2006 Confectionery Opportunities Research

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2006 Confectionery Opportunities Research

  1. 1. Expanding the Dimensions of Confectionery A $10 Billion Opportunity Place Retailer’s Logo Here
  2. 2. A $10 Billion Opportunity For Growth Source: Dechert-Hampe & Co. <ul><li>Confectionery is already big business … but it could be much bigger! </li></ul>$10 Billion Opportunity
  3. 3. <ul><li>NCA enlisted major national retailers </li></ul><ul><ul><li>Food/Drug/Mass/Dollar outlets </li></ul></ul><ul><ul><li>Representing over 20,000 stores </li></ul></ul><ul><ul><li>Accounting for over 15% ACV </li></ul></ul><ul><li>NCA sponsored comprehensive research </li></ul><ul><ul><li>Consumer & category learning </li></ul></ul><ul><ul><li>Benchmarks & Best Practices </li></ul></ul><ul><ul><li>Opportunities & solutions for growth </li></ul></ul>Partnership For Confectionery Growth
  4. 4. NCA Research Conducted <ul><li>Individual interviews with numerous retailers, manufacturers & brokers </li></ul><ul><li>Audits of over 1000 stores across multiple channels </li></ul><ul><li>In-store interviews with over 900 Confectionery shoppers </li></ul><ul><li>In-depth interviews with Confectionery consumers </li></ul><ul><li>Analysis of store sales data & planograms from major retailers </li></ul><ul><li>Analysis of IRI syndicated data & secondary data </li></ul>
  5. 5. Confectionery Category Opportunity <ul><li>Dimensions of the Confectionery Category </li></ul><ul><ul><li>Huge category One of the largest </li></ul></ul><ul><ul><li>Profitable Strong margins </li></ul></ul><ul><ul><li>Frequently purchased Key to shopping trips </li></ul></ul><ul><ul><li>Incremental Builds the shopping basket </li></ul></ul><ul><ul><li>Promotable Responds to activity </li></ul></ul><ul><ul><li>Expandable Consumption leads to growth </li></ul></ul>Source: Dechert-Hampe & Co.
  6. 6. Confectionery Is A Huge & Growing Category Source: US Dept. Commerce <ul><li>Annual growth 4% </li></ul><ul><li>Over $ 1 Billion added every year </li></ul>Confectionery Retail Sales ($ Billions)
  7. 7. Confectionery Sold In Many Different Outlets Source: IRI,NCA Estimates, 2005 <ul><li>Major measured outlets (Food/Drug/Mass/C-store) represent just over half of all Confectionery sales </li></ul>Confectionery Retail Sales $27.9 Billion
  8. 8. Potential For Improved Performance Projects To A $10 Billion Opportunity Confectionery Sales $ Billions Source: Dechert-Hampe & Co. +35% <ul><li>Potential growth based on top performing retailers </li></ul>A $10 Billion Opportunity
  9. 9. Confectionery Is Among Largest Food Categories In Store $ Billions Source: IRI, Food/Drug/Mass, 2005 <ul><li>In total, snacks represent the largest category of sales in many stores </li></ul>
  10. 10. Confectionery Delivers High Profitability Driven By High Gross Margin <ul><li>Confectionery margins are 3-5% points higher </li></ul>Source: DHC Analysis of Retailer Data % Gross Margin
  11. 11. Confectionery Is Among Most Frequently Purchased Categories In Stores Source: ACNielsen HomeScan <ul><li>Frequent purchases make it key to retailers </li></ul>Annual Purchases
  12. 12. Confectionery is Expandable – Not a Zero Sum Game Source: Dechert-Hampe & Co. Fixed Consumption Expandable Consumption Consumption weeks Purchasing Consumption weeks Purchasing <ul><li>Consumption at fixed rate </li></ul><ul><li>Soap, Detergent, Toilet Paper </li></ul><ul><li>Promotion Loads Pantry </li></ul><ul><li>Consumption Driven by Purchase </li></ul><ul><li>Candy, Snacks, Beverages </li></ul><ul><li>Promotion Builds Consumption </li></ul>
