Single Smarts
By Renee M. Covino
Single and carefree? Not when it comes to candy singles. A front-end expert offers advice on how to best manage this significant subset.

The single life of a candy bar is far from free-wheeling. Some would even argue there is a serious science behind the front-end placement of these single impulse packs of joy.
“My work is all about immediate consumption and helping retailers drive basket size,” says Cam Cloeter, a self-proclaimed “space doctor” of front-end merchandise (particularly in supermarkets). Candy singles are a very important subset of the total front-end business, comprising about one-third, or 30-33 percent, according to Cloeter, whose formal title is president of Impulse Marketing, based in Long Valley, N.J.
Little Price PromosGo a Long Way
Candy singles and price promotions are a very good mix — good enough to stir them up regularly at checkout.

As a category captain for giant wholesaler McLane Company Inc., Hershey recently did a price analysis on everyday singles at a 50- to 100-store convenience chain and discovered that promotions “like two for $2 can increase unit sales by up to 58 percent and profits by up to 30 percent,” relays Teresa Voelter, merchandising manager of confections for Temple, Texas-based McLane. “King-size bars can typically retail at $1.19, so just moving that to two for $2 can produce this type of result.

In a similar analysis Hershey did for McLane, price promotions on standard-size bars such as two for $1.50 increased unit sales by 22 percent and profits by 20 percent.
Cloeter works with some major candy brands and with retailers to get more shopper “converts” to buy these immediate consumption items at the front end. “The people that convert tend to convert over and over,” he says.
So in the case of candy singles, what placement strategies get the conversion job done?
Customer left. This strategy has retailers moving certain confectionery singles “over the belt” to a customer’s left as he or she is checking out. Working with one major manufacturer, Cloeter discovered that moving gum and mints over the belt grew them by 15 percent. “The average gum and mint customer takes about 12 seconds to make a decision whether to buy or not,” Cloeter states. “On the other hand, magazines, which are often merchandised at customer left, take 53 seconds — why do that over the belt when customers don’t have that kind of time?” He adds that “customers don’t have eyes in the back of their heads, and when they’re putting their items on the belt, they can’t see the candy items on the right.”
High right. This strategy works well with chocolate, and merely involves moving it up higher on the right side of the front-end set. Once again, Cloeter discovered a 15 percent growth in sales if this method is employed. “All too often, you see chocolate singles like Reese’s and Kit Kat down on the right rack, when we, adults, don’t like to bend low like that,” Cloeter explains. “If they’d put it at eye level more often, we will respond and convert.”
With both the “customer left” and “high right” merchandising ideas, “sales of singles are increased without changing price or adding space,” Cloeter reminds. “Retailers can improve the visibility and accessibility of these items; they can improve confectionery at the front end by 15 percent just with these alone.”
Forget alternating variety. Another key merchandising strategy for the most effective sales in front-end candy singles is to keep sets consistent from aisle to aisle. “If you want to drive conversion and basket sales, take the top 30 or 40 candy items and put them in every single lane, rather than alternating variety,” advises Cloeter. “Customers determine check lanes by the shortest lines. Seventy-five percent do not shop across lanes so retailers who sprinkle around variety for more sales — it’s a bad idea. They might think they’re doing a good thing, when in actuality, they’re hurting themselves.”
The reason for this rationale is that, unfortunately, there is very limited check-lane space. “If there were such things as 70-foot lanes, retailers could put more stuff up there, and play around with variety,” he adds. “But most check-stands are only 75-100 inches in total length — and in that, a retailer has to fit magazines, beverages, gum and mints, and candy.” And the candy has the most competition from the beverage category. That category is “exploding” right now thanks to the proliferation of bottled water and iced tea SKUs, among others, Cloeter maintains.
But consider some under-penetrated segments. “I do think there are candy categories up at the front that are under-penetrated,” Cloeter reveals. Primarily what he’s referring to are premium chocolate and kids’ candy.
“It’s no secret that the big guys with national sales forces tend to dominate the space up there so companies like Ferrero or Topps really struggle with their couple of SKUs,” he says. “They really get pushed around by the biggies.”
Based on some of Cloeter’s newest work currently underway, he thinks “there’s an exciting opportunity to bring another sub-category or two to the front end,” particularly with what’s going on with dark chocolate, “which I think is here to stay,” he says, and with non-chocolate kids’ items, which tend to be under-penetrated because they are not represented by the biggest manufacturers, according to him.
Top 20 Candy Singles in C-Stores
For 52 weeks ending August 17, 2006
Item Unit Volume (in millions) % Change (vs. prior year)
1. Snickers 11.4 1.4%
2. Snickers King-Size 7.7 2.7%
3. Reese’s Peanut Butter Cup King-Size 7.7 6.2%
4. Reese’s Peanut Butter Cup 1.5 oz. 7.1 0.4%
5. M&M’s Peanut 5.5 1.8%
6. M&M’s Peanut King-Size 4.9 6.0%
7. Hershey's Milk Chocolate 4.2 -5.6%
8. Twix 4.2 -1.1%
9. 3 Musketeers 4.0 5.1%
10. Hershey Almond King-Size 4.0 7.6%
11. Hershey Almond 3.8 -10.3%
12. Twix King-Size 3.5 6.6%
13. Kit Kat 3.4 -6.4%
14. M&M’s Plain 3.3 -3.3%
15. Skittles 3.0 -0.4%
16. Milky Way 3.0 -0.2%
17. Hershey Milk Chocolate King-Size 2.9 14.3%
18. Starburst 2.9 12.2%
19. Take 5 1.7 -43.1%
20. Butterfinger 1.4 -48.8%
SOURCE: McLane Company Inc.
Don’t leave out self-checkout. Self-checkout is affecting the front-end business in an “enormous way,” according to Cloeter, because those who use this means to get through the lines “tend to be the ones with the smallest baskets and are the most frequent shoppers. Those are exactly the customers you want to present with items they can buy everyday,” he explains, “but more often than not, there’s nothing there for them to buy.”
Best practices for retailers with self-checkouts include putting in single candy items and other front-end merchandise on a merchandiser between the front-most checkout lanes, Cloeter reveals. “It becomes almost like a traffic-flow monitor,” he says. “It ends up being like a gate or a fork in the road for customers to choose which self-checkout side they should go on, the right or the left, but meanwhile, the middle merchandiser is like a free-for-all.”
His research reveals that 13 feet from left to right is the minimum amount of space that should be allowed for this self-checkout middle merchandiser. The best news of all: “It gets back 80 percent of the front-end sales,” according to Cloeter.
Candy and Snack Singles in C-Stores
Ranked in order of greatest to least growth for 52 weeks ending August 17, 2006
Category Unit Volume (in millions) % Change (vs. prior year)
Gum 144.7 2.4%
Chocolate Bars 176.9 1.2%
Premium 9.7 -4.0%
Non-Chocolate Bars 73.0 -5.1%
Candy Rolls (including Mints and Drops) 23.8 -7.9%
Changemakers 22.0 -14.8%
Other Salty Snacks 11.6 27.9%
Nuts-Seeds 35.3 19.1%
Crackers 16.6 7.2%
Cookies 28.8 1.5%
Energy Snacks 22.8 -3.0%
Regional Respect
Sure, the big candy names can produce big candy profit, but how about showing a little respect to the regionals?

