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Three ways COVID-19 is influencing consumers’ confectionery buying

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The confectionery industry is facing a once-in-a-lifetime period of uncertainty, as it is not immune to the pressures brought on by the COVID-19 pandemic. Consumers’ candy buying behaviour is reflecting heightened price sensitivity on one hand and, on the other, desiring moments of comfort and escapism.

This is something convenience store retailers need to understand and respond to — be it by offering experimental flavors that encourage affordable moments of indulgence, or offering traditional flavors that remind people of simpler times.

A recent webinar entitled “Seasonal Candy in the Time of COVID-19,” hosted by Candy Industry Magazine and sponsored by Cargill and Ferrera Candy Co., explored how the confectionery industry will likely be impacted by the ongoing coronavirus crisis, and what effect it will have on consumers’ attitudes, behaviours and shopping habits.

“I think it’s fair to say that events of the last couple of months have hit the industry hard and forced a lot of companies to reevaluate their strategies,” said presenter Mike Hughes, director of insights for FMCG Gurus, a global market intelligence agency that specializes in consumer, category, packaging and product insight analyses.

Customarily, consumers’ confectionery consumption habits change on a seasonal basis. According to a recent FMCG Gurus survey of 2,000 consumers in the U.S., 94% of respondents said they purchase confectionery products, with 58% expressing that their buying habits change throughout the different seasons of the year: 64% said, though, that these habits will change now as a result of COVID-19.

“What this means is that consumers will be driven by risk of items; they will be less willing to purchase items they don’t know about; and they may be less willing to try experimental flavors and turn to tried-and-true flavors for comfort,” said Hughes. “FMCG Gurus predicts this will drive sales of traditional flavors, so how these products are marketed will be crucial.”

According to additional findings from the survey, consumers say they are most likely to:

  • Seek out experiential flavors when buying confectionery in the spring;
  • Seek out traditional flavors when buying confectionery in the winter; and
  • Be most willing to trade up to premium products when buying confectionery in the fall.

ADAPTING TO A NEW NORMAL

Now more than ever, consumers are facing uncertainty about everyday life, such as the state of the economy and long-term job security; food safety and the origin of products; the adverse effects of restrictions on physical and mental health; and concerns about contracting the virus, as well as the safety of their loved ones.

Survey respondents admit that COVID-19 is going to have an impact on their confectionery buying habits. FMCG Gurus has identified three key areas of impact:

  1. The Experience

As the coronavirus creates a scenario whereby consumers are simultaneously concerned about their health and their ability to handle everyday living costs, they will desire moments of non-essential indulgences for escapism reasons. This will be driven by increased feelings of anxiety and stress.

“As consumers trade down on foodservice occasions such as trips to restaurants and bars, they’ll be looking to replicate consumption experiences in the comfort of their own home,” Hughes explained. “This will drive demand for bulk and shareable products, as well as indulgent and premium products.”

According to the survey, 51% of consumers say they will trade-up on confectionery to compensate for reduced expenditure elsewhere, and 52% say they will seek confectionery products suitable for “big nights in.”

Additionally, in the last month, 79% said they purchased more comfort food such as ice cream and confectionery: 40% said they purchased more chocolate as a result of COVID-19, while 28% said they purchased more sugar confectionery.

  1. Back to Basics & Risk Avoidance

Consumers will turn to nostalgic products that remind them of the past and simpler times, driving a demand for traditional flavours that offer moments of comfort.

In turn, 60% of survey respondents said they will be more likely to seek out confectionery products they know and trust, and 41% said they will be more likely to seek out confectionery products that remind them of the past.

According to FMCG Guru’s findings, consumers today are also demonstrating ethnocentric attitudes with favourable perceptions of homegrown brands that practice values and policies that closely align with their views: 58% of consumers said they will be more conscious about purchasing new types of confectionery.

“Consumers will be more price-sensitive when it comes to confectionery or looking to trade down. However, they will be more risk-adverse, seeking out products that they know and trust and that offer comfort,” Hughes noted.

  1. Maximized & Defined Value

Consumers are willing to shop multiple places to get what they want. With stay-at-home orders in place, they are already utilizing multiple channels and showing less value to brand loyalty in this time of uncertainty.