  13. 13. Consumers Often Have A Special Relationship With Confectionery Source: Dechert-Hampe & Co. <ul><li>“ It makes me happy, when I’m feeling blue” </li></ul><ul><li>“ It’s a little pick-me-up when I need some energy” </li></ul><ul><li>“ I feel I’m a better person when I have my candy” </li></ul><ul><li>“ I hide candy. I keep my own stash – the good stuff” </li></ul><ul><li>“ The holidays wouldn’t be the same without the candy” </li></ul>
  14. 14. Consumers Today Buy Confectionery Everywhere They Shop <ul><li>Confectionery is important to build market baskets </li></ul>
  15. 15. Top Performing Retailers Sell Confectionery At A Higher Rate <ul><li>Top performers have a rate 35% greater than average </li></ul>Source: DHC Analysis of Retailer Data Confectionery Sales Index Per $MM ACV
  16. 16. Top Performing Retailers Generate Higher Growth In Confectionery <ul><li>Some of the top retailers are growing by double digits </li></ul>Confectionery % Sales Growth Source: DHC Analysis of Retailer Data
  17. 17. Top Performing Retailers Have Greater Confectionery Section Productivity Source: DHC Analysis of Retailer Data <ul><li>What is the secret of this performance advantage? </li></ul>Confectionery Sales Per Linear Foot
  18. 18. Confectionery Growth & Performance Solutions Are Consumer Driven Consumer Seasonal Merchandising Occasion-Based Marketing Impulse Merchandising New Product Innovation Shopping Interruption Best Practices in Aisle Management Source: Dechert-Hampe & Co.
  19. 19. Aisle Management
  20. 20. New Patterns Of Consumer Shopping Behavior Change the Game <ul><li>Consumer shopping patterns changed toward more shorter trips </li></ul><ul><li>Retailers competing with multiple outlets for shopping occasions </li></ul><ul><li>Majority of shopping trips today are convenience oriented </li></ul><ul><li>Shoppers must be drawn into the aisle </li></ul><ul><li>Perimeter displays must compensate for reduced traffic </li></ul>
  21. 21. Dairy Deli Meat Bakery Produce Confectionery is Located In Middle Of Most Shopping Trips <ul><li>Studies show middle of trip is least productive </li></ul><ul><li>Consumers tend to buy more at beginning & end </li></ul>Confectionery
  22. 22. Locate Confectionery Section Earlier In Shopping Trip <ul><li>Top performing retailers locate Confectionery near beginning of trip </li></ul>Source: DHC Analysis of Retailer Data Confectionery Location In Store
  23. 23. Key Objective: Bring More Shoppers Down Confectionery Aisle <ul><li>Only 20-25% of shoppers go down Candy aisle on a shopping trip </li></ul><ul><li>Conversion is high - when consumers shop candy aisle, they usually buy </li></ul><ul><li>Over 35 % of shoppers pick up a candy or snack during shopping trip </li></ul><ul><li>Locating candy in a higher traffic location results in significant improvements </li></ul>Source: DHC Shopper Observations
  24. 24. Confectionery Performs Best When Adjacent to Snacks <ul><li>Top performing retailers offer a total snack solution </li></ul>Source: DHC Analysis of Retailer Data 42% 64% Total Snacks 36% 23% Other 6 0 RTE Cereal 9 3 Bottled Juice/Water 7 9 Baking Needs 4 6 Snack Bars 6 12 Fruit Snacks 12 10 Cookies 8 18 Nuts 12% 18% Salty Snacks Others Top Performing Retailers Adjacent Category
  25. 25. Drive Sales By Allocating More Space To Confectionery Gondola <ul><li>Top performing retailers devote more space & generate more Candy sales </li></ul>Source: DHC Analysis of Retailer Data Gondola Candy Section Size In Feet
  26. 26. Confectionery Outperforms Many Other Food Categories In Store <ul><li>Categories that tend to be over-spaced relative to performance </li></ul><ul><ul><li>Baby Food </li></ul></ul><ul><ul><li>Baking Mixes </li></ul></ul><ul><ul><li>Cat Food </li></ul></ul><ul><ul><li>Cookies </li></ul></ul><ul><ul><li>Crackers </li></ul></ul><ul><ul><li>Dog Food </li></ul></ul><ul><ul><li>Packaged Desserts </li></ul></ul><ul><ul><li>Pasta/Noodles </li></ul></ul><ul><ul><li>Powdered Drink Mixes </li></ul></ul><ul><ul><li>Rice/Beans </li></ul></ul><ul><li>Category performance must be evaluated at individual retailers </li></ul><ul><li>Adjacencies must be considered </li></ul>
