Candy: Retailer Perspective 2014
Q&A with Chris Smyly of Pester Marketing Co.
Q. Pester’s Alta stores vary in size and geography. How does this variety come into play for the candy set?
A. If we look at our top 20 candy SKUs, we’ve got a Pearson’s Nut Roll in there. We sell a lot of it. You scratch your head because that’s not supposed to be there, according to the (national) data. We try to focus on those trends but also try to remember who we are and what sells in our stores.
Q. In some stores, you replaced a traditional multivendor candy endcap with a custom-made themed endcap designed to look like Willy Wonka’s factory. What led you to that idea?
A. We had a very traditional rack with all of the top 75 candy SKUs on it. We constantly threw candy away from that rack, and it was right in the front of the store. So we partnered with Nestlé and our broker and created this new endcap for 31 stores. It’s been incredibly successful for us. It allowed us to get three contracts with all three of the major companies: Mars, Hershey, Nestlé. Our sales for Nestlé are up 177% overall and 350% for the stores that have this rack. We use the very bottom of the rack to bring in new products and test things. We’ve also moved into some novelty candies we weren’t able to do before. Kids run straight to the rack. We even had a school that took the endcap, put it on a float and marched it down the street on a trailer because they were doing a Willy Wonka theme.
Q. Your set also shows off a big selection of bagged candy. Why?
A. We see opportunity in bagged candy, especially in the rural stores where they’re next to the highway. Bagged candy has a place, especially if you have kids on a trip and you’ve got five hours in a car. We’re always taking a look at it. Do those SKUs move? Is that the right mix? We rationalize our SKUs twice a year and do resets. If it doesn’t move, it doesn’t stay.
Q. You have a proprietary bagged-candy program as well. Tell us more.
A. At one point we had 40 SKUs, but we were having major supply-chain issues so we scaled it back. We have 14 flavors now. Anything proprietary, especially for a midsize chain like ours, can be very difficult. But we like our Alta name to be out there as much as we can. I feel like we’re able to work a better deal on our cost and our retail by doing it with our name and our brand. Some other pre-bagged companies are pre-priced. You can’t control your retail. You can’t control your margins. I control all of it and it’s worked out well for us. Two of the top 25 SKUs we sell are Alta bagged candy.
Q. What are some other candy trends that have been successful for you?
A. We’ve seen a big bump in king-size candy bars just like everyone has. We’ve stopped promoting standard-size candy bars and now we only do two-fors on king-size. I also love what the candy companies such as Mars have done in talking about “sharing size.” Reese’s Minis and Snickers Bites are positive trends, too.
Q. Where are you seeing weakness?
A. We had a terrible year with gum last year. For the first time in a very long time, we adjusted our set to ebb and flow. Gum and mints had always had this space. We broke out of that mold and said they don’t deserve that, much to the chagrin of the gum companies. We took space away and gave it to king and sharing size. Sometime, the gum will come back, and we’ll ebb and flow back.
Q. How do you handle seasonal candy?
A. We have a place for them. They go into the stores that have the rack and fixtures for them. And then we’re in and out. We don’t do 5,000 cases of Cadbury eggs. We get in, we get out and we move onto the next thing.
Chris Smyly is director of marketing, Pester Marketing Co., Greenwood, Colo., 58 stores.