The Sweet and Sour of Managing Candy
So many new SKUs, so little time to re-planogram.
That's the challenge facing most c-store operators, including Marie Read, product line manager for Wawa Inc. With the candy, gum and mints category red-hot and extremely dynamic in the Wawa, Pa.-based chain of more than 540 stores, Read has been busy managing limited editions and new items. She and her colleagues have been working to quickly assess each item's potential; find space for the lucky winners on the chain's tight shipper, in-and-out display or counter-merchandiser schedule; review their performance; and, if warranted, find them a permanent home on the planogram in time to take full advantage of customer interest.
With candy guaranteed only one major reset a year, and gum and mints getting two updates, the category's primary points of entry into the stores are the shippers, in-and-out and counter programs. A misstep here or there by Read could mean the stores missing out on key selling weeks for a hot limited edition or facing nearly a year of a slow-mover taking up shelf space.
"I'd prefer to update the planograms more often, but between candy, gum and mints, warehouse snacks, energy bars and cookies, we could be constantly resetting and still not getting everything done," Read said, noting six resets were scheduled for July through September alone. "And there is so much blurring now between the categories, sometimes it's difficult to figure out where to put products."
Wawa's solution: All new items and limited editions are ordered and displayed via shipper or the two other featured displays. The downside is that the chain typically has only a two-week window to sell the product.
"We can try to get more of a new product in if it sells out on the shipper or order some open stock to back up the shipper or give to managers to merchandise where they can, but we have to be careful," Read said.
The chain ordered additional stock of Snickers Cruncher, for example, so that managers could fill it in near the Snickers' SKU on the shelf or on the in-and-out display rack, which usually holds candy. Managers generally have a hand in merchandising the rack.
Once in a while, products will be cut into the planogram outside the major reset timetable, but that is a rarity.
"Sometimes we don't have time to wait and see if a product is going to be a big hit or not before it gets shelf space," Read said. "Like low-carb last year. The demand for that kind of product comes and goes quickly. We try to sell through at the store level as best we can and if we can adjust the planogram with one or two items, we send a field force out to do that, without waiting for a year."
Still, juggling priorities is a challenge. "[Hershey's] Take 5 is a good example of something we didn't take advantage of at all," Read said. "We got the first shipper in and couldn't get it on the planogram until a couple months ago. I had to go where my biggest opportunity was at the time for resetting a section and it was in another category. I had only a couple candy items to cut in."
For this reason, Read sometimes wishes the candy manufacturers would bundle introductions of new items or limited editions, making it easier and more cost-efficient to find them a permanent home on the planogram, especially if a scheduled reset had been done recently and was not scheduled for a while.
When manufacturers decide to make a popular limited-edition product a permanent offer, Read said, she isn't always able to cash in on consumer demand as much as she would like to. "Sometimes there is a bigger lag in the time it takes to add it as a permanent item than I'd like. But sometimes the manufacturers aren't ready either. With the Reese's Big Cup, there was a huge lag between when it was first featured and when it was made permanent."
Positioned as tie-in purchases — a ticket builder rather than a traffic builder — candy sales at Wawa grew 20 percent last year. Because new items and limited editions typically bring excitement to the category, Wawa is less likely to discount these products than it has in the past.
"Sometimes to get extra sales on an item, all you need to do is feature it on a shipper," Read said, adding c-store operators in general must be careful not to overprice the category.
Since each Wawa store displays only one candy shipper at a time, selecting the brands with the best potential for the chain is crucial, Read noted. "We do a mix of limited editions, new item introductions — especially for gum, such as Cadbury-Adams buy-one-get-one-free shippers — and, in about half the cases, established brands, like M&Ms," she noted.
"If there is any question in my mind that a limited edition or new item will be a huge hit, or if it doesn't get a good reception in the office, then I pass. I have to be careful that the item will move in the time we've given it in the store.
"Something like Reese's Big Cup, which has some traction already [through the Reese's Peanut Butter Cup], I'd schedule. I look at sales history of comparable items; but some of it is gut feeling."
Gum and chocolate get the lion's share of displays. "Our gum business is on fire right now — some of it due to our resets and some of it due to the new items out now," Read said. "Gum is 30 percent of the category's business and chocolate is 30 percent, so my efforts will go into those categories. Chocolate may be stealing some of the thunder from non-chocolate in terms of exposure and shippers, but that's where the growth is coming from."