  27. 27. Provide More Variety to Maximize Sales <ul><li>Top performing retailers generate more sales with increased Candy assortments </li></ul><ul><li>Candy is not often a need – consumers may walk away if their choice is unavailable </li></ul><ul><li>Retailers risk lost sales & reduced consumer shopping satisfaction </li></ul><ul><li>Sections must allow for new product introductions </li></ul>
  28. 28. Increased Item Assortment Can Drive Confectionery Sales <ul><li>Top performing retailers stock more items </li></ul>Source: DHC Analysis of Retailer Data Non-Seasonal Gondola Candy Grocery Dollar Sales Per MM ACV Index
  29. 29. Retailers Risk Lost Sales If They Don’t Stock Candy Items Consumers Want Source: DHC Consumer Interviews <ul><li>Consumers always have the options of buying nothing or going to another store </li></ul>If you were shopping & could not locate the particular product you wanted to buy, which would you do?
  30. 30. Many Consumers Are Unhappy With Retail Merchandising Of Confectionery <ul><li>Consumer interviews reveal some of the shopper frustration at the shelf </li></ul><ul><ul><li>“The candy section is confusing. It’s difficult to find what you want” </li></ul></ul><ul><ul><li>“The products are all clumped up. They run into each other” </li></ul></ul><ul><ul><li>“It would help if they stood them up so you see the packages” </li></ul></ul><ul><ul><li>“They need to separate the different kinds of candy better” </li></ul></ul><ul><ul><li>“It’s overwhelming. There’s no organization to help you shop” </li></ul></ul>Source: Dechert-Hampe & Co.
  31. 31. Presentation of Candy Gondola Is Key to Shopping Behavior <ul><li>Shoppers spend only about 30 seconds shopping section </li></ul><ul><li>Many consumers are overwhelmed by lack of organization at shelf </li></ul><ul><li>70% of purchase decisions made at shelf </li></ul>Source: Dechert-Hampe & Co.
  32. 32. Bring Attention To Candy Section Best Practice
  33. 33. Block Section Into Key Confectionery Segments Source: DHC Analysis of Retailer Data <ul><li>Top performing retailers make the section easier to shop by blocking out segments </li></ul>Best Practice
  34. 34. Double-Face Top Selling Items In Center Of Department Source: DHC Analysis of Retailer Data <ul><li>Top 25-50 items usually represent a third of all sales </li></ul><ul><li>Double facing highlights these key items & eliminates out-of-stocks </li></ul>Best Practice
  35. 35. Merchandise Candy Peg Bags Spanning Across Section Source: DHC Analysis of Retailer Data <ul><li>Spanning presents more variety & consumers are more likely to make multiple purchases </li></ul><ul><li>Set peg candy section to about 20% of total space to maximize productivity </li></ul>Best Practice
  36. 36. Make A Statement In Premium Candy Source: DHC Analysis of Retailer Data <ul><li>Carry an assortment of Premium Candy to build sales & image </li></ul><ul><li>Devote 10% of space to Premium & merchandise it as a block </li></ul>Best Practice
  37. 37. Create A Section For Dark Chocolate Source: DHC Analysis of Retailer Data <ul><li>Dark Chocolate has high growth potential based on health benefits </li></ul><ul><li>Carry at least 20 items or 5% of space </li></ul>Best Practice
  38. 38. Create A Section For Sugar-Free Candy Source: DHC Analysis of Retailer Data <ul><li>Diabetics & borderline consumers represent a huge potential growth opportunity </li></ul><ul><li>Carry an assortment of Sugar-Free items to provide variety to this consumer group </li></ul>Best Practice
