Spotlight on Candy and Chocolate

Unlike meal staples and other household necessities, candy and chocolate generally are excluded from consumers’ shopping lists. Outside of planned holiday purchase occasions such as Easter and Halloween, consumers often purchase candy and chocolate only on impulse.

That said, dollar sales of candy and chocolate continue to grow. According to global market research firm Mintel, U.S. chocolate confectionery sales increased 24 percent between 2008 and 2013. And sales within the sugar confectionery category jumped by 21 percent between 2009 and 2014, Mintel says.

Still, smart merchandising efforts can go a long way to ensure continued growth when it comes to both planned and impulse purchase occasions. And these efforts are critical for store brand candy and chocolate products if retailers want to make them stand out among the sea of national brand offerings.

To see what retailers are doing well and not so well here, we visited three drugstores: a CVS/pharmacy store in Mundelein, Ill., operated by Woonsocket, R.I.-based CVS Health; a Walgreens store in Vernon Hills, Ill., operated by Deerfield, Ill.-based Walgreen Co.; and a Rite Aid store in Toledo, Ohio, operated by Camp Hill, Pa.-based Rite Aid Corp. Our visits to the CVS/pharmacy and Walgreens stores took place on a Friday morning in mid-April, while our visit to Rite Aid took place on a Sunday morning in mid-April.

CVS/pharmacy

General observations: The candy and chocolate aisles in the CVS/pharmacy store are located in the front of the store (looking into the store from the front entrance); they are the first two short aisles on the right-hand side of the store, parallel to the cashier station. The first aisle houses all candy and chocolate products (facing the front of the store), while the second aisle houses snack items and some chocolate products.

We saw store brand candy and chocolate items sold under the Gold Emblem brand, as well as some confectionery-containing trail mixes sold under the Gold Emblem Abound brand.

Foot traffic was very light during our mid-morning visit, although the store was getting busier as we were heading out the door. The store was very neat and clean, and most of the shelves were well-stocked.

The upside:

• ■ The store gives its large assortment of Gold Emblem pegged candy (in red bags and blue bags) prime placement: The large block of store brand items in the first (front-facing) aisle was the first thing we noticed when we walked in the door.
• ■ We noticed a pegged end-cap display of Gold Emblem Gummy Bears in an unexpected place: right by the over-the-counter medications. Large signage touted the items’ 99-cent price.
• ■ The store gives top-shelf placement to its Gold Emblem specialty candy line (pomegranate flavored dark chocolate bites, Australian-style soft red licorice, etc.). Large signage promoted its two for $5 sale price.
• ■ Although we did notice that one SKU in the large block of Gold Emblem candy products was out of stock, the store had placed a pegged sign in the products’ place announcing that “new treats are coming!”

The downside:

• ■ The blue bags in the large block of Gold Emblem candies were on sale, but the sale signage was so small, it was hard to read.
• ■ The store had about a half dozen displays dedicated to branded candy and chocolate, but only one dedicated to its own-brand items.

Walgreens

General observations: The candy and chocolate in the Walgreens store are located on two facing short aisles just left of the center of store (looking into the store from the front entrance). A seasonal aisle toward the right-hand side of the store houses additional seasonal candy, but we noticed no store brand products within that aisle — just Easter clearance items and a couple mid-aisle displays holding national brand candy and chocolates. We noticed store brand candy and chocolate items under the Nice! brand in the main candy aisles — as well as some upscale items under the Good & Delish brand mixed in with food items on the far right-hand side of the store.

Foot traffic was moderate during our late-morning visit. The store was very neat and clean, and most of the shelves were well-stocked.

The upside:

• ■ The store gives its large assortment of Nice! bagged candy items the brand-blocking treatment midway down one of the two main candy aisles.
• ■ The shelf tags in front of the large block of Nice! candy items featured a large type that is easy to read.
• ■ The large block of Nice! candy items is set about a foot farther back than the shelves on either side of it, which, in conjunction with the brand’s white packaging color, makes it stand out even more in the aisle.

The downside:

• ■ The store places Nice!-brand bagged chocolate items close to the bottom shelf. Even though it blocks the items together, the products are easy to miss.
• ■ The store places some of its bagged Nice!-brand hard candies (cinnamon discs, starlight mints, etc.) toward the bottom shelf, making them easy to pass over.
• ■ We noticed no displays of any store brand candy or chocolate (and fewer candy and chocolate displays overall than in the CVS/pharmacy and Rite Aid stores).

Rite Aid

General observations: The candy and chocolate aisles in the Rite Aid store are located toward the right-hand side of the store (looking into the store from the front entrance). One short aisle (toward the rear of the store) houses mainly chocolate confectionery, while the other short aisle (toward the front of the store) houses primarily sugar confectionery.

All candy and chocolate items are sold under the Rite Aid Pantry brand; the chocolate products are marketed in dark blue packaging, while the candy is marketed in medium blue packaging.

Foot traffic was light during our late-morning visit. The store was clean, but many sections of the store were poorly stocked.

The upside:

• ■ In the “candy aisle,” the store blocks many of its bagged and pegged Rite Aid Pantry items in the center of the aisle, calling attention to the products.
• ■ Large shelf tags called out a two-for-$3 promotion on the block of candy products.
• ■ An end-cap display was dedicated to pegged bags of Rite Aid Pantry products during our visit. Large signage touted: “Get more value. Shop smart, start here.”

The downside:

• ■ In the “chocolate aisle,” the Rite Aid Pantry products were scattered rather haphazardly throughout the section. All of these products were poorly stocked.
• ■ Almost half of the SKUs on the end-cap display housing Rite Aid Pantry candy were out of stock.
• ■ Several of the SKUs within the large block of Rite Aid Pantry candy products were out of stock.

Spur impulse purchases

Strong in-aisle merchandising can go a long way to boost sales of store brand candy and chocolate, but to really encourage impulse buys, retailers need to merchandise the products outside of the candy aisle as well. Mike Swiatkowski, vice president of sales and marketing for Akron, Ohio-based Hickory Harvest Foods/I.M. Good Snacks, recommends that they cross-merchandise store brand candy and chocolate with other items throughout the store and consider placement at the front-end registers. He also points to in-and-out opportunities for new products in hanging bags, which could be displayed in shippers.

Barry Rosenbaum, president of Hicksville, N.Y.-based Nassau Candy, agrees that retailers need to get store brand candy and chocolate items into high-traffic areas of the store, as many shoppers do not regularly venture down the candy aisles. But they also have to ensure that the products offer added value in the form of quality and that graphics on store brand packaging “pop on the retail shelf,” he adds.

Elegant packaging is appreciated by “savvy and selective consumers” of specialty and gourmet chocolate and candy, notes Anjali Bonfante, head of North American sales for Agostoni Chocolate, with U.S. headquarters in Los Angeles. Certifications tied to ingredients (e.g., gluten-free), ethical trade (e.g., fair trade) and dietary compliance (e.g., kosher) also hold weight with many shoppers. And a little marketing in the form of tastings, pairing suggestions and more could work wonders to engage shoppers, too.

“All these activities should communicate the premium character of the product, building a direct and compelling relationship with the final consumers,” he says.

High-quality point-of-sale materials are critical to success in space management tied to candy and chocolate, Bonfante adds.

“And, of course, shelves must always be tidy and well-stocked,” he says.