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The sweet spot

Confectionery makers are sweetening the deal with premium products and nostalgic flavours that conjure up childhood memories

Ivan Fleury knows how fussy people can be over their candy. As manager of Moncion Grocers' Petawawa Market, located in Petawawa, Ont., most of Fleury's customers are military families who've arrived from all over Canada to work at the local Canadian Forces base. "A lot come from down East and some are from the West and they bring their particular likes from different areas with them," he says. "It's not easy to get them to buy new confectionery products since they prefer to stick with their old favourites."

Luckily, the confectionery category is broad enough to match the likes of just about everyone, whether they want premium dark chocolate tablets and exotically flavoured candy or, like Fleury's customers, they're looking for packs of sour candies and cheap chocolate bars. And Canadians definitely have a penchant for sweets. They spent nearly $2 billion on confectionery sold across all retail channels, according to Nielsen data for the year ending June 4, 2011. Dollar and unit volume each grew three per cent.

Total confectionery is one of the Top 10 categories in grocery stores and is providing strong growth, says Ken Mahon, seasonal confectionery channel leader at Nestlé Canada. "Consumers are looking for convenient, healthy options, enjoyment and premium products. Confectionery is a category that is well-suited to address all of these needs. It's a very attractive category because it is highly expandable, highly impulsive and has such strong penetration."

While Fleury's customers would rather buy their candy from the front end, and are motivated by discounts and leery of new products, that's certainly not the case everywhere. "Our consumer research shows that price and brand are the lowest attributes when consumers are making their purchase decision," says James Benson, marketing director at The Allan Candy Company. "Many people are looking for quality and are prepared to pay premium prices for confectionery. This makes them open to trying new products, so this is a very innovation-friendly category."

Instead of price and brand, Benson says mood and occasion are stronger factors in confectionery purchases. Therefore, new products launching in confectionery use different flavours to connect emotionally with consumers. For example, carnival-inspired flavours, such as cotton candy, caramel popcorn and lemonade, link to nostalgic feelings of childhood.

Another trend gaining momentum is bagged pieces.This format in chocolate has experienced double-digit growth, fuelled by strong innovation and new display vehicles, Mahon says. "From a retailer's perspective, pieces is the most impulsive format (next to single bars) so it lends itself well to supporting a secondary display."

Innovation, as always, is a significant driver of category growth. And marketers are counting on new flavours and formats to keep confectionery sales strong.

As for Fleury, he offers new products in seasonal displays to differentiate Moncion Grocers from its competitors. "I try to bring in different varieties that are out of the ordinary, such as big, jumbo marshmallows," he says. "It's one way to grab customers' attention and bring in more sales."

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