  39. 39. Stock An Assortment Of Children’s Candy Source: DHC Analysis of Retailer Data <ul><li>Children are a key consumption group </li></ul><ul><li>Set the assortment to about 25 items or 7% of the space </li></ul><ul><li>Merchandise children’s items on lower shelves </li></ul>Best Practice
  40. 40. Create A Section For Theater Boxes Source: DHC Analysis of Retailer Data <ul><li>Theatre Boxes represent another Candy purchase decision </li></ul><ul><li>Stock an assortment of at least 12-20 items </li></ul><ul><li>Merchandise as a block with signage calling out the occasion </li></ul>Best Practice
  41. 41. Create A Licorice Section Source: DHC Analysis of Retailer Data <ul><li>Licorice is a key growth segment </li></ul><ul><li>Stock an assortment of brands & items </li></ul>Best Practice
  42. 42. Create A Section For Jelly Beans Source: DHC Analysis of Retailer Data <ul><li>Jelly Beans have a unique consumer appeal </li></ul><ul><li>Carry an assortment of flavors to appeal to this loyal consumer group </li></ul>Best Practice
  43. 43. Use Best Practices in Aisle Management To Maximize Confectionery Sales <ul><li>Improve shopability & consumer satisfaction by blocking Confectionery section into key segments </li></ul><ul><li>Double face top selling items to highlight most popular brands & eliminate potential out-of-stocks </li></ul><ul><li>Organize peg bags spanning section to showcase variety & encourage multiple purchases </li></ul><ul><li>Provide assortment of premium candy to build sales & enhance image of candy department </li></ul><ul><li>Take advantage of health trends with an assortment of dark chocolate & functional candy/gum </li></ul>Source: Dechert-Hampe & Co. Best Practice
  44. 44. Use Best Practices in Aisle Management To Maximize Confectionery Sales <ul><li>Appeal to growing diabetic & weight conscious market with a selection of sugar-free items in key types </li></ul><ul><li>Stock theater boxes of candy in a blocked section & use signage to highlight this key usage occasion </li></ul><ul><li>Merchandise an assortment of kids candy products on a low shelf to appeal to this key consumption group </li></ul><ul><li>Create a section for jelly beans & carry popular flavors to take advantage of their unique appeal </li></ul><ul><li>Create a licorice section & carry popular brands to leverage this key growth opportunity </li></ul>Source: Dechert-Hampe & Co. Best Practice
  45. 45. NON-CHOCOLATE PEG BAGS NON-CHOCOLATE LAYDOWN BAGS KIDS NOVELTIES LICORICE FUN SIZE BAGS BOX CHOC PREM CHOC DARK CHOC CHOCOLATE LAYDOWN BAGS MULTI- PACKS BLOCK CHOC KING SIZE THEATER BOXES JELLY BEANS MINTS GUM SUGAR FREE CHOC PEG BAGS Confectionery Schematic With Segment Blocking Best Practice
  46. 46. Reinvent Confectionery Section To Increase Appeal to Consumers <ul><li>Utilize headers & signage to attract attention & create a fun atmosphere for shopping </li></ul><ul><li>Provide better shelf organization by blocking defined segments </li></ul><ul><li>Use shelf dividers & section breaks to improve appearance & shopability </li></ul><ul><li>Enhance shelf presentation with more stand-up & facing products or colorful signage </li></ul><ul><li>Use call-outs to highlight new items & bring attention to special offers </li></ul>Source: Dechert-Hampe & Co. Best Practice
  47. 47. Shopping Interruption
  48. 48. Dairy Deli Meat Bakery Produce Confectionery Perimeter Displays In-Aisle Display Impulse at Checkout Seasonal & Occasional Candy Sales Are Improved By More Points Of Shopping Interruption Best Practice
