by Lisa White

Wholesale distributors that are not big on seasonal items may need to rethink this lucrative category.

Consider this – the National Confectioner’s Association (NCA) reports that Easter sales grew 5.4 percent this year, with non-chocolate Easter candy sales increasing by 12.3 percent, despite losing a week of merchandising time due to the holiday’s early arrival on April 8.

Confectionery sales also were record-setting for the 2007 Valentine’s Day sales period, says NCA, driving a 6.7 percent sales increase over 2006.

According to Chicago, IL-based research firm Information Resources (IRI), Valentine’s Day non-chocolate candy sales grew a whopping 11.9 percent.

For the 52-week sales period ending April 22, 2007, total confectionery sales tracked ahead of last year at a 2.9 percent rate, reflecting strong Valentine’s Day and Easter selling seasons, IRI reports.

These numbers are hard to ignore. So are the many innovative products packaged for impulse buys that are a c-store’s bread and butter.

"Convenience stores have been following an overall premium product trend over the past few years, namely in the major growth of flavored coffee and tea offerings as well as fresh baked goods," says Don Stohrer, category manager, pralines, for Somerset, NJ-based Ferrero USA. "Expansion of premium [seasonal] chocolate is the next logical step for this channel. C-stores have a huge opportunity to further capitalize on this growth, because this category is underdeveloped in these stores."

Making seasonal work
Richard Butler, national sales manager at Rockaway Beach, NY-based Madelaine Chocolate Novelties, says convenience stores are no longer a destination point for seasonal candy. "The challenge has been informing their customers about quality," he says.

However, many say untapped opportunity awaits in this segment. "I haven’t seen a lot of seasonal candy in these outlets. However, convenience stores can capitalize on seasonal candy," says Amy Atkinson Voltz, vice president of Judson- Atkinson Candies in San Antonio, TX. "It has to be placed up by the register, because most stores don’t have an aisle location for these products,"

Atkinson Voltz says display sizes and locations depend on how much space the store has available. "C-stores need smaller packages, like boxes, bags or gift-type items that go well in their stores. And because people will rush in at the last minute, these items need to be conveniently located by the door," she recommends.

While some convenience stores do a good job with seasonal candy, it is a different type of business, says James Tucker, senior vice president of sales and merchandising at R.M. Palmer Company, based in West Reading, PA. "I don’t think consumers think of c-stores for these types of items," he says.

Distributors should note that it is the stores that are tightly focused and have visible, dedicated displays that are successful with seasonal items. "There are some c-stores that do a fine job in this segment. They have a specific place for merchandisers or display shippers and they have a variety of seasonal merchandise at one price point to keep it simple," he says.

According to Tucker, seasonal products need to be in off-the-shelf displays to garner more attention from customers. "They also need to be at reasonable price points, generally in the $2 to $3 range," he recommends.

There doesn’t need to be a lot of pieces in the display, yet stores need to be different and creative. "If retailers don’t let customers know they have these goods on sale, no one will buy them," Tucker says.

R.M. Palmer offers displays for its candy bags. "The bags work best for us in c-stores because these can be quickly picked up for candy dishes, are at the right price point for these stores and offer a good markup," Tucker says.

C-stores are generally looking for quick in and out, high dollar margin and a good value for quick turns, says David Plotnick, director of marketing for Lincolnshire, IL-based Ford Gum & Machine Company. "With a statement that includes a good packaging display and signage, they can bring seasonal business in quickly," he says.

Most c-stores concentrate on one or two seasonal lines, which Plotnick says equals missed opportunities. Distributors can sell a wider assortment of items to help retailers bring in customers who are seeking these items. "Consumers need more selection. Sales would increase if these stores carried more SKUs and had more individual counter displays," he says. "Floor displays with one price point and multiple SKUs would provide excellent seasonal sales opportunities."

If c-store retailers can find a location on an end-cap, side-kick or clip strip that makes a statement and shouts out to consumers that a product is available for a limited time, that’s appealing, Plotnick says. "The challenge is buying the right quantities, because seasons are so short. Retailers need to be careful not to overbuy and to include different SKUs, so all their eggs are not in one basket," he explains.

Butler recommends promoting seasonal candy 60 days prior to the holiday.

"Based on the retail sales we’ve seen, c-stores can start promoting holidays the moment the previous holiday is over. Sales start early," Plotnick says. "And because these are impulse purchases, customers are more likely to buy this candy for themselves, rather than as a gift for someone else."

