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Confection Affection

Everyone loves candy — including the convenience store operator. In 2003, convenience stores racked up $3.9 billion in confectionery sales, a 5.5 percent increase over 2002, according to National Confectionery Association/Information Resources Inc. data. All bottom lines and numbers aside, that's a heck of a lot of candy.

Holidays have a time-honored tradition of increasing those numbers even more, as everyone knows a chocolate pumpkin or striped candy cane are the perfect complement to Halloween and Christmas. Seasonal candy accounts for as much as 30 percent of annual confectionery sales, and manufacturers have begun introducing a bevy of new products to keep that number growing.

According to Business Trend Analysts Inc., holiday candy sales are expected to grow slightly to $6.3 billion in 2004, led by Halloween (32.1 percent of the seasonal market), Easter (28.2 percent), winter holidays (23.4 percent) and Valentine's Day (16.3 percent).

"We don't see a huge impact on candy sales during those times of the year, but you can tell a difference for sure," said Bob Becker, president of Princeton, Ill.-based Beck Oil Co., which operates 18 stores. "Our distributor comes around with a list of what [seasonal items] they have to offer, but then the manufacturers individually come around — namely Hershey and Nestle — with some of the seasonal products they have to offer as well."

Many manufacturers have become more conscious of the c-store in planning their seasonal offerings, from their packaging graphics to their pack sizes. Marshmallow Peeps, owned by Bethlehem, Pa.-based Just Born Inc., has historically been associated with holiday candy, but had a hard time breaking into the convenience channel because of their large pack sizes — 24-count pumpkins or 12-count marshmallow cats. "Those pack sizes were a bit too large for the convenience store, so two years ago we introduced smaller packs," said Lauren Easterly, assistant brand manager for Marshmallow Peeps. "Instead of 24 pumpkins in a pack, there are eight, and instead of 12 cats, there are four. And they're both offered in small, 24-count, display-ready cases." Peeps is also launching a new Halloween product this year, DelightFills, which has a three-count pack size of chocolate-filled pumpkins for immediate consumption — expected to be a big hit in the c-store channel.

Treat-size bags are another option for c-stores looking to increase ring amounts during the holidays. Individual candy servings packaged in a larger polybag for distribution are extremely popular for trick-or-treat givers, but also handy to pick up on the way to a Christmas party. Having larger-sized varieties during those two holidays might prove beneficial in swaying some of those candy shoppers from the grocery or drug store.

"Convenience stores for us personally can be a great opportunity," said Dan Antico, director of destination marketing for Parsippany, N.J.-based Cadbury Adams USA LLC, which markets the Bubblicious, Chiclets, Sour Patch Kids and Swedish Fish brands. "A couple of our offerings are in 10.5-ounce bags, which isn't price-point prohibitive for a convenience store. Somebody could stop in at the last minute to pick up something because they ran out or forgot, so it works very well for that channel."

Those treat-size portions might be conducive to the last-minute shopper, but some retailers feel they don't pan out through the larger holiday marketing season. "It seems like, for the convenience store, people are still buying the single serves even during the holidays," Becker said. "I don't know if it's because historically everybody goes to Wal-Mart or the grocery store to buy their big bags of candy. We tried the larger sizes years ago and they didn't seem to sell, but we haven't tried them for a couple of years."

Merchandising seasonal confectionery items so that they call the customer's attention can help boost sales during those busy Halloween and Christmas seasons. "What works best is feature space for seasonal," said Deirdre Gonzalez, vice president of marketing for novelty candy manufacturer CAP Candy, a division of Hasbro Inc., based in Napa, Calif. This year, CAP Candy is introducing Christmas POP Toppers in Santa Claus and Frosty the Snowman shapes that double as lollipop toppers and plastic Christmas ornaments. "If you take a product that is an impulse purchase and put it in an impulse environment, which a c-store definitely is, it's the greatest place on the planet to be," Gonzalez said. "Feature areas and endcaps are also an ideal place to display, because consumers see it first."

Spectrum Stores Inc., a 102-store convenience chain based in West Point, Ga., launched a new novelty set for its candy aisle this summer in about half of its stores. "In that novelty set, we can have somewhere between 15 and 20 SKUs," said Nannette Brooks, director of advertising and marketing for Spectrum Stores. She added that seasonal items will be a major push for that set. "We plan during the holiday times to use anywhere from 10 to 12 SKUs from that set for holiday-specific novelty items. We have ordered the holiday items in the past, but they just kind of get put wherever in the store. This is the first year we'll have a stronger program in about half of our stores."
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