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Retail Candy Promotions
Tom Pirovano
December 5th, 2011
Some Candy Trivia Before We Get Started
Which popular candy was named after horse?
Snickers was named after a horse owned by the Mars Family.
2
More Candy Trivia
The town of Derry Church, PA was re-named to honor which candy entrepreneur?
Derry Church is now Hershey, PA, named for Milton Hershey.
3
More Candy Trivia
How many pounds of candy are consumed each year by the average American?
•5 Pounds
•10 Pounds
•15 Pounds
•25 Pounds
4
Source: U.S. Census Bureau
More Candy Trivia
Which candy, introduced in 1896, was named after the daughter of Leo Hirshfield of New York?
Tootsie Rolls were named after Hirshfield’s daughter.
5
More Candy Trivia
What does NECCO (in Necco wafers) stand for?
NECCO is an acronym for New England Confectionery Company
6
More Candy Trivia
In which year were Hershey Kisses introduced?
•1907
•1927
•1947
•1967
7
More Candy Trivia
Which candy was created to address the seasonal decline in summer chocolate sales?
M&M’s were named after their inventors Forrest Mars & Bruce Murray
8
More Candy Trivia
Which three flavors were included in the original 3 Musketeers bars?
The 3 Musketeers bar was named for its flavors of chocolate, vanilla, & strawberry nougat.
9
More Candy Trivia
In which year did this candy ad run?
Ad for:
Peoples Drug Store
Free Lance-Star
Fredericksburg, VA
• 1911
• 1931
• 1951
• 1971 10
Topics Covered
• 2-Page Candy Promotions This Week
• Print Ads Across Retailers & Suppliers
• Web Promotions & FSIs
• Halloween Highlights
• Promoted Candy Pricing
• Ad Exclusivity
11
Front-Page Candy Ads Running This Week of 12/4/2011
12
Walgreens Candy Ads 12/4/2011, Pages 4-5
13
14
CVS Candy Ads 12/4/2011, Pages 2-3
15
Rite Aid Candy Ads 12/4/2011, Pages 10-11
Target Candy Ads 12/4/2011, Pages 14-15
16
Walmart Candy Ads Mixed with Baking Supplies 12/4/2011, Pages 22-23
17
18
Two Candy FSIs Running This Week of 12/4/2011
Half-Page FSI for Assorted Mars Candy Brands
Storck teams up with other manufacturers in Werther’s FSI including recipe ideas
Weekly Trends in Retail Candy Ad Support
1/1
/11
1/8
/11
1/1
5/111
/22/11
1/2
9/112
/5/1
12
/12/11
2/1
9/112
/26/11
3/5
/11
3/1
2/113
/19/11
3/2
6/114
/2/1
14
/9/1
14
/16/11
4/2
3/114
/30/11
5/7
/11
5/1
4/115
/21/11
5/2
8/116
/4/1
16
/11/11
6/1
8/116
/25/11
7/2
/11
7/9
/11
7/1
6/117
/23/11
7/3
0/118
/6/1
18
/13/11
8/2
0/118
/27/11
9/3
/11
9/1
0/119
/17/11
9/2
4/111
0/1/111
0/8/111
0/15/1
11
0/22/1
11
0/29/1
11
1/5/111
1/12/1
11
1/19/1
11
1/26/1
11
2/3/111
2/10/1
11
2/17/1
11
2/24/1
1
Current Year Ago
19 Week Ending Dates
Valentine’s Day
Easter (later in 2011)
Mother’s Day 4th of July
Halloween Christmas
Source: ECRM, Circular Ad Block Counts Weighted by Retailer Size.
Retailers Running the Most Candy Circular Ads
2,707
1,761
1,629
1,515
986
753
747
672
634
630
627
614
Rite Aid
Shoppers Drug Mart
CVS
Walgreens
Kinney Drugs
ShopRite
Bartell Drug
Kmart
Jewel-Osco
Giant Food Landover
Stop & Shop
Copps Source: ECRM, 52 Weeks Ending 11/26/2011
Number of Candy Ads – Brand Counts
20
The top 5 retailers with the most candy ads are all drug chains.