  49. 49. Increase Confectionery Display On Perimeter & High Traffic Locations <ul><li>Majority of shopping trips today are convenience </li></ul><ul><li>Shopping is focused on the perimeter of the store </li></ul><ul><li>Impulse buying is driven by more points of interruption in shopping trip </li></ul><ul><li>Develop new merchandising vehicles to enable more perimeter display </li></ul>Source: Dechert-Hampe & Co. Best Practice
  50. 50. Candy Is The Most Responsive Category For Display Treatment Source: IRI, Food, 2005 % Increase On Display Only
  51. 51. Candy Is Under-Displayed Relative To Response It Generates Source: IRI, Food, 2005 % Grocery Store Displays
  52. 52. Top Performing Retailers Provide More Merchandising Support Source: IRI, Food, 2005 <ul><li>Top performers display much more </li></ul>59 52 40 Any Merchandising 14 5 16 5 Low Performers Confectionery Gondola % Volume 17 7 20 8 Medium Performers 18 Price Reduction 7 Feature Only 24 Display Only 10 Feature & Display Top Performers
  53. 53. Make Confectionery Available At Key Shopping Locations What Areas Of The Store Did You Shop Today? Donuts Display Single Serve Frozen Novelties Restrooms Cigarettes Checkout Counter Confectionery King Size Candy Confectionery Sandwich Cooler Fountain Drinks Outdoor Display Outdoor Display Entrance Food Service 43% Source: DHC C-Store Shopper Observations 13% 14% 20% 40% 22% Juices Milk/Dairy Frozen Foods Frozen Ice Cream/ Novelties ATM Machine Potato Chip Rack 2 Liter Carbonated Beverages Nutrition Bars Sweet Goods Snacks Grocery Products Nuts Chips Water Bagged Candy Chips Chips Meat Snacks Salty Snacks Salty Snacks Chips Nuts Hot Dog Grill Chips Chips HBC Batteries/ Film Magazines/ Newspapers Coffee Bar Nutrition Bars Coffee Mugs Muffins Baked Goods Automotive Products Confectionery Baked Goods Drinks Candy Non-Grocery Household Products Pet Food Microwave/ Supply Station Candy/Gum Carbonated/Non Carbonated Drinks Waters Beverage Coolers Best Practice
  54. 54. Research Demonstrates Value Of Additional Candy Locations In Store <ul><li>Retailers should add more points of shopping interruption </li></ul>Source: DHC Analysis of Retailer Data Candy Store Sales Index By Number Of Permanent Locations
  55. 55. Product Innovation
  56. 56. Candy Is The Leading Category For New Product Introductions Source: ProductScan <ul><li>Together, Candy & Snacks represent nearly 30% of all new Food & Beverage SKUs </li></ul>New SKUs By Category
  57. 57. Nearly A Third Of Candy Sales Are Produced By New Items Source: IRI, FDMX, 2004 <ul><li>New products are truly the lifeblood of Confectionery </li></ul>% Category Sales
  58. 58. Product Innovation To Meet Emerging Consumer Needs <ul><li>Diabetes is growing </li></ul><ul><ul><li>18 million in U.S. </li></ul></ul><ul><ul><li>1.3 million new cases per year </li></ul></ul><ul><li>Why is market not responding </li></ul><ul><ul><li>Sugar-free candy down in 2005 </li></ul></ul><ul><ul><li>Declines primarily in chocolate </li></ul></ul><ul><li>Sugar-free Candy to show you care </li></ul><ul><ul><li>Grandma & Grandpa </li></ul></ul><ul><ul><li>Expectant mothers </li></ul></ul>
  59. 59. Premium & Dark Chocolate Offer Health & Profits <ul><li>Functional foods becoming a reality </li></ul><ul><ul><li>Antioxidants in chocolate </li></ul></ul><ul><ul><li>Dark chocolate sales up 24% </li></ul></ul><ul><li>Premium candy products </li></ul><ul><ul><li>Similar to gourmet coffee, fine wines, artisan breads </li></ul></ul><ul><ul><li>18% of consumers buy Premium Candy </li></ul></ul><ul><ul><li>Premium Candy sales $ 1.0 – 1.5 Billion </li></ul></ul><ul><ul><li>Less than 50% in FDM outlets </li></ul></ul>Source: IRI, Mintel, 2005
  60. 60. Bring Innovation To Category By Tapping Into Snacking Trends <ul><li>Adapt new flavor profiles from popular international cuisines to Confectionery </li></ul><ul><li>Challenge existing definitions of snack categories with new combinations </li></ul><ul><li>Expand the role of candy into more snacking need states </li></ul><ul><li>Leverage health benefits of cocoa to challenge existing perception of candy </li></ul>Best Practice
