Candy & Snack Report: Second That Emotion

An angel with a celery stalk on one shoulder; a devil with a candy bar on the other. It's an eternal struggle, and we all know which side usually wins at home, at work, and especially while shopping.Even highly health-conscious shoppers who head to the store with a locked-down list are susceptible. "When they walk down that snack aisle, the emotional element of snacking takes over," says Alison Chaltas, executive vice president at research and consulting firm GfK Interscope, Westport, Conn. "People might go in with the intent of buying a better-for-you cracker product, and they'll buy that for the kids, but they'll then get enticed to buy a sweet chocolate or a more indulgent product because something struck their fancy."Manufacturers and retailers need to know how to strike the right balance when weighing impulse appeal, immediate consumption, trip missions and consumer concerns about value in a society technically out of a recession yet still fiscally conservative."It's not a functional purchase; for the most part, it's an emotional purchase. Those brands and retailers that can combine the emotional desire for snacking with the more intellectual hope of better-for-you products are the ones that are going to win," says Chaltas. "We are seeing from a shopper research standpoint an awful lot of both retailers and manufacturers investing in total snacking shopper research: observing shoppers and understanding why they went into the store, what was on their list, and when they decided to buy that snack either deliberately or on impulse, intercepting them to understand why. In-store is definitely the best methodology for immediate consumption research because it is very difficult to ask people online or in focus groups why they buy certain immediate consumption snacks. It's such an impulse-oriented decision."The Hershey Co., Hershey, Pa., in the past year has trumpeted a consumer-research initiative called Insight Driven Performance (IDP), which the company says will guide its future. Melding proprietary consumer-behavior studies with retailer knowledge, IDP can best be identified in stores through Hershey's collaboration with Kraft Foods for a S'mores campaign, which began in 2007 when Hershey identified a lull in chocolate purchases in the May through August period."We've researched the category on how the consumers act and behave within the confection category and created the demand landscape based on shopper activities," says Mike Depanfilis, Hershey's vice president of shopper marketing. "Then we've taken the next step with trip missions and usage occasions. Now that you understand who's buying and what they're buying and why they're buying, you then get into a deeper understanding where they're going to buy. That will allow us to target more effectively and create crisper communication that resonates with shoppers because we better understand who they are, where they're going and why they're going there."It's an evolution of our category management approach. This is not scratching the surface of a demographic segmentation study. It centers around this notion of customer collaborative planning. It's really about changing how we plan the category with our customers. It's a longer-term vision than the quarterly plan of what items or what brands you're going to promote this month or next month and at what rate. This is about what drives the category demand and how we can partner with our retailers to capture that demand."The S'mores promotion is designed so that retailers with private-label graham crackers and/or marshmallows can feature them with Hershey's custom display units and pallets. If the retailer does not have those products, Hershey and Kraft have a separate display, featuring six-packs of Hershey's milk chocolate bars alongside Kraft's Honey Maid graham crackers and Jet-Puffed marshmallows.Depanfilis explains IDP with another example, the Easter holiday. Hershey's strategy is to feature different items at different times during the eight-week Easter window after Valentine's Day. "When you're in the beginning of the season, candy ball items, like wrapped candy, Kisses, Hershey Miniatures, are more popular as you're farther out from the season, as people start to decorate and get into the seasonal mode," he says. "As you get closer to the season that's where Easter baskets start to occur. And as consumers shift from one mode of shopping to another they will now start to pick up the novelty items, the instant consumable: the Reese's eggs, the Cadbury eggs, the chocolate bunny. In an ideal world you'd love to have prominence of the items that are more relevant during the eight-week window of the season, so eight weeks out, seven weeks out, six weeks out, you may see more wrapped candy, the candy dish items, and as you get closer in you see more emphasis on more novelty