Candy is a sweet spot for drug retailers. The drug channel is outperforming food and mass in total category dollar sales, according to data from the National Confectioners Association. “Total category dollars are up 2.6%, while drug is up 3.3%,” said Jenn Ellek, a spokeswoman for NCA. “Drug stores do a great job with promotion, in-store display and multiple points of interruption.”
The chocolate category has been a top performer for the drug channel. Tim Quinn, VP of trade development for Mars Chocolate North America, said that seasonally wrapped chocolate and stand-up bags/pouches are particularly strong in the channel. “We’re seeing an increased consumer demand for bite-size unwrapped chocolate,” said Quinn. Mars recently introduced M&M’s Snack Mix, M&M’s Stand-up Pouches and Dove milk chocolate-covered raisins and peanuts.
Ellek said the drug channel could grab a bigger share of non-chocolate sales with increased selection, sharper price points and increased promotion during the summer months.
A good assortment of higher-priced novelty items with solid play value also can help retailers differentiate themselves. “About 80% of what stores carry are must-haves, but there’s a lot of flex in the remaining 20%. Novelty plays a big part in that,” said Rob Auerbach, president of Candyrific.
Auerbach said novelty items in the $3 to $4 price range are an affordable luxury for consumers and provide large margins for retailers. The company will focus on Disney/Pixar’s “Monsters University” products next year.
The article above is part of the DSN Category Review Series. For the complete Candy Buy-In Report, including extensive charts, data and more analysis, click here.