Lollies and sugar confectionery have always been an easy grab-and-go option for people on the move. Whether it is to snack on during a car trip, to fill a bowl at a party or just for the sake of it, the range available and deals on offer at C-stores and continue to be a crucial part of the offering and can have a major impact on up sell within the store.
Despite the constant talk of sugar taxes and the reminders about how unhealthy too much sugar is, those with a sweet tooth just can’t seem to walk away.
According to an industry report from Confectionery News, the 2018 sales outlook of confectionery is ‘healthy’.
“Fears of potential sugar taxes on confectionery and consumer trends for healthier products have not dampened the industry outlook,” the report said.
Confectionery News surveyed over 725 people to put together the report, with respondents hailing from a range of positions with the confectionery industry.
Around half of the respondents said they expect greater export sales in 2018, than they saw in 2017.
Trends and innovation
IRI Worldwide Channel Insights Analyst Mairead McElvanna said: “Confectionery is the 4th largest department in Petrol & Convenience (behind Tobacco, Drinks, and Food-To-Go), but is in decline of -2% vs. last year, equivalent to a $6m category retraction”.
“However, there is some good news around previous innovation: there were over 300 products launched in 2016, which collectively increased their dollar sales by 4% in 2017 (their second year of sale),” he said.
Nestlé Confectionery head of marketing Anna Stewart said Allen’s were currently trialling a reduced sugar Allen’s SKU in its Allen’s Lollysmiths pop-up boutique, ‘Sweet but Sensible’, with 25% less sugar.
One such innovation is a reduction in sugar.
“Nestlé is a signatory to Be Treatwise, and we position lollies as a treat within a consumer’s diet” she said.
“We place the Be Treatwise icon on our confectionery to help explain the place that confectionery has as a treat food, as part of a healthy balanced diet and active lifestyle.
“In addition, we feature visual portion guidance with the Nestlé portion device on back of pack.
“Lollies continue to be an impulsive purchase product with more than 65% of shoppers not planning on purchasing before they walk into store,” she said.
How NPD shapes the market
Corbion, the global market leader in acids and emulsifiers for food and confectionery said that flavour differentiation and a stable product are the crucial factors that determine successful products.
“Different key consumer groups (children, adults, geographical spread) demand new and increasingly extreme flavour profiles of these products.”
Confectionery News said that new product developments are what will drive the industry forward in 2018.
“Consumer loyalty is declining and the market is open to new, innovative, high-quality confectionery products. The choice of acid, buffers and functional ingredients is critical in this process,” it said.
Ms Stewart said this year has seen a continued love for Allen’s classic lollies.
“Last year our Allen’s Green Frogs triumphantly hopped backed into stores with the launch of Frog Family,” she said.
“Allen’s will be launching a number of exciting new products in 2018. In February we will launch the latest addition to our ‘Fruits & Cream’ range.”
Ms Stewart said that currently, Allen’s is the number one market leader in the convenience channel with 99% brand awareness and loyalty significantly higher than any other brand in the category.
(Graph provided by Nestle)
According to the Australasian Association of Convenience Stores (AACS) State of the Industry Report (SOI), due to the relatively small space available in store, the P&C channel can be perceived as restrictive.
“But this can be an advantage for suppliers when it comes to NPD,” it reported.
“Confectionery, and indeed impulse snacks more generally, rely on the “new news” of innovation (mostly flavour rotation) to give consumers reasons to keep coming back and spur incremental spend.”
Showcase the sugar
As previously noted, 65% of sugar confectionary shoppers in C-stores do not plan to make a purchase. With this in mind, it is crucial to ensure that all products are displayed correctly with visible pricing labels, to ensure those 65% of customers have access to their impulse purchases.
Ms Stewart said as lollies are such an impulsive category, putting them in aisles can negatively impact sales performance.
“Medium lolly bags are the biggest sub-segment in both grocery and convenience channels,” she said.
“To maximise sales, place lolly bags on the ‘window run’, which is the way customers walk from going into a store to the front counter.
“For single consumption lines such as Lifesavers, ensure it is on or under the front counter.”
The AACS SOI said the petrol and convenience sector is a good place to expose customers to NPD in “dedicated zones”.
“New products are more easily noticed within smaller in-store environments,” it reported.
“Leveraging the inherent easy browsing advantage of smaller scale P&C stores, BP has been using end-of-aisle gondolas to draw attention to the newly introduced products.”
Global appeal
Increasingly, more and more C-stores and companies are realising that consumers don’t always want the ordinary, and that sometimes having options from around the world is the way to.
Khaled Magableh of the Queen Street Ezymart in Melbourne, saw the appeal of importing confectionery from various parts of the world to draw customers in.
The store – which is open 24 hours a day, seven days a week is staffed by four full timers and two casuals. It has been designed in such a way that the first thing that greets customers is a dizzying array of confectionery from nearly all corners of the world. There are lollies and chocolates from places including the UK, United States, Switzerland, Germany, Belgium, New Zealand and South Africa.
“We put on a great display at the front and really try to draw customers in with our lollies and chocolate,” said Mr Magableh.
“We have some things that customers have never seen before and we have had customers come in and buy the whole shelf full of goods because they say they don’t know when they will get the chance to get that particular product again.”
Having enticed new customers into the store to perhaps make an impulse purchase they hadn’t planned on, EzyMart is keen to ensure that they buy something more than a lolly or two.
Lollies and sugar confectionary have proved to be a good option for retailers to get extra sales from customers. Putting products on sale and making them easy to access and purchase is a great way to boost sales. Continued innovation ensures that there is almost always something new for consumers to taste and try, knowing your customer and the current trends will be of great benefit to any C-store.