With consumers on the hunt for healthier snacks and a sugar backlash gaining ground, Kum & Go Convenience Stores took a new approach to confections at the checkout counter.
Rather than abandon candy at the front end stores, as some retailers have done, Kum & Go is promoting it in union with a healthful snack. This marriage of opposites in a “two-for” deal lets customers decide if they want good for you, just good or a mix of both.
“There are absolutely people out there looking for that healthier option, and we really want to make sure we have those available,” says Stephanie Poitry, category manager for West Des Moines, Iowa-based Kum & Go. “Some retailers are taking candy off their front end. That’s making a choice for consumers. We want them to have that option. If they want the healthier choice, we have that available as well.”
The retailer launched the deal in January with two-sided grab-and-go baskets at the registers. One side held Clif bars; the other, candy bars. At first, customers tended to choose either two candy bars or two Clif bars. The second month’s promotion—Mars’ Combos with a standard-size candy bar—saw more mixing and matching.
“It was successful in the fact that we had that opportunity to get that healthier item on the counter; in the past, we didn’t have a place to put it,” Poitry says.
Stand-Up Offer
Kum & Go operates nearly 440 stores in 11 states. When it comes to candy, targeting the core Kum & Go consumer often means bundle promotions between key candy items and packaged beverages shown in a high frequency of purchases together.
Poitry uses internal and external scan data to drive the majority of decision making for the category. With new items, she examines trend data of similar items or goes with her intuition as a veteran of the category.
She also has looked to drug and mass retailers for inspiration on confection products that might typically fall outside of the convenience channel. In particular, Kum & Go is finding success with stand-up pouches of multiserve items. At first the company started with king-size Reese’s Minis. As the hand-to-mouth segment jumped to the forefront in the c-store channel, Kum & Go expanded into extra-large candy bars and added stand-up pouches.
“They really took off ,” Poitry says. “We’re actually decreasing some of our theater boxes and smaller multiserves and replacing them with the larger, higher-price-point bags. They are doing very well for us.”
While most of the current offering in the larger stand-up bags is chocolate, she expects to expand the offer with nonchocolate stand-up products.
Price For Everything
For Kum & Go, one of the best new products in the past 18 months was Nestlé Butterfinger Cups. Poitry would like to see more new candy products launched in the convenience channel first. For example, when Butterfinger Cups launched, she found big displays of the product at grocery stores. The c-stores, however, were out of stock.
“They weren’t shipping as consistently to convenience,” she says. “That’s just one example, but it happens frequently.”
Perhaps more than any other trend, rising candy prices are expected to affect the category this year in c-stores. Price increases last summer by manufacturers are likely to drive dollar growth in the candy category for c-stores in the first half of this year. But unit sales will likely see only slight growth, even with promotional activity, she says.
“Although there is a theory that the confections category is not challenged by trends of the economy, I believe that the value proposition of single and king-size bars is at risk as retail prices continue to increase,” she says.
The increases, which ranged from 10% to 12%, have narrowed the price gap between single and king-size candy, making it more difficult for retailers to find attractive promotional price points.
“It used to be you could sell a single candy bar for $1. That is a really, really challenging price point to hit now,” Poitry says. “It does not look as attractive to sell something for $1.09 as it does $1.”
With king-size, Kum & Go kept its retail prices below $2, despite the increased candy costs. “So it has actually taken away from margin to maintain that price point,” she says. “To try and balance that, we’ve made our promotions not as deep.”
While gum sales continued to decline nationally in c-stores last year, Kum & Go saw growth in the gum segment, and it continues to perform well. The success, Poitry says, stems from a decision two years ago to remove a third of the space dedicated to gum in stores. All the varieties and line extensions in gum may have diluted the category.
“We kind of right-sized our candy section. Because gum continued to decline and king-sized continued to grow, it made sense. By doing that and eliminating some of those options, it actually grew gum,” she says.
Stride Sour Patch Kids gum has proven to be a favorite with Kum & Go customers in the gum category. Poitry expects new Starburst gum to perform well, too: “It combines that brand name with gum, which I think will lead to some success.”
Better for You and Me
Poitry believes the trend toward better-for-you options at snack time isn’t necessarily bad for candy sales. Again, she returns to the word that marks Kum & Go’s promotional approach: balanced.
“The consumer today I don’t think is ‘all healthy,’ ” says Poitry. “If they have a candy bar, then maybe they don’t have dessert with dinner, or something like that. But I think they still like those indulgences.”
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