and single-serve items."While supermarkets and mass merchants have the space for displays focused on the building of Easter baskets, convenience stores do not. "They'll focus on the novelty and the instant consumable, so what we'll do is merchandise our Cadbury eggs and Reese's eggs very early in the year because we know they have a different usage occasion, they deliver a different eat," says Depanfilis. "We can grow incremental sales by having items that deliver against a different usage occasion. Reese's eggs for Easter do not necessarily cannibalize at a very high rate to Reese's peanut butter cups, so we can go to the retailer with a strategy of leveraging the power of Reese's with the core brand advertising and the Easter-specific advertising, utilize both those items, grow them incrementally because the occasions are different, insulate the interaction between them. C-stores use this strategy very aggressively, and they will use it around our Reese's eggs for Easter and our Cadbury eggs."Options Other than PriceMarketing research and consulting firm SymphonyIRI Group, Chicago, which has conducted separate studies in the past year about merchandising and the snacks category, identified a diminishing effectiveness of price-only promotions. Susan Viamari, editor of SymphonyIRI's Times and Trends newsletter, says manufacturers and retailers can keep some of their margin with just a little more creativity. Chocolate candy and salty snacks ranked second and third behind carbonated beverages in merchandising activity in the 52 weeks ending Oct. 31, 2010, while crackers were seventh."Price-only actions are grabbing consumers and they do move the needle, but what we found is this price-only type action is not moving the needle as much as it had in the past," Viamari says. "What we're trying to impart to CPG marketers is there are other options that are also very powerful. If you look at [sales] lift on price-only action, only 1% of categories got lift of 100% or more, but if you look at feature and display combined, 85% of categories saw lift of 100% or more. That says to marketers don't just slash prices. A, you're not going to get the lift you would from other tactics, but, B, you're eroding razor-thin margins and probably brand equity as well because you're training consumers to seek your product out at a lower price, saying it's not worth as much. Why are you giving it away when you could be connecting with consumers in other ways?"Somerset, N.J.-based Ferrero, manufacturer of Tic Tac mints, connects with consumers with its annual "Shake, Share & Care" promotion, which benefits New York-based nonprofit CancerCare and originated with a brand manager who had a family member battling cancer. Taking advantage of Tic Tac's see-through packaging and the power of social media in its quest for arresting and secondary placements, Ferrero uses the pink-colored, pink grapefruit-flavored mints, which were first created in 2008 for a Women's Healthcare Month promotion at Walmart. In the fall of 2010, Ferrero asked its Facebook fans to share stories of their experiences with cancer, whether as a victim or caregiver. Ferrero then donated $5 in the name of each storyteller (up to $100,000) to CancerCare in addition to making a one-time $100,000 donation. Freestanding inserts spread the word and carried coupons, while in-store Ferrero used themed floor displays and counter units. New York-based MSLGroup Americas handled the creative.Ferrero also used its see-through packaging for a "Holiday Twist" promotion. Ordering the displays was the only way for retailers to get the CancerCare and Holiday Twist products, says Tic Tac category manager J. Noah Szporn. "What's driven the gum/mint category the last three years was both flavor and flavor sensation. The great thing about what Tic Tac's able to do is the color of our product is almost as impactful as the flavors. We're one of the few gum, mint or candy products you can actually see the product through the packaging. We're able to really leverage that color to help with a seasonal or in-store display. We've done Easter programs in years past where we had orangey-green pastel colors."We're able to add that to the whole in-store impact. So not only do you have a themed display and a themed consumer event, but the product is actually visually tied to the event, which helps with the sell-through because it's something unique and different," says Szporn. "For us, it's critical because the challenge is, how do we get out of the front end and into incremental locations in the store? It is such an impulse purchase, and the impulse can occur at the register, but the impulse can also occur when you're walking at the end of the beverage aisle and you see a Tic Tac [display] and say, 'I want that.'"Connecting with ConsumersAs another example of manufacturers connecting with consumers, Minong, Wis.