The New-Product Shuffle
Knowing what to stock and when is key for snacks, candy
Published in CSP Daily News
OAK BROOK, Ill. -- Play the new-products game correctly with snacks and candy and you'll have a leg up on increasing sales. That's one of the conclusions reached during a CSPNetwork cyberconference entitled Snack Cravings. The difficult part is deciding which new products are worth the risk and how to work them into the store set in a timely manner.
That's probably one of the more difficult things I have to do on a weekly basis, said Mike Ames, category manager for the Gulf Coast region of Circle K. It's no secret that 20% of the items generate 80% of [image-nocss] the sales in snacks. So how you tweak that bottom 20% with the smaller manufacturers out there is a difficult task.
To view an on-demand rebroadcast of this cyberconference ($49), click here.
Ames noted that while it is easy to grab new products with familiar names (i.e., line extensions), he suggests retailers use caution before doing so. That name carries a lot of power and a lot of weight, [but] it has to be a good item, he said. It has to taste good; people have to want to come back and purchase it again.
Dave Fleisher, director of trade development for Cadbury Adams, who sponsored the cyberconference, agreed. No matter who the manufacturer is, if it's a line extension just for the sake of a line extension, it probably won't make it, he said. There has to be some unmet consumer need in order for that line extension to make it. Otherwise, you're just swapping items and not really building the category.
The cyberconference, which was moderated by CSP's Jim Dickens, centered on the results of the Convenience Insights Convenience Store & Petroleum Marketer Snacks and Candy Study 2005, a joint venture of CSP and Gerke & Associates Inc., Columbia, Mo. The study, which surveyed 90 c-store retailers representing more than 60,000 stores, showed the subcategories that present the most growth potential for retailers are those that offer consumers healthy alternatives. The top six subcategories were meat snacks, nuts and seeds, granola and fruit snacks, breakfast bars, energy bars and healthy snack bars.
Candy and snacks is a very mature category. So trying to grow those numbers is a little bit difficult, said Ames. [But] nuts, seeds, meat snacks, etc.those things are still in flux. [They're] not as mature as the candy category or chips. The actual sales dollars are smaller so there's higher potential.
Ames added that the results also show that, despite consumers' loss of interest in low-carbohydrate diets, retailers have not given up presenting healthy snacking alternatives. We're not abandoning healthy alternatives. We want to move forward with them. We want to come up with more, he said. It's recognizing that while we did ride the wave last year on the Atkins diet, we still want to grow that subcategory.
Meanwhile, Ames has developed a two-tier system to ease store operators' efforts to get new products into stores as soon as possible. [I'm] resetting the entire [center of the store] with new items twice a year. But I've also created a new-item introduction area that provides space for introducing new items into the store, and I'm changing that zone once a quarter, he said. We're getting new items into the stores and letting the customers vote on what they want or don't want. If customers want it, at that point it goes [into the regular set].
That's giving Ames a step up on the majority of store operators who, according to the Convenience Insights survey, are resetting their snacks and candy section every six months (36%) or once a year (45%).