Where is the best place to position confections to boost sales?

By Elizabeth Crawford contact

- Last updated on GMT

Source: iStock
Source: iStock
Long-coveted as a premium place for impulse purchases, the checkout aisle may not actually be the best place for encouraging candy consumption, according to Packaged Facts research. 

While it is true that 80% of confections purchased are done so on impulse and by the cash register is a prime location for last minute add-ons to a shopping trip, more chocolate is actually purchased in the candy aisle than in the checkout lane, research analyst George Puro writes in Packaged Facts Chocolate Candy Market in the US​ report released in August.

Specifically, only 41% of chocolate purchased in the first part of 2016 came from the checkout aisle, compared to 71% that came from the candy section and aisle, and 23% from the gourmet and specialty section, Packaged Facts found. This suggests the inner aisles of the store may be more effective marketing places than by the cash register.

One reason for the less-than-anticipated sales at the cash register could be the proliferation of self-checkout lanes at supermarkets and drugstores, Packaged Facts suggests.

“This trend obviously cuts out the front-end holding pen where consumers are lined up next to categories of high-margin impulse purchases, especially candy, gum and magazines,”​ the report explains.

Also retailers and manufacturers are “exploring new ways to build excitement in-store, starting with improvements in lighting and going all the way to branded in-store boutiques,”​ which obviously lend themselves toward more purchases from store aisles, the report adds.

Seasonal candy displays, such as for Christmas or Halloween, also are effective sales drivers with almost as many – 39% – of chocolate sales originating there compared to 41% at checkout, according to Packaged Facts data, which is based on a survey that allowed consumers to pick more than one option.

Other emerging “transaction zones”​ for confections are the pharmacy, the café and on mobile phones via “buy online, pick-up in store”​ models, according to research conducted in November 2015 by Mars and Wrigley and cited by Packaged Facts.

Sales strategies for manufacturers

Driving candy sales does not all fall on retailers and product placement. A lot of the burden also is placed on manufacturers that must carefully balance conflicting consumer demands and trends to ensure maximum appeal to the most consumers possible.

Given consumers’ focus on health and wellness, many confection companies are offering better-for-you options by folding in on-trend fruits and berries such as goji, acai, blackberry and pomegranate, and boosting protein with nut and seed inclusions, including trendy hazelnuts, pistachios and almonds.

A related benefit area that “is rich with potential”​ is calling out the functional benefits of candy, such as breath freshening, curbing cravings and hunger relief, according to Packaged Facts.

It added: “Some niche products are offering more explicit functional benefits, such as sleep aid or an energy booster with caffeine.”

Finally, a “proliferation of new bite-size forms”​ and “chocolate-covered bites and thins”​ are emerging to help confections fit into consumers’ healthier lifestyles, the report adds.

Flavor trends to watch

Flavor trends driving sales of confections include a continuing blurring of the line between sweet and salty snacks, which also is helping candy manufacturers “push into the snack area and snack products step into the candy terrain,”​ the report notes.

Sweet heat that layers chocolate with spice or fruity flavors, and “mash-ups”​ of “contrasting flavors to enhance the taste experience,”​ also are driving sales on the flavor front.

The future is unclear

Despite these innovations to accommodate shifting consumer preferences, sales of confections in 2016 “appear to be somewhat sluggish so far,”​ Packaged Facts notes.

It estimates that the US confection market in 2015 reached $35.9 billion – an increase of 3.7% from the prior year. This is an improvement over the two previous years which grew only 2.5% and 2.9% respectively.

The upward trend does not look like it will hold for 2016, though. Packaged Facts predicts only a 1.1% increase in 2016 compared to last year.

This slowdown should not be long-lasting, however, Packaged Facts says. Rather, it predicts by 2020 sales of confections in the US will exceed $41 billion for the first-time, thanks to a “strong pace of innovation, an influx of creative new players and a steady flow of new products that engage consumers.”

Related topics: Chocolate, Retail & Shopper Insights

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