Retailers Growing Number of Products Promoted
52-Week Change % Chg Retailer Brand Counts Vs Ygo Vs Ygo Rite Aid 2,707 +632 +30% Bartell Drug 747 +309 +71% Walgreens 1,515 +266 +21% Kroger Stores 490 +205 +72% Copps 614 +203 +49% Giant Food Carlisle 537 +194 +57% Shoppers Drug Mart 1,761 +179 +11% Hy-Vee Food Stores 244 +167 +217% CVS 1,629 +131 +9% Kinney Drugs 986 +125 +15% Ralph's 260 +119 +84% Jewel-Osco 634 +118 +23% King Soopers 563 +117 +26% Smith's Food & Drug 550 +116 +27%
21 Source: ECRM, 52 Weeks Ending 11/26/2011
The big 3 drug chains are all promoting more candy.
52-Week Change % Chg Retailer Brand Counts Vs Ygo Vs Ygo Stop & Shop 627 -410 -40% Giant Food Landover 630 -408 -39% Albertson's (SV) 267 -211 -44% Hilander 317 -159 -33% Weis Markets 133 -154 -54% Zellers 461 -150 -25% Cub Foods 165 -138 -46% Acme Markets 440 -131 -23% Dillons 389 -128 -25% Baker's Supermarkets 388 -126 -25% Gerbes 388 -125 -24% Jay C Stores 218 -124 -36%
Retailers Promoting Fewer Candy Products
22 Source: ECRM, 52 Weeks Ending 11/26/2011
Many grocers are promoting fewer candy products.
Retailers Promoting Private Brand Candy
83.3%
53.9%
44.8%
40.0%
22.2%
18.3%
18.1%
17.6%
15.0%
14.7%
14.6%
14.1%
14.0%
Aldi*
Fresh & Easy
Macy's
Heinen's*
The Food Emporium
Shoppers Drug Mart
Loblaws
Wegmans
A & P
Superfresh
Waldbaums
Food Basics
Giant EagleSource: ECRM, 52 Weeks Ending 11/26/2011 * Aldi & Heinen’s ran <10 candy ads
Private Brand Share of Candy Ad Blocks
23
Unlike many “national brand equivalents”, private brand candy is often promoted at premium price points.
Top Promoted Candy-Makers
29.4%
18.0%
9.1%
8.1%
6.4%
3.7%
3.2%
2.6%
2.6%
2.0%
1.9%
1.6%
1.5%
The Hershey Company
Mars Chocolate
Nestle S.A.
Wrigley (Mars)
Russell Stover Candies
Private Brand Manufacturer
Cadbury (Kraft)
Farley's & Sathers
Ferrero U.S.A., Inc.
Lindt & Sprungli Usa Inc
Tootsie Roll Industries
Ghirardelli Chocolate Co.
Just Born Inc
Share of Weighted Retail Ad Blocks
24 Source: ECRM, 52 Weeks Ending 11/26/2011
The top 5 manufacturers represent 71% of retail ad support.
Ad Support Vs. Year Ago for Top Players
Share of Candy Ad Blocks Vs. Year Ago Manufacturer Current Year Ago Change The Hershey Company 29.4% 28.0% +1.4 pts Mars Chocolate 18.0% 16.2% +1.8 pts Nestle S.A. 9.1% 9.2% -0.1 pts Wrigley (Mars) 8.1% 8.6% -0.5 pts Russell Stover Candies 6.4% 5.1% +1.2 pts Private Brand Manufacturer 3.7% 3.9% -0.2 pts Cadbury (Kraft) 3.2% 3.8% -0.6 pts Farley's & Sathers 2.6% 2.5% +0.1 pts Ferrero U.S.A., Inc. 2.6% 2.4% +0.1 pts Lindt & Sprungli Usa Inc 2.0% 2.1% -0.1 pts Tootsie Roll Industries 1.9% 2.6% -0.7 pts Ghirardelli Chocolate Co. 1.6% 1.9% -0.3 pts Just Born Inc 1.5% 1.0% +0.5 pts
25 Source: ECRM, 52 Weeks Ending 11/26/2011
Hershey & Mars grew from 44.2% to 47.4% of total circular ad support.