-based Link Snacks, makers of Jack Link's beef jerky, cross-promoted with Chicago-based MillerCoors' Keystone Light beer in the spring for a "Play It Smooth" campaign. Consumers could punch out a perforated hole on the top of packages of 30-, 24-, and 12-packs of Keystone Light and make a game of tossing in a small bag of Jack Link's. Inserts featured "Canhole" tournament brackets, details on the game, and "coaching" tips from Keith Stone, a character featured in Keystone's "Always Smooth" campaign. Additional promotional support included an online Canhole game with Keith Stone and Sasquatch from Jack Link's "Messin' With Sasquatch" campaign, banner ads, social media support, out-of-home and radio advertising, and an in-store Jack Link's coupon."Our goal is to really understand the consumer dynamic here," says Jeff LeFever, marketing director for Jack Link's. "Although beef jerky has become a much more mainstream snack, it can also be viewed as an impulse purchase. In light of that, we need to continuously generate excitement to help trigger purchase in-store. We are continually providing retailers with a variety of merchandising options including special racks, endcap displays, point-of-purchase counter displays, eye-catching temporary shipper displays, door and floor clings, danglers and a variety of other POS, all to help attract consumer attention, increase impulse sales, and ultimately increase rings at the register."Mars Inc.'s Wrigley business invests heavily in attracting convenience store consumers, says Jennifer Jackson-Luth, senior manager of marketing communications for Wrigley. A busy 2011 includes a "MyExtra" campaign for customizable packs of Extra gum, and promotional partnerships with Viacom's MTV and Marvel Studios/Paramount Pictures' "Captain America: The First Avenger", which releases July 22. In addition to counter and floor displays, standees, shelf danglers, ATM signage, cooler clings, and beverage fountain signage, Wrigley recently began advertising on soda fountain beverage cups as well as using 3-D lenticular printing on some of the in-store signage.Kraft/Nabisco's Wheat Thins crunch stix leverage the product's unique packaging in merchandising. The box can be manipulated with foldouts to form a wide-mouth bowl. New York-based Momentum Worldwide helped with the project, says Melissa Renny, senior associate brand manager for Wheat Thins. She says the Wheat Thins brand has shifted its target demographic younger (to ages 25-45) and has been active on Facebook and Twitter. "We knew from research that the shape of the packaging was compelling to consumers and so we chose to highlight it in-store at the point-of-purchase." Renny says the brand is currently sampling Wheat Thins "crunch stix" in almost 4,000 stores across the country as part of launching two new flavors.ConAgra Foods, Omaha, Neb., is using QR codes with its "Pop Up Bowl" campaign for Orville Redenbacher. Consumers can scan the code to "see what pops up," says Mary Westerhaus, senior director of in-store marketing. Much like the box for Wheat Thins, the popcorn's packaging becomes the bowl when heated."We have an internal guiding principle we call 'Display with a Purpose,'" Westerhaus says. "We create our displays with purpose – understanding the value, the measurement of success and the margin profile. We have creative principles that follow the 3, 4 and 5 concept; 3 seconds to understand, 4 paces away to engage, and 5 words or less. Every display we put in the marketplace goes through a gate process and, with a few exceptions, reflects our purpose and core creative principles. It is important for the consumer to see our products as meal solutions – to see beyond the product to the end product. When she sees a can of tomatoes, she sees endless meal possibilities: pasta, chili and more."Among retailers, Target used its Facebook and Twitter sites to build awareness of an exclusive Easter collaboration with Godiva Chocolatier, New York. The creative centerpiece of the in-store signage for Target's "Bunnylicious" program was the limited-edition Godiva milk chocolate Easter bunny, which could be found only at Target beginning March 13. Godiva's existing line of premium chocolates was also available during the promotion, which ended on Easter (April 24). The Godiva Easter assortment was prominently displayed in the seasonal department of stores, with its own endcap display. There was a print campaign from Target to support the collection, with ads running in publications such as Vanity Fair and InStyle. For three weeks prior to Easter, there was a Godiva microsite on Target.com that showed the full assortment and offered printable coupons. Additionally, the limited-edition chocolate bunny was featured on the cover of Target's circular.

Candy & Snack Report: Second That Emotion

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