There are few exceptions to the one-shipper-at-a-time rule. "We are looking to bring in two of some items in the future, though that won't apply to every store," she said, noting shippers may hold anywhere from 96 to 432 pieces. Read tries to avoid back-to-back shippers featuring one manufacturer's candy or similar items.
Sometimes, candy companies miss their limited-edition or new-item opportunity simply by offering shippers that won't work in Wawa stores. "For a while, there would be only one or two shippers we could use out of the 12 or 15 one major manufacturer offered," she said. "They'd have items we don't carry or items that didn't make sense for us or items we'd already discontinued. Or they were including second- and third-tier items. I had no flexibility with what shippers to go with."
After "cleaning up" the shippers and offering more limited editions, the manufacturer now gets eight or 10 displays on the schedule each year.
Like most retailers, Read's biggest challenge is the sheer number of new items and limited editions she's offered, and removing old SKUs from the planogram to make room for items that have gotten a successful trial. "Every time we planogram for something new, something has to come out. We'd have an item that was chugging along with a steady base, but no longer meets the kinds of hurdles we have now to keep new items coming in."
Though most manufacturers understand the business sense of eliminating their slow-moving items, some get defensive. "It is in their best interests to take out an older product that is selling only three pieces a week, if I can sell 15 of the new one," she said.
Other suggestions for manufacturers: Make sure retailers have enough lead time before the launch of a limited edition, Read said, "and when they come to us with information, they need to understand what it is and speak to it. They can't just print it out of their computer and march in and expect us to lap it up!"
Even if it is chocolate-covered.
Talkin' Trends
Will dark see the light? Will smaller be bigger? We asked Wawa Inc.'s Marie Read to talking about the future of sweets. Here's what she had to say:
"There aren't really any megatrends. All the trends seem to be little ones.
"It looks like dark chocolate definitely is on the rise and there could be a groundswell; it's hard to know. I think dark chocolate's [purported health benefits] will be everybody's excuse to eat chocolate. You can't say no when it's good for you!
"It looks like smaller pieces could be a big opportunity, too. What I'm hearing is people are trying to satisfy cravings with littler pieces of something better [quality].
"Fruit flavors seem to be big, too, especially in gums. That could be an opportunity."
That's the challenge facing most c-store operators, including Marie Read, product line manager for Wawa Inc. With the candy, gum and mints category red-hot and extremely dynamic in the Wawa, Pa.-based chain of more than 540 stores, Read has been busy managing limited editions and new items. She and her colleagues have been working to quickly assess each item's potential; find space for the lucky winners on the chain's tight shipper, in-and-out display or counter-merchandiser schedule; review their performance; and, if warranted, find them a permanent home on the planogram in time to take full advantage of customer interest.
With candy guaranteed only one major reset a year, and gum and mints getting two updates, the category's primary points of entry into the stores are the shippers, in-and-out and counter programs. A misstep here or there by Read could mean the stores missing out on key selling weeks for a hot limited edition or facing nearly a year of a slow-mover taking up shelf space.
"I'd prefer to update the planograms more often, but between candy, gum and mints, warehouse snacks, energy bars and cookies, we could be constantly resetting and still not getting everything done," Read said, noting six resets were scheduled for July through September alone. "And there is so much blurring now between the categories, sometimes it's difficult to figure out where to put products."
Wawa's solution: All new items and limited editions are ordered and displayed via shipper or the two other featured displays. The downside is that the chain typically has only a two-week window to sell the product.
"We can try to get more of a new product in if it sells out on the shipper or order some open stock to back up the shipper or give to managers to merchandise where they can, but we have to be careful," Read said.
The chain ordered additional stock of Snickers Cruncher, for example, so that managers could fill it in near the Snickers' SKU on the shelf or on the in-and-out display rack, which usually holds candy. Managers generally have a hand in merchandising the rack.
Once in a while, products will be cut into the planogram outside the major reset timetable, but that is a rarity.
"Sometimes we don't have time to wait and see if a product is going to be a big hit or not before it gets shelf space," Read said. "Like low-carb last year. The demand for that kind of product comes and goes quickly. We try to sell through at the store level as best we can and if we can adjust the planogram with one or two items, we send a field force out to do that, without waiting for a year."