However, they aren’t searching for the cheapest price possible; instead, they are focusing on retailers and products that offer the maximum value and meet their need states, according to Hughes.

More information on the “Seasonal Candy in the Time of COVID-19” webinar is available here. Originally posted at Convenience Store News in the U.S.


BROOKLYN-BORN-CHOCOLATE-300x300

Premium-style chocolate is helping give confectionery chocolate sales a boost

Who doesn’t love chocolate? Nielsen data shows confectionery chocolate is a nearly $1.84-billion business in Canada—growing 4% over last year. Analysts partly attribute the recent growth in sales to the rise of indulgent, premium-style chocolate. From organic and fair trade to vegan and keto-friendly, here are just a few of the chocolate innovations to hit the marketplace.

brooklyn-born-chocolateBROOKLYN BORN CHOCOLATE
Initially a private-label chocolate manufacturer, Brooklyn Born Chocolate now has its own branded premium product line, which includes a new Keto Bar line. These keto-friendly bars are low in carbs, so followers of the keto diet can indulge in them without guilt. Flavours in the Keto Bar lineup include Coconut Milk, Himalayan Sea Salt, Lemon Coffee, Mint Cacao Nibs, and Salted Almonds.

THEOBROMA
Theobroma’s new milk chocolate sticks come in three varieties: Organic Milk Chocolate with Quinoa Crisp and Coconut; Organic Milk Chocolate with Quinoa Crisp and Moka; and Organic Milk Chocolate with Quinoa Crisp and Salted Caramel. All of the Quebec company’s premium chocolate confections are fair trade and organic, as well as gluten free and GMO free.

GALERIE AU CHOCOLAT
Quebec-based Galerie au Chocolat has three new bars in its fair trade line: Dark Chocolate (72%) with Coconut; Milk Chocolate (36%) with Almond and Sea Salt; and Milk Chocolate (36%) Caramel Pecan Crunch. Galerie au Chocolat’s fair trade line features fine Belgian chocolate in simple, no-nonsense packaging that reflects the simplicity of the product: the company doesn’t add oils, emulsifiers, preservatives, flavours or anything artificial.

camino_3d-image_fba8003-coconut-milk-80gCAMINO
Camino’s Coconut Milk Dark Chocolate Bar is a rich and creamy bar that contains no dairy milk or cane sugar; instead, it uses coconut milk and coconut sugar to create this milky smooth, indulgent treat. The Ottawa-based brand’s new vegan-friendly bar is 55% cacao, and is certified fair trade, organic, kosher, and gluten free.

Originally posted at Canadian Grocer. 


4 strategies for delivering a more experiential confectionery shopping experience

unnamed-1Like all things retail these days, the confectionery shopping experience is in flux. New technology and the rise of e-commerce is shifting the way shoppers behave, as they’re now looking for a more experiential confectionery shopping experience.

“The in-store experience now has to offer a holistic approach that incorporates this shift and creates a cohesive shopping experience. This can come to life in a lot of ways for retailers,” said Jim Dodge, vice president of convenience at Mars Wrigley Confectionery.

For example, although it’s still a highly impulsive category, there is an opportunity to help products become planned purchases, making it from the aisle to the basket by connecting online communications with those in stores, Dodge explained.

“This is done by matching external promotions, such as web banners, with the internal merchandising experience,” he said.

Millennials are the driving force behind the confectionery shopping shift, and this generation is embracing the small format of the convenience channel now more than ever. C-stores stocking unique flavors, textures and pack types are helping meet the needs of this generation.

“In addition to product mix, incorporating unique fixtures and signage is improving the c-store experience and increasing shopper engagement with the category,” McLane Co. Inc. Confection Category Manager Kraig Morrison advised. “New technology and increased services are also evolving the shopper experience. For example, e-commerce and delivery are a couple of the future driving forces of the c-store shopping experience.”

As consumers’ confectionery shopping expectations continue to evolve, it’s becoming increasingly important for c-store retailers to provide a seamless, integrated experience.

Here are four recommendations from confectionery category experts on how to win more sales.