  61. 61. Seasonal Merchandising
  62. 62. Seasonal Candy Represents About A Quarter Of All Confectionery Sales Source: NCA, 2005 <ul><li>Halloween & Easter are large </li></ul><ul><li>Valentines Day the smallest </li></ul>Seasonal Candy $6.2 Billion
  63. 63. Confectionery Sales Are Heavily Influenced By Traditional Holidays $MM Valentine’s Easter Halloween Christmas 4 Week Period Ending Source: IRI, FDM, 2005
  64. 64. Top Performing Retailers Have A Greater Seasonal Candy Sales Rate <ul><li>The top performers have a rate 35% greater than average </li></ul>Source: DHC Analysis of Retailer Data Sales Index Per $MM ACV
  65. 65. There Are Top Retailers That Have Greater Sales Rates at Each Season <ul><li>The greatest variance is seen at Christmas </li></ul>Source: DHC Analysis of Retailer Data Top Performer % Advantage 27 % % % % 33 41 22 Halloween Valentines Easter Christmas
  66. 66. Most Consumers Buy Seasonal Candy at Traditional Holidays <ul><li>Increased buying at traditional holidays is still an opportunity </li></ul>Holidays/Occasions % Consumers Buying Candy Source: DHC Consumer Interviews
  67. 67. Manage Seasonal Candy To Meet Consumer Needs <ul><li>Recognize important role Seasonal Candy plays in consumer’s life </li></ul><ul><li>Consumers often view Seasonal Candy as a planned purchase </li></ul><ul><li>Retailers must stock extensive variety to appeal to specific consumer preferences </li></ul><ul><li>Balance inventory cost against risk of lost sales opportunities </li></ul>
  68. 68. Christmas Candy Is An Important Feature In Holiday Celebrations <ul><li>Consumers include Christmas candy in their holiday celebrations in a variety of ways </li></ul>Source: DHC Consumer Interviews 86 Stocking Stuffer 71 Decorations 64 Baking 85 Guests/Party 90 Snacking 95 % Gifts Christmas Candy Usage 77% of consumers agree: “ Christmas candy is an important part of the holiday celebration”
  69. 69. Consumers Buy Christmas Candy On Multiple Shopping Occasions Source: DHC Consumer Interviews <ul><li>Consumers reported an average of 2.6 purchase occasions for Christmas Candy </li></ul>37% Make a special trip to buy Christmas Candy 43% Buy Christmas Candy when I see it on display 53% Buy Christmas Candy during regular shopping trips % Agree
  70. 70. Consumers Buy Christmas Candy Over The Entire Season <ul><li>Some people make a first purchase before Thanksgiving </li></ul><ul><li>A large number of people continue to buy after Christmas </li></ul>Source: DHC Consumer Interviews 7% 0% None 32% 1% After Christmas 34% 8% Christmas Week 45% 23% 1 Week Before Christmas 32% 47% 2-3 Weeks Before Christmas 9% 21% Before Thanksgiving Additional Purchase 1 st Purchase
  71. 71. Christmas Candy Segments Should Be Merchandised To Meet Seasonal Needs <ul><li>Decorating & snacking candy should be available early </li></ul><ul><li>Gifts are concentrated in the 3 weeks before Christmas </li></ul><ul><li>Stocking stuffers in the weeks just prior to the Holiday </li></ul><ul><li>Continue to display snacking candy after Christmas </li></ul>Weeks prior to Christmas 6 5 4 3 2 1 Best Practice
  72. 72. Retailers Must Stock Christmas Candy Consumers Want Source: DHC Consumer Interviews <ul><li>Retailers risk lost purchases if they don’t carry a variety of Christmas Candy </li></ul>If Desired Christmas Candy Were Unavailable …
  73. 73. Stores Dressed For The Holidays Create A Candy Buying Environment
  74. 74. Seasonal Candy Is Highly Dependent Upon Merchandising Support Source: IRI, 2005 <ul><li>More than half sells on display </li></ul>Seasonal Candy % Volume
