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Candy Still Dandy
Seasonal candy is bigger than ever. Take last year, for instance.
"The four big candy seasons (Valentine's Day, Easter, Halloween and the end-of-year holidays) showed solid performance in 2013," affirms Jenn Ellek, senior director, trade marketing and communications at the Washington, D.C.-based National Confectioners Association (NCA). "With stronger collaborative planning, promotions and improvements in in-store execution, the industry and retailers maximized the power of confections during the seasons. Excluding gum, because it performs little seasonally, the year's seasonal growth was 3.2 percent, with Halloween showing the strongest gains, at 5.2 percent growth."
Even Valentine's Day, which, as in past years, logged the lowest growth in 2013, still increased by 1.9 percent, she points out.
The reason for this, according to Ellek is deliciously simple. "Candy continues to be an integral part of celebrating special occasions," she observes. "For example, 81 percent of shoppers say they share or gift Easter confections some or most years. Likewise, 87 percent of parents buy or create Easter baskets for their children, of which 83 percent include candy. The numbers for Halloween, Christmas and Valentine's Day are even higher. In general, eight in 10 shoppers say they like buying seasonal chocolate and candy to share with others."
Also, shoppers' preferred brands unsurprisingly take center stage during the holidays. "When buying seasonal candy, shoppers often purchase their own favorites: 69 percent of shoppers say their preference has very much influence on the ultimate purchase," notes Ellek, citing NCA's "Sweet Insights" research. "In addition to buying products of their own liking, they do keep an eye on price (38.8 percent say price has very much influence) and take family preferences into consideration (32.6 percent)."
In terms of new product introductions, Ellek notes that they depend on the holiday. "In general, seasonal chocolate has done very well in the past year across the four big holidays," she says. "For example, across channels, retailers added 4.6 additional Easter seasonal chocolate items, and the relationship between new assortment and sales is very evident, with Easter dollar sales up 12.5 percent in seasonal chocolate. Likewise, retailers added nine seasonal items for Halloween, with strong added dollar sales as a result."
These products are now more often being promoted in the digital arena. "We increasingly see an omni-channel outreach integrating pre-trip and in-store solutions to steer the ultimate purchase," asserts Ellek. "This includes the all-important paper circular, but also social media. Retailers leveraged Facebook and Twitter particularly during Halloween, both in volume and quality of the ads featuring pictures, contests and recipes. Retailers increasingly focused on seasonal promotions during 2013, with the seasonal share of ads at 68.5 percent. For example, of all confectionery ads in 2013, 15.7 percent were related to Valentine's Day. When doing the same for Easter, Halloween and the winter holidays, we are left with 31.5 percent of total ads that are not related to the seasons, meaning more than two-thirds of the ads are seasonal."
Even as retailers tout their seasonal offerings in-store and online, Ellek cautions them not to neglect the candy category during the rest of the year. "While our seasons are crucially important to the category, it is important to continue to support everyday sales as well," she advises. "In fact, leveraging the store's positioning as the destination for seasonal candy helps grow everyday sales. This is true for both merchandising and ad support."
Season of Profits
How can grocers make sure their seasonal candy offerings sell well?
"It's always a challenge for retailers to determine the optimal seasonal confectionery mix per store," admits Susan Gwinnett-Smith, VP of grocery/retail for Mars Chocolate North America, in Hackettstown, N.J. "To help, Mars Chocolate offers an innovative forecasting tool, called Seasonal Architect. It simplifies decision-making by enabling superior forecasting efforts during key promotional timeframes such as Halloween, the holidays, Valentine's Day and Easter."
"Mars' Seasonal Architect helps retailers maximize profitability across four key areas," notes Gwinnett-Smith: "1. Identify stores and items with out-of-stock issues; 2. Determine root cause of out-of-stock issues; 3. Recommend tactics to maximize seasonal sell-through, and 4. Estimate the total opportunity through mix optimization."
By ensuring that grocers stay in stock throughout the entire season, "Seasonal Architect aims to keep … consumers [from being] discouraged when they can't find the brand they are looking for," she explains. "This tool helps retailers by selling more confections during the season, not after the season ends."
Mars isn't the only candy manufacturer that offers a tool to help supermarkets with their seasonal sales. "We use the Hershey Navigator to write our seasonal orders, using each store's individual scan sales data from last year, sell-through by item and any competitive impacts that may influence their order this year," says Jeff Hancock, category manager at Itasca, Ill.-based Jewel-Osco, which operates 185 locations in three Midwest states. "We review the order four to five times before we finalize it."
The New Old-fashioned Way
When it comes to emerging trends in seasonal candy, as far as Jewel-Osco Category Manager Jeff Hancock is concerned, everything old is new again.
"Peppermint items for Christmas sold very well last year, [so] look [for them] to increase this year," he predicts. "From chocolates with peppermint to peppermint kisses to crushed peppermint for baking, there is big demand."
Additionally, holiday sentiment will remain a major factor in the purchase of seasonal candy. "Nostalgic items always do well and continue to grow sales, especially around Christmastime," he explains. "They bring back childhood memories!"
Further, according to Hancock, good taste -- in every sense of the term -- never goes out of style. "Quality chocolates for gift giving (Christmas, Valentine's) continue to increase in sales for every holiday," he observes. "Customers are willing to pay more for a quality-look piece (packaging) and quality-tasting item."
In the realm of licensed candy, Louisville, Ky.-based CandyRific, which sells candy and novelty product combinations employing popular licensed brands, has plenty on tap for the upcoming holidays, including a Mickey & Minnie Safety Light with Candy for Halloween, an M&M's Brand Light & Sound Christmas Tree and "The Elf on the Shelf"-themed offerings for Yuletide, and a Disney Best Friends Heart Keychain with Candy for Valentine’s Day.
According to CandyRific President Rob Auerbach, interest in the licensed candy segment around the holidays is higher than ever. "There is more emphasis on seasonal candy from retailers, [as well as] more opportunities for consumers," he notes. "For CandyRific, it has been strong because of our offerings and strong properties."
In fact, adds Auerbach: "We see a continuing trend for buyers to emphasize seasonal more and everyday less when it comes to license properties and topical offerings. Something is not special if it's available every day."
Among its upcoming Easter 2015 products, the R.M. Palmer Co., based in West Reading, Pa., will offer the new "Color Me Cottontail" item, for which the candy manufacturer teamed with Forks Township, Pa.-based Crayola.
With the three included Crayola Crayons, "[c]hildren of all ages will have lots of fun coloring and completing the design on the box," according to Palmer. "Only part of the box design is in full color . . . the other part is waiting to be colored!"
The box will also contain a hollow chocolate-flavored rabbit with decorated eyes and ears, and an Easter basket. The SRP for the 2.25-ounce item will be $2.
Holidays in a Bag
When it comes to the current seasonal candy trend of combining the tried-and-true with the truly innovative in one delicious package, the ultimate example may be Jelly Belly Candy Co.'s resurrection of five seasonal jelly bean flavors -- Pumpkin Pie, Cranberry Sauce, Hot Chocolate, Egg Nog and Candy Cane -- for a limited time in a 7.5-ounce laydown bag, marking the first time these flavors will be packaged and available together.
Scheduled to ship this month in 12-count cases, the item "appeals to a wide range of shoppers with seasonal treats that will carry stores through from fall to winter," according to the Fairfield, Calif.-based company.