Snacks & Candy

Candy: Nonchocolate Reigns

Retailers see success with gummies and other sweet and sour treats, as well as large-size chocolates
Illustration by CSP Staff

CHICAGO — Candy inspires delight in kids and adults alike. The challenge is translating that innate joy to sales.

“It’s all about the experience,” says Tim Young, category manager of snacks, candy and edible grocery for Newcomb Oil’s Five Star Food Marts, Bardstown, Ky. “As a parent, when you’re going to the convenience store … and the kids go in there and they pick something up—for me, that’s always a great time.”

To that end, Young and the team at Five Star are expanding their assortment of novelty candies designed to surprise and delight kids, including stand-up pouches for gummies. “Those seem to be doing really well,” says Young.

Data from McLane reflects Young’s experience. The Temple, Texas-based distributor reported an 8.5% year-over-year increase in units of stand-up pouch candy shipped in 2019.

*Click here to view candy sales data.

Novelty candy overall performed much better in 2019 than the year prior, according to IRI. C-store industry unit sales fell by 1.4% in the 52 weeks ending Dec. 29, 2019, as opposed to the 2.2% decline in 2018. Dollar sales in 2019 rose nearly 5%, compared to a 0.8% increase the year prior.

Volume Sales Off

Among the four main candy categories—nonchocolate, chocolate, mints and gum—“the highest growth has been coming out of the nonchocolate candy,” says Nati Rezene, director of center store and category management for Core-Mark, Westlake, Texas.

Every segment of candy saw its percentage of unit sales shrink in 2019, but nonchocolate candy experienced the smallest decline, off only 1.2% in the 52 weeks ending Dec. 29, 2019, according to IRI. Dollar sales of nonchocolate candy rose 4%.

Core-Mark is giving nonchocolate candy more of its own real estate because of its stronger performance. “Last year, we tested three of our divisions to get a separate rack program that just features nonchocolate candy, and we are able to see a tremendous growth—enough so that we can roll it out to all divisions,” Rezene says.

Notable examples of unit sale growth in nonchocolate include Haribo Gold Bear Assorted packs, which increased unit sales by 6.8% in fourth-quarter 2019, and Airheads Xtremes Sour Rainbow Berry, which saw a more than 10% increase in unit sales, according to IRI. They represent the continued strength of gummy and sour candy, which has helped lift sales growth for chewy and novelty candy higher than the rest of the category. Sales dollars for both categories increased by 4.9%.

Similarly, data from McLane indicates nonchocolate’s growth in 2019 is driven by chewy and sour bagged candy. “Successful retailers are allocating more space to bagged candy,” says Spencer Webb, category manager for McLane Co., Temple, Texas. “Generally speaking, more SKUs is not always the answer you need to have the correct mix of core items and innovate new items. I feel that the successful retailers have capitalized on effective SKU mixes and space allocation with in the bag candy segment.”

Webb says the prominence of chewy and sour bagged candy can be pegged on millennials. “The millennial does not spend the most on candy as comparted to Gen X and baby boomers, but they are the largest generation and they have very different tastes,” he says. “Having the right product mix of chewy and sour bagged candy is the key to converting the millennial consumer as they place more value on experience.”

Patsy Varpula, pricebook manager for Fabulous Freddy’s Car Wash, Las Vegas, says spicy flavors are helping lift both her stores’ sales of nonchocolate and chocolate candy. Recent hits include Jalapeno Nut M&M’s and cayenne pepper-laced Warheads Hotheads worms. Varpula believes providing interesting but popular items helps Fabulous Freddy’s compete.

“In the day and age that one can get things almost instantaneously through online ordering, the impulse decisions are even more important,” she says.

King-Sized Opportunity

Despite the success of nonchocolate, chocolate sales still represent a large segment of the candy category, Rezene says. “This past year has been a great year of growth for nonchocolate candy, with continued growth in share-size bars and a small decline in standard size bars,” she says.

Data from IRI shows that c-store unit sales of chocolate candy less than 3.5 ounces—which includes most standard-size bars—fell 3.4% in 2019, while chocolate greater than 3.5 ounces declined only 1.3%.

The difference can be illustrated in comparing Hershey bars. While unit sales for the bar have grown in both size categories, unit sale growth for candy larger than 3.5 ounces is far greater, at 17.2% year over year. Meanwhile, candy less than 3.5 ounces grew unit sales by 3.7%.

In response, retailers are doubling down on king-size chocolate bars to some success, says Rezene.

“Having the right product mix of chewy and sour bagged candy is the key to converting the millennial consumer."

“We’re seeing a big decline within the standard-size bars and an increase in the king-size, even with the price increase we saw back in late summer to fall 2019,” Rezene says. “We’re trying to play around with the spacing and placements of standard bars to better enhance and improve that performance.”

King-size options are popular beyond c-stores, Rezene says. “We are seeing a lot of movement within the [larger] size options—not just within c-stores but within Walmart and Target, where they are dedicating 4-foot sections to share sizes and party sizes,” she says.

Core-Mark is experimenting with displaying large package sizes of candy in a more customizable and shareable fashion in its Center of Excellence facility in Westlake, Texas.

“We’ve also added the share-size bags as an option for [retailers] to be able to feature, and the extra-large bars, which are normally a more novelty option but are becoming more common,” Rezene says.

Childlike Glee

When it comes to inspiring childlike glee for candy, Rezene points to the power of big data. “Make sure you utilize and lean on data a lot more than just allowing the bigger guys to hog up the space. Data speaks,” she says. “Retailers must identify the space they want to allocate for each category, and within that space allow 20% of the assortment to dictate 80% of the sales, not necessarily the same candy version within eight different packages.”

Promotional partnerships can capture the innate magic of candy, especially promotions that energize employees, says Kelley Gutierrez, category manager of candy and snacks for MAPCO Express, Franklin, Tenn.

“We had employee incentives on a sales contest internally with our store teams. We did a really great job in moving these Snickers standard bars,” says Gutierrez, referring to a 2019 Snickers promo the chain executed in coordination with Mars Wrigley. “We had a wonderful promotion with them that raised a lot of morale within our stores and got people really excited about candy.”

Promotions also offer an opportunity to make customers feel like they’re getting “first dibs” on the newest candy, Gutierrez says. “That’s probably the best part of the job: being able to see what’s new before everyone else and then deciding how it fits in to serve our guests within our stores,” she says.

Many candy promotions and new products are nationwide events that can easily turn into a cultural phenomenon, and c-stores can play into that shared experience. “Our guests that come in to shop our store get to be a part of that,” Gutierrez says.

—Additional reporting by Steve Dwyer, Erik Martin and Hannah Prokop

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