Retail Ad Support for Gum & Mints
Mints & Gum 9.3%
Chocolate & Assorted
Candy 90.7%
Share of Candy Total Ad Support
26
Circular Ad Support Vs. Year Ago Total Candy -1.2% Gum & Mints -12.1% Choc/Asst Candy +0.1%
Candy-Makers with the Most Web Promos
21.0%
19.1%
18.1%
7.7%
4.8%
4.7%
2.7%
2.2%
1.2%
1.1%
0.9%
0.9%
0.8%
Wrigley (Mars)
Nestle S.A.
HARIBO
Mars Chocolate
The Hershey Company
Ghirardelli Chocolate Co.
Cadbury (Kraft)
Ferrero U.S.A., Inc.
Tootsie Roll Industries
Godiva Chocolatier, Inc.
Private Brand
Russell Stover Candies
Perfetti Van Melle USA, Inc. Source: ECRM, 13 Weeks Ending 11/26/2011 27
Wrigley, Nestle, HARIBO, and others are leading the category in retailer web promotions.
Share of 13-Week Candy Ads on Retailer Web Sites
Retailers Running the Most Candy Web Promos
148
130
37
32
29
26
24
22
20
20
20
19
19
Walgreens
Target Stores
Loblaws
Homeland
Family Dollar
Hannaford Brothers
Hy-Vee Food Stores
F.W. Albrecht Grocery
Fred Meyer Stores
Shoppers Food & Pharm
Adams Super Food Stores
Copps
Sun FreshSource: ECRM, 13 Weeks Ending 11/26/2011
28
Number of 13-Week Candy Ads Within 2 Clicks of Main Page
Walgreens & Target differentiate themselves with candy web promotions.
Candy FSI Support
FSI FSI Chg in Weeks Manufacturer Ads Weeks Vs Year Ago
The Hershey Company 34 20 -1 Perfetti Van Melle 21 8 +4 Cadbury/Kraft 10 9 -1 Nestle S.A. 13 7 +5 Farley's & Sathers 4 4 +4 Mars Chocolate 5 4 +4 Wrigley Jr Company 1 1 +1 DeMet's Candy Company 1 1 -1 Ferrero U.S.A., Inc. 1 1 +1 Storck USA, L.P. 1 1 -1 Lindt & Sprungli Usa Inc 1 1 -1
29 Source: ECRM, 52 Weeks Ending 11/26/2011, Top 10 Markets
Some candy-makers show a renewed focus on FSI support
Examples of November Candy FSIs
30
11/20/2011 11/13/2011
11/13/2011
11/6/2011
10/30/2011
Only Four Halloween FSIs
31
9/25/2011 (half page)
9/25/2011
10/16/2011
10/16/2011
Other candy FSIs ran in October, but only 4 with Halloween themes.
Source: ECRM, October 2011
October Share of Total Candy Feature Ads
Manufacturers Oct – 2010 Oct – 2011
Share Point Change
1 The Hershey Company 24.8% 26.9% +2.1 pts
2 Mars Chocolate 16.0% 18.4% +2.4 pts
3 Nestle S.A. 14.1% 12.0% -2.1 pts
4 Wrigley (Mars) 5.2% 5.7% +0.5 pts
5 Tootsie Roll Industries 6.6% 5.1% +1.4 pts
6 All Other Candy 33.2% 32.0% -1.2 pts
The top 2 manufacturers represent 45% of ad support up from 41% in October 2010.
October Share of Retail Web Promotions
Source: ECRM, October, 2011
41.1%
13.8%
13.1%
6.9%
5.3%
2.2%
2.2%
Nestle S.A.
Wrigley (Mars)
HARIBO
Mars Chocolate
The Hershey Company
Private Brand
Ghirardelli Chocolate Co.
Share of Total Web Promotion Ad Blocks
Nestle made web promos a priority for Halloween.