Still, juggling priorities is a challenge. "[Hershey's] Take 5 is a good example of something we didn't take advantage of at all," Read said. "We got the first shipper in and couldn't get it on the planogram until a couple months ago. I had to go where my biggest opportunity was at the time for resetting a section and it was in another category. I had only a couple candy items to cut in."
For this reason, Read sometimes wishes the candy manufacturers would bundle introductions of new items or limited editions, making it easier and more cost-efficient to find them a permanent home on the planogram, especially if a scheduled reset had been done recently and was not scheduled for a while.
When manufacturers decide to make a popular limited-edition product a permanent offer, Read said, she isn't always able to cash in on consumer demand as much as she would like to. "Sometimes there is a bigger lag in the time it takes to add it as a permanent item than I'd like. But sometimes the manufacturers aren't ready either. With the Reese's Big Cup, there was a huge lag between when it was first featured and when it was made permanent."
Positioned as tie-in purchases — a ticket builder rather than a traffic builder — candy sales at Wawa grew 20 percent last year. Because new items and limited editions typically bring excitement to the category, Wawa is less likely to discount these products than it has in the past.
"Sometimes to get extra sales on an item, all you need to do is feature it on a shipper," Read said, adding c-store operators in general must be careful not to overprice the category.
Since each Wawa store displays only one candy shipper at a time, selecting the brands with the best potential for the chain is crucial, Read noted. "We do a mix of limited editions, new item introductions — especially for gum, such as Cadbury-Adams buy-one-get-one-free shippers — and, in about half the cases, established brands, like M&Ms," she noted.
"If there is any question in my mind that a limited edition or new item will be a huge hit, or if it doesn't get a good reception in the office, then I pass. I have to be careful that the item will move in the time we've given it in the store.
"Something like Reese's Big Cup, which has some traction already [through the Reese's Peanut Butter Cup], I'd schedule. I look at sales history of comparable items; but some of it is gut feeling."
Gum and chocolate get the lion's share of displays. "Our gum business is on fire right now — some of it due to our resets and some of it due to the new items out now," Read said. "Gum is 30 percent of the category's business and chocolate is 30 percent, so my efforts will go into those categories. Chocolate may be stealing some of the thunder from non-chocolate in terms of exposure and shippers, but that's where the growth is coming from."
There are few exceptions to the one-shipper-at-a-time rule. "We are looking to bring in two of some items in the future, though that won't apply to every store," she said, noting shippers may hold anywhere from 96 to 432 pieces. Read tries to avoid back-to-back shippers featuring one manufacturer's candy or similar items.
Sometimes, candy companies miss their limited-edition or new-item opportunity simply by offering shippers that won't work in Wawa stores. "For a while, there would be only one or two shippers we could use out of the 12 or 15 one major manufacturer offered," she said. "They'd have items we don't carry or items that didn't make sense for us or items we'd already discontinued. Or they were including second- and third-tier items. I had no flexibility with what shippers to go with."
After "cleaning up" the shippers and offering more limited editions, the manufacturer now gets eight or 10 displays on the schedule each year.
Like most retailers, Read's biggest challenge is the sheer number of new items and limited editions she's offered, and removing old SKUs from the planogram to make room for items that have gotten a successful trial. "Every time we planogram for something new, something has to come out. We'd have an item that was chugging along with a steady base, but no longer meets the kinds of hurdles we have now to keep new items coming in."
Though most manufacturers understand the business sense of eliminating their slow-moving items, some get defensive. "It is in their best interests to take out an older product that is selling only three pieces a week, if I can sell 15 of the new one," she said.
Other suggestions for manufacturers: Make sure retailers have enough lead time before the launch of a limited edition, Read said, "and when they come to us with information, they need to understand what it is and speak to it. They can't just print it out of their computer and march in and expect us to lap it up!"
Even if it is chocolate-covered.
Talkin' Trends
Will dark see the light? Will smaller be bigger? We asked Wawa Inc.'s Marie Read to talking about the future of sweets. Here's what she had to say:
"There aren't really any megatrends. All the trends seem to be little ones.
"It looks like dark chocolate definitely is on the rise and there could be a groundswell; it's hard to know. I think dark chocolate's [purported health benefits] will be everybody's excuse to eat chocolate. You can't say no when it's good for you!
"It looks like smaller pieces could be a big opportunity, too. What I'm hearing is people are trying to satisfy cravings with littler pieces of something better [quality].
"Fruit flavors seem to be big, too, especially in gums. That could be an opportunity."