Enjoying longer promo periods, seasonal candy ups the sales ante

Drug Store News,  March 23, 2003  

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Seasonal candy, which accounts for some 35 percent of confectionery sales, is gaining a reputation as a testing ground for new products an d as a means for companies to extend sales of their everyday brands with limited-edition offerings.

Though sales of seasonal items were flat last year at $6.34 billion, due in part to the negative impacts of an early Easter, many hoped this year's strong Valentine's Day was a sign of better times.

"Sales in 2002 were kind of a mixed bag," said Susan Fussell, director of public relations for the National Confectioners Association. "Seasonal sales are important for the entire industry That's a huge chunk of candy sales."

Halloween historically has been the main moneymaker for retailers, accounting for 30 percent of seasonal candy sales, followed by Easter, Christmas and then Valentine's Day. By channel, mass commands the bulk of seasonal sales, with drug stores coming in second. But a drug stores had some of the strongest gains last year, according to the NCA, with Halloween candy sales up 5.3 percent, Christmas candy sales up 1.2 percent and Valentine's Day 2002 candy sales increasing 6.7 percent compared with 2001. (Sales figures for this year were unavailable at press time.)

"Drug has been a growing area for us seasonally because [drug retailers] tend to be good merchandisers," said Matt Pye, marketing director of marshmallow products for JustBorn, best known for its Easterthemed Peeps treats.

Holidays have become major promotional events for drug stores, Pye said, though strategies vary. Walgreens, for example, emphasizes items that can be promoted at $1 or two for $1, while Eckerd may vary more in price points. For the mass channel, Pye said 99 cents has been the price point most sought.

And while the shelf space devoted to seasonal items has not changed much, the time periods for promotion have. Many vendors now are merchandising Halloween earlier to tie in with back-to-school promotions, while Easter is being stretched out with springthemed candy products. As a result, seasonal promotions have turned into nearly year-round programs, with patriotic holidays, including Memorial Day, the Fourth of July and Labor Day, continuing this trend into summer.

JustBorn's marshmallow treats are a perfect example of this expansion in action. The original Peep yellow chick has given way to a variety of colors, shapes and flavors for holidays--from cocoa bats at Halloween to orange cream eggs for Easter and cookie dough-flavored cutouts during Christmas. JustBorn also sells patriotic-themed star treats to tie in with holidays like Independence Day and this year, for the first time, will be debuting Peeps in orange, red and patriotic colors for the respective periods of Halloween, Christmas and summer in celebration of Peep's 50th anniversary.

"A lot of it has to do with what the consumers have allowed us to do," JustBorn's Pye said. "The demand was there to allow us to go and develop different shapes for different seasons."

For R.M. Palmer, which depends on holiday sales for 80 percent of its business, innovation has been a driving factor in the face of growing emphasis by the major candy companies on seasonal offerings. Nestle, Mars and Hershey dominate the seasonal market and often use it as a testing ground for new items.

One Christmas item that was a huge hit for Palmer was a miniature tackle box that featured different compartments filled with candies, such as chocolate sinkers and gummy worms. While there are multiple configurations on the chocolate bunny, Palmer is taking Easter one step further with a foil-wrapped item called Tummy Bunny that features jelly beans or candy carrots inside.

Meanwhile, Palmer's licensing deal with NASCAR has turned into a lucrative seasonal business, according to Jim Tucker, senior vice president of sales and marketing. One new item this Christmas will be specific driver-themed cooler cups filled with car-shaped chocolates wrapped in foil that match that driver's car number.

As for the major candy companies, a sampling of new items from Hershey for Easter includes Bubble Yum eggs, Reese's eggs and extra-cream y solid milk chocolate eggs. Limited-edition Kisses in dark chocolate and chocolate mint promoted last Christmas were a huge hit, contributing to an overall 11 percent sales gain in the Kisses line last year for Hershey.

Nestle also has used holiday items to test new forms. and flavors of its key candy brands, such as Sweetarts. Spokeswoman Tricia Bowles said new Christmas items last year included candy canes and lollipops in Sweetart flavors, while this Easter consumers will see the Sweetart brand expanded to jelly bean form.

"We bring the power of a well-known brand and marry it with the traditional candy aligned for that season to get a very successful product," she explained.

To correspond with patriotic holidays, Sweetarts, Spree and Nestle's Crunch all have launched in red, white and blue packaging or colors, Bowles added.