Sweet Opportunity

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Sweet Opportunity

By Joan Driggs, EnsembleIQ - 03/05/2014

The overriding theme of the National Confectionery Association’s 2014 State of the Industry Conference in Miami (March 2-5, 2014) was one of opportunity. Well, actually opportunities: to build better messages, create a more engaging experience, and of course, sell more candy.

NCA’s Sweet Insights data indicate that grocery retail is the channel enjoying the greatest growth of candy sales, at 3.2 percent. More good news is that 58 percent of candy purchases occur at supermarkets each month. Now the bad news: 50 percent of consumers think the candy aisle experience is a tepid “okay”; and more than 40 percent of respondents indicate that the candy aisle is as exciting as the bread aisle. This is not intended as a compliment to either candy or bread.

The challenge is to keep consumers purchasing in the grocery retail channel. There are a few retailers that are heeding this call and successfully tapping into the emotional attachment consumers have with candy. Wegmans and Hy-Vee were called out for creating destinations that excite and incite purchase.  Hopefully they are at the forefront of a new wave.

Competing for the candy buyer

Other channels are not sitting back and waiting for grocery retail to drive excitement. Threats are everywhere because candy is available everywhere. Aside from the more traditional channels, including mass merchandise, convenience, and dollar, grocery retail is competing against office supply, home-goods, hardware, and apparel stores for confectionery sales. Brad Call, a member of the Board of Directors for convenience chain Maverik Inc., and chairman of the National Association of Convenience Stores (NACS), told SOI attendees that Maverik has a Candy Corral, a far cry from standard racks found in most convenience outlets. This should be an indication that space constraints are not an excuse not to invest in an experience.

And speaking of space, what if traditional merchandising arenas no longer exist? Dan O’Connor, president and CEO of RetailNet Group, shared factors that will be shaping the 2020 retail landscape, including an increase in online shopping, which isn’t impulse purchase-friendly. Even more startling, mobile technology may mean that check lanes won’t exist in 2020 – a mere six years from now.  The upside might mean that valuable retail real estate can be reimagined, but it also removes candy-friendly impulse alleys of supermarkets.

Providing support for more variety – if not excitement – Barbara Kahn, Professor of Marketing at The Wharton School, demonstrated that consumers are attracted to vast assortments of candy. More importantly, they buy more candy when there’s a lot to choose from, and are more likely to consume more. The trick, or rather science, says Kahn, is organization – think merchandising! – designed around consumer preferences and mindsets.

Sweet rewards

NCA also acknowledges that candy has played a part in the obesity epidemic. But 93 percent of respondents to NCA research believe they alone are responsible for their health. C-store chain Maverik is about to launch a “Consume it/Burn it” app and program that rewards users – with treats – for burning calories. The message is to consume responsibly. I’ve even seen snack packaging that promotes “snack responsibly.” These are two great, straightforward ways of promoting moderation.

All categories have an opportunity to better connect with the consumer. But few have the sweet opportunities of confectionery. There’s a demonstrated “want” from the consumer; there’s a strong, positive emotional pull; candy is affordable; it’s day-part neutral (how about KitKat and coffee?); and then there’s packaging that singularly or collectively helps sell. Those are some sweet opportunities.

For more, view my tweets (@JoanPGrocer), visit www.CandyUSA.com/conference2014, or progressivegocer.com.