NCA State of the Industry: Presentation Is Key to Candy

MIAMI – The classic children's movie, "Willy Wonka and the Chocolate Factory," includes a song declaring that "the candy man can." But according to Maverik Inc.'s Brad Call, one of the presenters on the second day of the National Confectioners Association's 2014 State of the Industry Conference, the lyrics should actually say "the c-store man can."

Call, a top executive at convenience store chain Maverik and current chairman of NACS, the Association for Convenience & Fuel Retailing, shared insights into both the c-store industry and the candy and snack categories with conference attendees. C-stores make up 34 percent of the retail universe, and "everyone is our candy competition," he said. In today's highly competitive world facing difficult economic times, many c-store customers face money troubles, but the channel is still growing and c-stores remain a top place to purchase candy, according to Call.

Noting that "snacking is hot," he described Maverik's decision to celebrate consumption as consumers gain and burn calories, which fits with Maverik's brand positioning as "Adventure's First Stop." Overall, Call acknowledged that the c-store industry can improve its reputation for offering mostly unhealthy products, but "no one wants salads every single day."

Recognizing that even health-minded consumers will want a treat now and then, the question becomes what to offer them -- and how much to offer them? If candy consumers have too many choices, is that a bad thing? Barbara Kahn, professor of marketing and director of the Jay H. Baker Retailing Center at The Wharton School, discussed the idea of variety during her presentation titled "Too Much Choice?"

An experiment involving making multiple jam selections available to consumers, known as the "famous jam study," once suggested that fewer choices are better, as people delay making choices and make worse choices when faced with too many options. "That doesn't ring true with me," said Kahn, noting that her own similar experiments with jelly beans found exactly the opposite.

"People like variety, they want variety," she said. "But you've got to make it so people can appreciate it."

In categories with high variety such as candy, very large product assortments can overwhelm consumers, so the key is to balance actual variety vs. perceived variety.

In such categories, retailers can offer variety, but make it easier to understand by aligning product attributes or giving products some kind of consistent scale, such as calorie counts. They can also help consumers learn their own preferences by guiding them through different features one at a time, and arranging the product assortment on shelves that match the ways consumers categorize products in their minds.

Conversely, perceived variety can be increased for categories with low actual variety by adding verbal descriptions of products (which is most valuable for online shopping); displaying products horizontally to help consumers view products more systematically; adding subcategories; and using interesting names for products.

Know Your Consumer

Lisa Nordgren, vice president and general manager of the home care and merchandise business units for Safeway Inc., stressed that "there is no average consumer" when retailers and suppliers consider the increasing diversity of the United States. This goes for new item innovation, as well as product presentation at the retail level. "It can't be one size fits all," Nordgren said.

She also emphasized the importance of the Millennial generation, which makes up nearly half of Safeway's shopper base. Characteristics of Millennials include being open-minded, connected, self-expressive, confident and open to new ideas and ways of living. To successfully market to them, retailers must communicate with Millennials in their preferred methods, including the latest popular social media networks, according to Nordgren.

Other speakers during the day included Greg Brown, president of UPS' retail sector, who discussed logistical ways to revolutionize the customer experience; Dan O'Connor, president and CEO of RetailNet Group, who discussed the changing retail landscape and drivers of change; and Jonah Berger, author of "Contagious: Why Things Catch On," who discussed ways to gain recognition for new products, use word-of-mouth to grow business and trigger purchases.

The second day of the NCA State of the Industry Conference also included two more award presentations. The Supplier Member of the Year Award was presented to Katherine Clark, vice president of sales for Capol LLC, while the Distinguished Service Award was presented to Dean Spangler, chairman of the board for Spangler Candy Co.

The three-day conference wraps up today.