Opportunities for Boosting Candy, Snack Sales Outlined for Distributors
There is a huge opportunity to boost single-serve snack sales, including candy, according to a new study by Masterfoods USA and the William Wrigley Jr. Company, distributors were told Thursday morning.
In fact, according to Linda Lieberman, senior director, sales planning for the convenience and drug channels at Masterfoods, there is an opportunity for convenience stores to generate $1 billion more in confectionary sales simply by using off-shelf merchandising and end-caps for candy and gum products.
"Only two out of 10 consumers go down the confectionary aisle in the convenience store," she said. "These are impulse items. So if you can get more people to use off-shelf merchandising on end caps, for the entire industry that’s $1 billion." She said top performing stores have at least three or four off-shelf merchandising locations outside of the confectionary aisle.
Noting that convenience store sales have been flat, Lieberman said a big problem is that cigarette sales are down and many consumers now pay for their gas at the pump and have no reason to go inside the store. Thus, she advised the use of merchandising vehicles at gas pumps to encourage pay-at-the-pump customers to enter the store.
She said the study found that single-serve snacks generate almost $14 billion in annual sales, representing 7.3 percent of total in-store sales. Confectionary and salty snacks account for about 59 percent of single-serve snacks dollar sales through the C-store channel, and confectionary alone accounts for almost 43 percent of single-serve snacks profits.
"Because of the impulse nature of single-serve snacks, they provide a huge opportunity to C-store operators to expand the consumer shopping basket," Lieberman said.
The Masterfoods study shows that the average C-store shopper makes 1.9 stops during a shopping trip, including the checkout counter. When asked which areas they shopped, 43 percent mentioned the checkout counter and 40 percent mentioned the beverage cooler. Only 22 percent said they shopped the confectionary aisle, and 20 percent cited the snack aisle.
"Because consumers do not shop all sections of the c-store, it is important to merchandise items that can provide complementary purchases at these destination locations," she said.
She said sales improve when salty snacks and confectionary products are also sold in the food service area. "If the consumer is not going to shop the whole store, then retailers must merchandise high impulse items in the areas of the store that consumers do shop."
"You are here this morning knowing the challenges that are out there and trying to be the best you can be as an organization," he said, emphasizing the importance of preparation, willingness to adapt to changing conditions ("Some day you might have to call an audible"), consistency, and teamwork.
"Teamwork is what it’s all about," he said. "Teamwork is why you are here this morning."
"Shula is a great individual, a great leader," commented David Dresser, vice president, tobacco purchasing, at Coremark, following the presentation. "He offered good thoughts about how you can do a better job as a leader yourself."