  75. 75. Top Performing Retailers Do More Feature & Display Of Seasonal Candy Source: IRI, 2005 <ul><li>Seasonal Candy responds to quality support </li></ul>24 47 4 9 Low Performers Seasonal Candy % Volume 26 45 5 11 Medium Performers 20 Price Reduction 46 Display 6 Feature 16 Feature & Display Top Performers
  76. 76. Manage Holidays As Seasons Instead of Events <ul><li>Recognize the patterns of consumer buying for each of the seasons </li></ul><ul><ul><li>Celebration / Decoration </li></ul></ul><ul><ul><li>Gift (Family, male/female, child) </li></ul></ul><ul><ul><li>Snack / treat </li></ul></ul><ul><li>Consumer attitudes & buying patterns show the potential for increased seasonal purchases </li></ul><ul><li>Develop new solutions to maximize seasonal growth opportunities </li></ul>
  77. 77. Occasion Based Marketing
  78. 78. Other Major Holidays & Seasons Represent Key Opportunity For Candy Growth Source: DHC Consumer Interviews <ul><li>Thanksgiving is the biggest food holiday of the year & Candy should be a part of it </li></ul>Holidays/Occasions % Consumers Buying Candy
  79. 79. Grow Confectionery With Additional Holiday Buying Occasions $MM Valentine’s Easter Halloween Christmas 4 Week Period Ending Super Bowl Mother’s Day School’s Out Summer Days Back-To- School Thanks- giving Source: Dechert-Hampe & Co.
  80. 80. Expanded Holiday Buying Occasions Source: Dechert-Hampe & Co. Bowl candy / dessert candy / dinner mints Family Food Holiday Thanksgiving Candy bars Lunchboxes Back to School Hard candy won’t melt Picnics/Ballgames Summer Days Piece candy for treats Kids Home School’s Out Gift candy near cards Every Family Mother’s Day Bowl candy for parties Major Social Event Super Bowl Merchandising Focus Rationale Holiday/Event
  81. 81. Other Potential Candy Buying Occasions Source: DHC Consumer Interviews <ul><li>Consumers also mention birthdays & going to the theater as candy buying occasions </li></ul>Occasions % Consumers Buying Candy
  82. 82. Create New Consumer Buying Occasions For Confectionery <ul><li>Need to address new occasions </li></ul><ul><ul><li>Birthdays/parties/anniversaries/graduations </li></ul></ul><ul><ul><li>Alternative holidays (Thanksgiving, 4th of July) </li></ul></ul><ul><ul><li>Events (Super Bowl, Academy Awards, etc.) </li></ul></ul><ul><ul><li>Hallmark holidays (Sweetest Day, Mother’s Day, Father’s day, Grandparent’s day, etc.) </li></ul></ul><ul><li>Cross category solution sales </li></ul><ul><ul><li>Candy & greeting cards </li></ul></ul><ul><ul><li>Cigarettes & mints </li></ul></ul><ul><ul><li>Boxed chocolate & wine </li></ul></ul>Best Practice
  83. 83. Leverage Holidays & Events With Cross Category Merchandising <ul><li>Merchandise gift candy with greeting cards as well as in the aisle </li></ul>Best Practice
  84. 84. Solutions For Confectionery Growth <ul><li>Recognize the importance of Confectionery to the store & the retail growth opportunity </li></ul><ul><li>Drive shoppers to the section with better location, signage, & merchandising </li></ul><ul><li>Increase shelf space & assortment for more sales & enhanced consumer satisfaction </li></ul><ul><li>Reinvent the section with better shelf organization & a more appealing product presentation </li></ul>
  85. 85. Solutions for Confectionery Growth <ul><li>Drive sales with “points of shopping interruption” on perimeter & other high traffic locations </li></ul><ul><li>Create demand by leveraging secondary holidays & developing new consumer buying occasions </li></ul><ul><li>Embrace product innovation to meet new consumer needs </li></ul><ul><li>Harness the total power of snacking to expand the role & sales of Confectionery </li></ul>

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