“With so much industry consolidation, it is more and more unusual to see a freestanding family-based candy company that is thriving,” maintains Susan Karl, president and CEO of Annabelle-Candy Company Inc., makers of five regional (mostly distributed in the Western United States) bars that are holding their own in a tough market: Rocky Road, Big Hunk, Abba-Zaba, Look! and U-NO.

For that, Karl and her Hayward, Calif.-based company deserve respect, as well as for her views as a regional player in the “big-boy” candy singles world. Here's a sampling of her thoughts.

On the space challenge.
 “Since there are so many other ways/places to buy candy, the actual shelf space for in-line, full-size candy bars is being challenged by very large companies who have a lot of clout in saying what is on the racks,” Karl explains. “So the available space is less available for regional bars like mine. Too many retail outlets are only looking at national numbers — they’re overlooking the diversity of regional brands in a set.”

She’ll keep dealing.
 “We know we can get in with a good deal and make it profitable for the retailer — we have to stay on top of that. Big companies come in with deals all the time, like four for a dollar, but naturally, they’ll go off of it eventually, and that’s when we have to be on top of the game and slip in with one of our deals."

A support plan. “We might go in with a low price offering of four for a dollar, too. In that case, we consider the volume; we know we’ll do a lot of volume. But the primary function is to establish a good relationship with our retailers. We’re willing to do what it takes — we’ll step up and do ads, coupons; we want to be supportive of the retailers.

It’s not all about the front end.
 “Every new item from a big company that goes on the rack up front is one less for some regional guy,” she says flatly. “That’s why we love pallets and display shippers and end caps. I think stores that sell candy singles on pallets are doing very well lately with that. It’s high volume on count goods, and the location is typically right when you come in the store.”

Non-traditional retailers.
 “This category is not all about grocery stores and drug stores. We were in Michaels for awhile; and sometimes we’re in stores like Pier One or Cost Plus. It is my belief that we constantly pursue less traditional retail opportunities.”