Today’s trends
The trends in Easter and Valentine’s Day candy mirror the trends in the confections segment. For example, Butler notes that dark chocolate is popular, along with kids candy and Easter basket items.

Stohrer agrees, noting that premium dark chocolate growth has shown an annual minimum of more than 30 percent dollar sales growth since 2003, with a high of more than 59 percent in 2006.

Also catering to health-conscious consumers, Just Born in Bethlehem, PA, has launched sugar-free PEEPS Marshmallow Hearts for Valentine’s Day, 2008. The line is designed to meet the needs of consumers watching their sugar intake. Made with Splenda, the new line joins sugar-free Chicks, which debuted last Easter.

According to Kathy Bassininski, PEEPS’ brand director, "The successful introduction of Sugar-Free Chicks for Easter 2007 has generated an outpouring of consumer requests to make more PEEPS sugar-free products available year-round."

Just Born also has introduced PEEPS Yellow Tulips, its first new spring shape since 1999.

R.M. Palmer typically launches between five and 10 new items each season. "For Valentine’s Day, we offer 9-oz. pouches filled with 25 fudge-filled hearts. Packaging graphics feature Disney princesses and characters from Disney/Pixar’s Cars movie," Tucker says.

Valentine’s Day packaging, in particular, has moved away from just pink and red hearts. "We’re seeing more whimsy and novelty components, whether it is a box, mug or gift. These can be white, yellow or other nontraditional colors," Tucker notes.

Catering to consumers looking for nontraditional Valentine’s Day options, R.M. Palmer offers a hollow chocolate bee filled with honey-flavored dextrose and a hollow chocolate cow featuring milk-flavored dextrose inside.

Plotnick adds that there is a lot more call for individual, non-chocolate novelty gift items, especially as gifts for young children.

For Valentine’s Day, Ford Gum has introduced a candy jelly bean and lollipop bouquet that retails for 99 cents. "We are gearing it for c-stores. It is unique and great for kids or women," Plotnik says. "For Easter, we’ve added some novelty play value items featuring candy and a toy at a 99-cent price point."

"Non-chocolate items have been strong sellers during the Easter season for a number of years," Plotnick says. Ford Gum offers Easter Egg Carton bubble gum that is a popular holiday item.

In terms of packaging, multi packs are big, especially for Easter, Plotnick notes.

For Valentine’s Day, Butler sees more gift items and larger boxed chocolates, along with smaller pack sizes geared for instant consumption.

"We’re seeing the seasonal category growing as a whole, especially with Easter," says Atkinson Voltz. "When it comes to seasonal items, people don’t want flavor changes, they want products they’re familiar with."

Although Judson-Atkinson has not introduced any new products recently, it has experienced growth in its Easter lines. The company offers panned marshmallow eggs, jelly beans and Easter creams. "We have made some packaging changes, and this has helped increase sales of these items," she says.

For Valentine’s Day, the company offers a variety of packaging options for its cherry sours. "This is the area where we’re experiencing the biggest growth," Atkinson-Voltz says.

She notes that today’s seasonal packaging features brighter, more colorful graphics.

"Valentine's is beginning to follow the overall trend that we have been seeing in the chocolate category over the past four to five years, which is a shift to premium-priced, higher quality chocolate products and brands," Stohrer says.

Although the traditional Valentine's brands that Americans have come to know over the past 50 years still command the lion's share of the volume for the holiday, Stohrer says they haven't been able to produce much year-on-year growth. "That share, while still substantial, has begun to erode," he says.

Expansion of the Ferrero's Prestige assorted line into Valentine's has followed the same trend, Stohrer says. "With similar packaging cues and a high-quality presentation, the Prestige brand has generated sales that are 100 percent incremental to the base brand Rocher. Total Ferrero Valentine's sales year on year have illustrated this fact, with two consecutive Valentine's seasons of more than 30 percent increases in dollar sales growth," says Stohrer, adding that Valentine's, like other gift box chocolate holidays, has become about product and presentation.

Easter, on the other hand, has traditionally been a holiday driven by lower priced items for younger consumers, mainly to build Easter baskets. "Over the past seven to eight years, Ferrero has been able to create the $5 to $8 price point for the premium chocolate segment, helping retailers drive volume on higher margin items. With Easter icon packs, such as the 5.7-oz. Egg and Bunny, Ferrero Rocher actually commands roughly 70 percent of the premium chocolate volume at this price point," Stohrer says.

