in sales
Sharing bags are particularly popular during the summer as consumers look for bigger treats for parties and barbeques. PMPs are likely to be a particularly popular choice this summer, and with some really big sporting occasions planned for 2016, this year is expected to prove even more profitable in terms of sales of party items and treats to share at home during the Euros and Olympics. Summer parties and BBQs mean that consumers are more likely to be shopping for good value sharing packs.
According to IRI market research, sharing at home represents 56% of the occasion market. While other categories may be struggling to sustain sales in the current market, sugar confectionery continues to flourish. Stocking a fun and eye-catching range of sharing bags can increase shopper spend, and encourage consumers to buy into the occasion. Mentos Fruit and Mint Mentos bags are experiencing strong sales rates. Bags are a great format for consumers to enjoy at home with friends and family. In addition to the classic Mentos chewy candy — available in classic mint and fruit — the brand introduced Mint Crumbles and Mentos Mint Chews to the range last year. Fruittella Core sharing bags (Duo Stix, Summer Fruits and Juicy Chews) are growing 4.8% in total market compared to an overall sector increase of 1.2%, and the brand sees the sharing category as a major area for growth in 2016.
“Sugar confectionery is a space-effective category and if conducted in-store correctly can drive easy additional sales for retailers. Be sure to include a variety of fruit and mint flavours to offer your shoppers a range of options,” says Levi Boorer, Customer Development Director at Ferrero.
- Give new products prominent space with simple signage to make customers aware of what’s on offer.
- Where possible, multi-face your bestselling products, this helps ensure availability of key products and makes it easier for shoppers to find what they are looking for.
- Take advantage of self-merchandising, and counter top ready packaging to help drive impulse sales.
- Cross merchandise and use secondary siting effectively to drive linked purchases.
- Ensure you are stocking products which offer consumers something different to competitors in terms of flavour or format.
- PMP signal value proposition – site these products together, from multiple categories in a prominent part of the store to bring consumers instore and drive impulse sales.
- Have a dedicated kids’ fixture, encompassing different formats, flavours and price points.
Once you have all the key trends covered, it is vital to display them correctly, in accordance with your individual consumer base. New products are the frontrunners in the confectionery category and retailers should offer customers new and exciting products to try. For instance, Ferrero recently launched Tic Tac Mixers and its research reveals that nearly two thirds of existing Tic Tac consumers would buy mixers in addition to the core range, providing retailers with a powerful incremental sales opportunity. Additionally, Ferrero recommends retailers maximise their sales opportunity by siting products in disruptive locations, since its research shows that 31% of shoppers’ only buy one item when visiting a convenience store — demonstrating the importance of creating intelligent disruption in store to drive further impulse sales. Promotions and PMPs should be used effectively when merchandising sugar confectionery.
It pays to display
Placing products next to the counter or magazines and newspapers where there is longer dwelling time is a clever technique to drive sales. As confectionery is an impulse buy, offers can spur customers on to purchase multiple items as well as attracting them to the fixture in the first place. Dan Newell, Confections Marketing Manager says: “A complete night in solution is crucial. Remember to focus on products that are ideal for sharing such as Starburst ‘Tear and Share’ Pouches. Building a clear display that communicates the ‘Big Night In’ occasion will also draw shoppers into the fixture and cross category promotions will certainly encourage incremental purchases.” Encourage additional purchases using cross category promotions, such as ‘buy a sandwich, drink and confectionery for £3.’ Single price point ‘Big Night In’ promotions are growing in popularity, allowing shoppers to satisfy all of their needs in one go. This includes ‘dine in for two’ meal offers and in store deals which include a DVD, confectionery pouch, e.g. Skittles or Starburst, and drink for a reduced cost.
Sweet treats
Confectionery is one of the top five purchases in the convenience channel, according to PVM market research. Here in the UK, sweet buying habits change as we move towards warmer weather, with more people opting for fruity sweets — as opposed to chocolate bars. Fruittella Summer Fruits bag (orange, lemon and strawberry flavours) is a core line, and contains the traditional Fruittella square-wrapped chews, whilst Fruitella Juicy Chews has twist-wrap versions of the same combinations. Fruitella Magic wows kids by transforming into various flavours as they chew and Fruitella Duo Stix offers two delicious flavours at the same time.
Chocolate innovation
Following strong performances from the range of Galaxy Duet singles, Mars recently extended its Galaxy Duet range to offer its popular Cookies & Cream, Caramel & Shortcake, and Toffee & Popcorn variants in a new large block format.
Bringing a unique consumption experience to the chocolate block category, the new Galaxy Duet large blocks will feature two indulgent flavours that consumers can enjoy separately or combined to create a unique taste sensation, but in a format that is ideal for sharing.
With confectionery being one of the biggest categories in convenience, it is one that will always sell well. However, retailers should make the most of their confectionery displays by using eye-catching POS materials to encourage customers to buy on impulse, and rotate stock regularly.
A dedicated children’s area can maximise pocket money sales from a key audience, particularly in summer, whilst children are out of school and may be more likely to enjoy a sweet treat in between sporting activities. Children’s Sugar Confectionery is a key player in the category, valued at £344m, it represents a third of the market and shows the importance of children as consumers. Be aware of the height of the shelves in this fixture and allow children to shop independently. Similarly, price marked multi-packs appeal to parents looking to stock up on a cupboard treat for children whilst they are out of school for summer.
Fruittella Zoomania bags contain a mix of fun animal-print wrappers in each pack. They’re handy for snacking on and the £1 PMP packs, introduced last year, are ideal for those making a last minute impulse purchase. Following a significant 74% sales uplift since 2010, Chupa Chups introduced its much-loved Airheads bite-sized candies in 2015. Chupa Chups lollipop bags are an ideal choice for retailers. Whether it’s Super Sour or Kolomania tongue-painting variants or more traditional fruit, ice-cream and cola flavours, there is a Chupa Chups to suit every palette. Available in both regular and mini-sized lollipop bags, long-lasting Chupa Chups are the ideal treat for a big night in.
Swizzels new-look Rainbow Drops will sell well in the kids confectionery category, and its new packaging has a clearly visible calorie flash meaning they are a great choice for the increasing number of shoppers looking for portion control and lower calorie treat options. Rainbow Drops are available in 10g bags – part of Swizzels ‘flashback to 10p’ range – 32g and 80g bags as well as multipacks. The gums & jellies category remains the largest within kids’ sugar confectionery, and a continual driver of sector growth. To capitalise on this, Swizzels will add two new flavours to its Squashies range this August: Drumstick Sour Cherry & Apple and Drumstick Bubblegum.