  1. Merchandising

The best planograming strategy for confection places the top-performing items and brands in the area of the setwith the highest visual penetration rate, also known as the “strike zone.”

Positioning top items within the strike zone not only optimizes the placement of the best items in the set, but it also allows for king and standard pack types to be blocked separately, making the aisle more shoppable, according to Morrison.

“Grouping pack types helps to put king-size, standard and non-chocolate in their own prominent locations. With 32% of consumers only looking for king and

29% only looking for standard, creating their own blocks allows the planogram to cater to each customer’s need state,” he said.

Mars Wrigley Confectionery recently conducted a global, multi-month survey to understand what influences shopper purchasing decisions and developed a few key strategies:

  • Carry a balanced assortment of gum, mints, fruity confections and chocolate to meet the shoppers’ needs and drive sales.
  • Reorganize products based on what motivates shoppers to purchase certain items. For example, pack type is the top purchase driver for fruity confections, while brand

name is the top purchase driver for chocolate.

The candy aisle has traditionally been where shoppers seek confection, and 64% of confection purchases still originate from this primary location.

However, the candy aisle has earned a reputation as being one of the most difficult areas of the store to shop.

“Optimizing the candy aisle and arranging the planogram to place the products the shopper most often seeks in the ‘strike zone’ can decrease product search time by

50% and yield a 4-percent to 6-percent increase in sales,” noted Alan Tobin, director of category management, convenience channel, at The Hershey Co.

This strategy ensures that the strike zone is reserved for only the very best items, which should include all sizes. Getting the merchandising strategy right in the primary location is key to success in the confectionery category.

“If shoppers are unable to locate an item they desire immediately, they will walk away from the category completely,” Tobin acknowledged.

Core-Mark International Inc.’s Michael Caporusso, director of marketing and category management, shared a similar sentiment:

“One of the barriers to the category is wrong pricing and another is if the candy aisle has low visibility, so prioritize the placement of products.”

However, retailers must also be cognizant that the candy category is driven by brand and innovation. “Shoppers are looking for specific brands, but they’re also looking to indulge in what they haven’t eaten before,” said Caporusso. “It’s a contradictory experience, but for a c-store retailer to provide convenience, you have to have both experiences.”

  1. Signage

The average time spent in a convenience store is only two minutes and 42 seconds. And of this short period of time, only 18 seconds are spent in-aisle.

“Signage helps the shopper navigate the store and directs the shopper through the aisle to make the most of this valuable time. Good examples are window and

pumptopper signage to help drive shoppers into the store,” said Morrison.

Mars Wrigley Confectionery’s Dodge agrees with this strategy and recommends retailers leverage a mix of in-store and out-of-store signage by advertising power brands on the lot during key holidays and leveraging pumptoppers and gas TV ads to promote high-margin basket builder categories, like confection.

  1. Promotions

Promotional effectiveness is becoming more of a must have to generate gains year over year.

The anticipated lift in sales that the “right price” will trigger, combined with the successful application of marketing, has to accomplish the goal of producing more net profit at the reduced price for the period of time. According to McLane’s Morrison, two-for pricing is one of the most successful drivers in candy, leading to the “win-win-win result.”

“The shopper recognizes the value of a 2/$2 or 2/$3 offer for multiple products and, at the same time, the retailer and the manufacturer are gaining sales and penny profit gains with the larger basket rings,” he said, adding that fountain drink bundling is another successful driver.

  1. Last Interruptions

Aside from the candy aisle, counter unit displays, under the counter and queue lines are critical secondary purchase points for confectionery, as shoppers approach the pay point from these different vantage points. It’s important for c-stores to maximize checkout given the brief time customers spend in the store.

With that in mind, Dodge has these three final tips for c-store operators:

  • Redesign the checkout by using large-footprint and ground-up builds, as well as register toppers that feature power categories and power brands.
  • Make sure products are easy to shop and well organized around the checkout. If shoppers can easily locate impulse products, they are more likely to add them to their basket.
  • Provide a variety of product choices to satisfy different shoppers’ end-of-trip needs.

Originally published at Convenience Store News.