2006 AWMA Summit And Business Exchange Puts Key Issues In The Spotlight
Direct Line: (903) 965-9300
Direct Line: (903) 965-9300
I was honored to moderate a session on “Candy Trends and Merchandising in Convenience” at the event held recently in Lake Las Vegas. Representatives from Atkinson Candy, Cadbury Adams, The Hershey Company and Masterfoods shared insights and knowledge.
Definitely a lively, opinionated group — which is what every moderator hopes for! The topics addressed included the participants’ take on what’s hot. That list includes dark chocolate, of course, 100-calorie-pack offerings, king-size and, as always, paying attention to the front end. The many new offerings in the gum category are worth noting as well. Discussions focused on the need for displays and multiple locations in the stores, creative ways to merchandise, the importance of new products and, at the same time, the necessity of paying attention to the core items. The panelists also had the opportunity to let the distributor audience know what kind of tools and information they have available that might not be taken advantage of.
Distributors face many challenges, and listening to other presenters at the meeting, it was apparent that profitability is a major issue. Confectionery delivers great margins and high turns and, based on the discussions, it was clear that there is still a lot of room at the top and that the category is not fully optimized.
About 65 percent of the estimated 140,000 convenience stores are independents — with 10 stores or fewer — and reaching those outlets is no easy task. It’s a catch 22 situation. Manufacturers raise their minimum orders in order to maintain profitability and efficiency. That puts smaller wholesalers at a distinct disadvantage. And, of course, distributors also are raising their minimums for the same reasons, which means that small retailers have a problem getting the product selection they’d like.
No simple solutions. Of course, cash and carry and wholesale clubs help bridge the gap. But their selection is generally limited, and often only the confectionery ‘top sellers’ are available. And that means manufacturers who haven’t yet reached top sales levels are not able to get their products in the mix and subsequently don’t get the distribution they need to succeed. Ultimately, the consumer doesn’t have access to many of the great candy products that are out there!
On the good news side, there’s a lot of creativity, flexibility and hard work going on. Each step of the way there are people and companies finding ways to make it happen.
The focus of the AWMA meeting was primarily on convenience distributors. That is no longer necessarily an accurate description of the attendees given that many of them do not focus exclusively on the convenience channel. Just as at retail there is a blurring of the channels, anywhere there’s a cash register there’s a wholesaler — whether defined as specialty, grocery or convenience — that is seeking an opportunity to sell product.
So let’s hear it for the distributors! They really need more appreciation.
And because we know that to be true, you will see a new section in Confectioner starting in this issue. It’s called ‘The Middle Ground,’ and in it, we will showcase both comments from and profiles of distributors of all kinds.