2012 Category Breakdown, Part 3: Candy & Snacks
More-frequent reviews driving stronger sales for retailers
[Editor's Note: In its second-annual category review, CSP takes a look at first-half 2012 sales data to determine how the industry is performing so far this year. In this five-part CSP Daily Newsseries, we look at four major categories. For the complete report, see the September issue of CSP magazine.]
OAK BROOK, Ill. -- The growing popularity of foodservice appears to be buoying snack sales, with multiple subcategories achieving double-digit growth. The three subcategories with the largest dollar sales--potato chips, tortilla/tostada chips and other salted snacks (no nuts)--all showed increases ranging from 12% to 14%.
For John Strickland Jr. of Wayne Oil Co. Inc., Goldsboro, N.C., what he calls his "grocery" section, which includes packaged snacks and chips, are "holding up very well." He and his team recently reviewed that category and decided they could improve. They did what he called a "radical" makeover in terms of SKU mix and pricing, while still managing to maintain margins. The effort helped, with Strickland describing the category as a "bright spot" for 2012.
Meanwhile, the candy category has been difficult for retailer John West of Alon Brands, Dallas. He told CSP Daily News the price of raw ingredients has been pushing prices up, with his response being to price lower to eliminate the differential between the c-store and competing channels. But to zig after a zag, West has been pushing volume by doing two-for-three promotions in king-size products. "Business is picking up," he said.
A revelation that he had this year was with seasonal displays and candy. Recent Halloweens have shown lackluster performances with candy; however, this past Easter, he and his team saw a 90% sell-through of items.
Because of their potential, he says the snack and candy sets are now coming under more frequent review, potentially going from once a year to once every other month.
The darker spot within the candy segment is sugarless gum, according to SymphonyIRI numbers. Both dollar and unit sales are down slightly.