Stohrer says the pack format for gifting holidays is critical, since handing over the box or pack is the first impression made on the recipient. "The more premium the packaging appears and feels, the better the gift giver will feel about the purchase. This helps drive turns during critical holiday seasons," he says.

"From our observations from the prior season, we have seen the Valentine sets primarily include chocolate and conversation hearts. Easter sets contain jelly beans and filled eggs," says Meredith DeHaven, brand manager at Farley’s & Sathers Candy Company, based in Round Lake, MN.

For both seasons, packaging is designed with seasonal graphics and colors and, in some cases, with pouches to allow for handing out in the classroom or to fill Easter baskets, DeHaven says. "A number of our items are designed to include a ‘To and From’ area on the package to be used as handouts in the classroom," she notes.

This past year, Farley’s and Sathers introduced Rain-Blo Jumblo Valentine items filled with pink, red and white gumballs and Trolli Gummi Bears and Hearts.

Looking ahead
There are a number of new product launches planned for 2008. For Easter next year, Ferrero will be launching a third Easter icon SKU, a Ferrero Prestige Flat Egg, which Stohrer says will add variety to the Ferrero Easter portfolio and build on the success of the Prestige expansion during Valentine's Day. Also, for Christmas 2007, and Valentine's and Easter 2008, the company is re-launching its premium gift box assortment, Ferrero Prestige, with a new product mix that now features Rocher, Rondnoir and a new confection called Garden Coco.

Along with offering chocolates in smaller boxes, Judson-Atkinson is considering adding a theater box geared for c-stores to its seasonal lineup.

Tucker says c-stores that work at seasonal will be successful. "They need to have a designated space, maybe by the registers, with seasonal displays. Then customers will become familiar with these sections due to their frequent shopping and look for those items," he says.

With the strong sales in seasonal candy, wholesale distributors can help retailers build a profit center for these items in their stores.

Lisa White is a food industry freelance writer based in Cary, IL.



Valentine’s Day Facts

• At one time, conversation candies were made into many shapes, including horseshoes, baseballs and watches.
• About 8 billion hearts will be produced this year; that’s enough candy to stretch from Rome, Italy to Valentine, AZ and back again 20 times.
• The peak selling season for conversation hearts lasts only six weeks, but confectioners produce the candy for nearly 11 months of the year.
• At least 10 new conversation heart sayings are introduced each year.
• More than 36 million heart-shaped boxes of chocolate will be sold for Valentine's Day. A survey conducted by the Chocolate Manufacturers Association revealed that 50 percent of women will likely give a gift of chocolate to a guy for Valentine's Day.
• Valentine's Day is the fourth biggest holiday of the year for confectionery purchases (after Halloween, Easter and Christmas).

Source: NCA

Easter Facts

• April 22nd is National Jelly Bean Day.
• Each year, U.S. manufacturers produce more than 16 billion jelly beans for Easter -- that's enough to completely fill a plastic Easter egg 89 feet high and 60 feet wide (about the height of a nine-story office building).
• The first chocolate eggs were made in Europe in the early 19th century and remain among the most popular treats associated with Easter.
• 90 million chocolate Easter bunnies are made for Easter each year.
• 16 billion jelly beans are made for Easter.
• Each day, five million marshmallow chicks and bunnies are produced in preparation for Easter.
• Easter is the second top-selling confectionery holiday behind only Halloween.
• 88 percent of adults carry on the Easter tradition of creating Easter baskets for their kids.

Source: NCA

Seasonal Resources

• Judson-Atkinson Candies, San Antonio, TX, (800) 962-3984, www.JudsonAtkinsoncandies.com.
• Just Born, Bethlehem, PA, (610) 867-7568, www.justborn.com.
• Farley’s & Sathers Candy Company, Round Lake, MN, (507) 945-8181, www.farleysandsathers.com.
• Ferrero USA, Somerset, NJ, (732) 764-9300, www.ferrerousa.com.
• Ford Gum & Machine Company, Lincolnshire, IL, (847) 955-0003, www.fordgum.com.
• Madelaine Chocolate Novelties, Rockaway Beach, NY, (718) 945-1500, www.madelainechocolate.com.
• R.M. Palmer Company, West Reading, PA, (610) 372-8971, www.rmpalmer.com.