Walgreens Web Promo 10/10/2011
October Candy Ads By Retailer
73.7
56.1
51.6
42.3
35.8
35.8
32.4
32.1
26.6
25.9
59.4
40.3
37.3
38.4
31.4
40.2
21.6
34.9
26.1
19.2
Shoppers Drug Mart
Rite Aid
CVS
Walgreens
Jewel-Osco
Kinney Drugs
Copps
Bartell Drug
Farm Fresh
Owen's Market
Total Candy Ad Blocks
Oct-2011Oct-2010
Source: ECRM, October 2011
Early Halloween/Autumn Candy Promotions
Rite Aid -
08/14/2011 - pg 4
Walgreens
7/17/2011 - pg 3
Albertsons LLC -
08/24/2011 - pg 7
Fresh Market - Salt Lake City
08/17/2011 - pg 3
Tops Markets -
08/21/2011 - pg 7
Share of Ad Space Makes a Difference
36
Both ads ran the week before Halloween, 2011.
2009: Walmart: $2.50, Target: $2.49
2011: Walmart: $2.48, Target: $2.49
The Dangers of Predictability 2010: Walmart: $2.50, Target: $2.49
Walgreens & CVS Deliver Lower Halloween Candy Prices than Walmart & Target for 2011
38
10/23/2011 – Walgreens $1.99 with coupon
10/23/2011 – CVS
4-for-$7 with Reward Bucks
Déjà Vu at Target
39
2009 2010
2011
The Same Thanksgiving Ad Three Years in a Row
What can we learn from other seasonal promotions?
Candy Ads By Price Point
3.8% 4.1%
50.0% 50.4%
17.7%
26.9% 30.1%
10.4% 11.0%
29.0%
42.3% 26.0%
22.6% 8.7%
19.0%
26.9% 39.7%
17.1% 29.9% 34.2%
Walmart Target Walgreens CVS Rite Aid
$3.00+
$2-$2.99
$1-$1.99
<$1.00
Walgreens and CVS are focused on smaller pack sizes at lower price points.
Source: ECRM, YTD Through 9/3/2011
Price Points
Share of YTD Candy Ads
40
Candy Promotions By Pricing Type
Candy Price Buy N, Other Promo Type Point N for $X Get X Save X% Save $X Promo
Walgreens 47.7% 51.2% 0.6% 0.3% 0.3%
CVS 27.2% 63.0% 9.6% 0.2%
Rite Aid 57.9% 36.8% 3.9% 0.6% 0.4% 0.4%
Walmart-US 100.0%
Target Stores 51.4% 47.2% 1.4%
Kmart 35.4% 61.7% 1.5% 0.5% 1.0%
Kroger Stores 27.5% 71.0% 1.5%
Safeway Stores 22.1% 69.1% 7.4% 1.5%
Dollar General 80.9% 19.1% Source: ECRM, YTD Through 9/3/2011
% of Retailer Candy Ads
Multi-unit candy pricing is common across retail channels.
41
Retail Circulars Vary By Geography
42
Example: CVS Circular 12/4/2011
Most Markets,
Price: 2/$5 Some Markets,
Price: $2.22
New York City, Different Brands
Dollar 52-Week Avg Unit Rank Produce Description DOLLAR Sales Price UPC Code
#1 Hershey's Milk Chocolate, 6-ct $78.3 MM $3.36 34000 29005
#2 Snickers Bar, 2.07 oz. $75.2 MM $0.68 40000 00102
#3 Reeses Peanut Butter Cup, 1.5 oz. $52.1 MM $0.67 34000 00440
#4 Snickers Fun Size 11.18 oz. Bag $50.8 MM $2.71 40000 15140
#5 Reeses Pnt Btr Cup, 10.5 oz. Bag $46.3 MM $2.61 34000 40211
#6 M&M Peanut, 1.74 oz. $44.4 MM $0.68 40000 00032
#7 Kit Kat, 1.5 oz. $43.7 MM $0.69 34000 00246
#8 Kit Kat, 10.78 oz. Bag $43.2 MM $2.66 34000 08752
#9 Hershey's Milk Chocolate, 1.55 oz. $43.2 MM $0.69 34000 00240
#10 M&M Peanut, 12.6 oz. Bag $41.6 MM $2.99 40000 24887
Source: Nielsen, Total U.S. Food/Drug/Mass Excluding Walmart, 52 Weeks Ending 8/6/2011 For more on Nielsen data, contact Marc Santos ([email protected] or 847-605-5473)
Top-Selling U.S. Candy Items Through 8/6/2011
The top 10 in dollar sales include 5 singles and 5 multi-packs.
