Cultivating Candy Sales – CStore Decisions

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The chocolate and non-chocolate candy categories are both expected to perform well in 2022, fueled by a desire for value, new product launches, a return to pre-pandemic shopping patterns and America’s enduring sweet tooth.

Chocolate candy should continue to increase market share, according to Rockville, Md.-based Marketresearch.com, with bite-sized and dark chocolates leading the way. Dark chocolate candies align with the current healthy-eating trend, and consumers are reaching for it because of its reported health benefits.

Amid concerns about obesity and diabetes, more consumers are also reaching for sugar-free and low-calorie candies.

IRI numbers for the 52 weeks ending Dec. 26, 2021, for the convenience store channel showed chocolate candy at $3.17 billion, up 8.9%. Box, bag and bar products under 3.5 ounces recorded sales of $2.61 billion, up 7.9%. The same products in packages above 3.5 ounces experienced sales of $441 million, up 15%. Sugar-free chocolate candy sales rolled in at $665,737, up 56.9%.

On the non-chocolate side, c-store candy sales were $2.64 billion, a rise of 20.6% for the period. Sales of gum totaled $839 million, up 5.8%. Breath freshener sales were $177 million, up 6.2%. Non-chocolate chewy candy recorded sales of $1.88 billion, a 19.6% rise over the previous year. Sugar-free diet candy totaled $776,486, up 16% for the 52-week period.

After some challenging sales months mid-pandemic, gum sales saw a rebound at the end of the year. With sales topping $701 million, sugarless gum saw a 6.6% increase, while regular gum, with sales of $139 million, saw a 1.5% uptick, for the 52 weeks ending Dec. 26, 2021, per IRI.

BestValue

Retailers are putting their best foot forward in 2022, catering to customer preferences in the candy category.

Sam Odeh, president of Power Buying Dealers (PBD USA) in Elmhurst, Ill., said his stores, which include 25 owned and franchised locations in Illinois, Georgia and Florida, now feature the majority of candy in peg bags. “It’s the best value, for both consumers on quantity/value and for us retailers on margin,” he said.

PBD USA’s executives see sour and hard candies as leaders given today’s market conditions. Combinations of chocolate and snacks have proven popular, Odeh pointed out.

“Hershey has done a few, as has Nestlé, especially with chocolate pretzels,” he said.

The price point that works best, Odeh added, is $2.99, with promotions offering two for $5 having proven most effective. He recommended bundling candy with fountain drinks or coffee.

Candy buyer Heather Key of the Army & Air Force Exchange Service (AAFES), which operates more than 470 convenience stores, said that her convenience stores continue to see non-chocolate becoming a larger piece of the confection pie.

“Fruity confections, gummy, chewy candy (were) nearly 40% of everyday candy unit sales in 2021, whereas in years past it has been a smaller percent, closer to 30-32%,” Key said.

The most notable trend in the confection business in 2021 was the growth of natural, organic and low-sugar items, Key suggested, achieving sales growth of more than 100% vs. 2020.

More Normal

The indications going forward are good. Don Burke, senior vice president for Management Science Associates Inc. (MSA) in Pittsburgh, cited InfoMetrics data indicating that the candy category has done very well over the past year.

“The category grew nearly 5% in unit volume and, impressively, over 12% in dollars due not only to the growth in sales but also due to the benefit of increased pricing,” Burke noted. “Pandemic concerns that changed shopping and commuting activities over this past year had a significant effect on disrupting the typical candy-consumption patterns.”

As pandemic fears lessened in early fall before the omicron surge, Halloween trick-or-treaters returned in numbers approaching a more normal year, Burke said.

MSA executives expect consumer purchase patterns to return to a more normal pattern in 2022. “Retailers may need to adjust their product mix, slightly adjusting their selection to favor smaller package sizes,” Burke said.

Contributing to this likely trend will be the impact of inflation, which will also cause shoppers to look for lower-priced selections. As pandemic fears abate and consumers become more comfortable back in their typical daily routine, they may be more likely to try new products, which could present a stronger opportunity for new product introductions.

Value will always be important.

“The one tactic that has gone from a ‘needed to win’ to a ‘needed to play’ is two-fer pricing,” suggested Steven Montgomery, president of b2b Solutions LLC in Lake Forest, Ill. “Any c-store retailer that is not offering discounted pricing when you buy two candy (products) is at a pricing disadvantage to its competitors.”

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