43
Candy Pricing By Retail Channel
44
Avg Unit Price Price
Product Description Groc Drug Advantage Manufacturer
#1 Hershey's Milk Chocolate, 6-ct $3.41 $3.72 Supermarkets Hershey
#2 Snickers Bar, 2.07 oz. $0.69 $0.65 Drug Chains Mars
#3 Reeses Peanut Butter Cup, 1.5 oz. $0.66 $0.68 Supermarkets Hershey
#4 Snickers Fun Size 11.18 oz. Bag $2.74 $2.69 Drug Chains Mars
#5 Reeses Pnt Btr Cup, 10.5 oz. Bag $2.60 $2.72 Supermarkets Hershey
#6 M&M Peanut, 1.74 oz. $0.69 $0.66 Drug Chains Mars
#7 Kit Kat, 1.5 oz. $0.68 $0.71 Supermarkets Hershey
#8 Kit Kat, 10.78 oz. Bag $2.63 $2.83 Supermarkets Hershey
#9 Hershey's Milk Chocolate, 1.55 oz. $0.67 $0.72 Supermarkets Hershey
#10 M&M Peanut, 12.6 oz. Bag $3.15 $2.76 Drug Chains Mars
Source: Nielsen , 52 Weeks Ending 8/6/2011
Candy Ad Density is Growing
-1.2%
+10.4%
Weighted Ad Block Counts Weighted Brand Counts
45
Retailers are promoting more candy products with slightly fewer candy ads.
Multiple Manufacturers Sharing Candy Ads Running This Week of 12/4/2011
46
“Non-Exclusive” ads may drive volume, but not market share.
Ad Exclusivity Varies Across Candy Makers
19%
25% 25% 26% 29% 30%
32% 33% 34% 34% 34% 36% 36% 37% 38% 39% 40% 42% 43%
45% 47%
Am
erican
Licorice
Ferrero
U.S.A
., Inc.
The H
ershey C
om
pan
y
Ru
ssell Stove
r Can
dies
Farley's & Sath
ers
Cad
bu
ry (Kraft)
Go
diva C
ho
colatier
Wrigley (M
ars)
Mars C
ho
colate
Too
tsie R
oll In
du
stries
Storck U
SA, L.P
.
DeM
et's Can
dy
Elmer C
and
y
Just B
orn
Inc
Top
ps C
om
pan
y Inc
Perfetti V
an M
elle
Lind
t & Sp
run
gli
Ferrara P
an C
and
y
R.M
. Palm
er
Jelly Be
lly Can
dy
Gh
irardelli C
ho
colate
Percent of Ads Shared with Other Manufacturers
Source: ECRM, 52 Weeks Ending 9/3/2011, Select Manufacturers 47
Fewer Shared Ads, More Exclusivity
More Shared Ads, Less Exclusivity
Top Manufacturers Track Ad Exclusivity By Retailer
Wrigley Russell Cadbury Lindt & Tootsie Hershey Mars (Mars) Stover (Kraft) Ferrero Sprungli Roll Walgreens 58% 59% 74% 54% 56% 97% 93% 97% CVS 33% 49% 37% 55% 39% 86% 96% 86% Rite Aid 79% 83% 92% 73% 73% 85% 96% 93% Walmart-US 16% 50% 25% 100% 0% 0% 50% N/A Target Stores 79% 70% 60% 100% 68% 100% 85% 75% Kmart 53% 73% 78% 32% 25% 100% 100% 17% Meijer 49% 60% 100% 78% 83% 50% 100% 80% Dollar General 43% 46% 0% 100% 50% N/A N/A 88% Dollar Tree 29% 50% 50% N/A 17% N/A N/A 0% Family Dollar 60% 57% 36% N/A 60% 50% N/A 50% Kroger Stores 30% 56% 42% 67% 50% 0% N/A N/A Safeway Stores 31% 50% 20% 0% 40% 0% 60% 0% Albertson's (SV) 8% 14% 19% 0% 11% 0% 25% 25%
Percent of Ads Shared with Other Manufacturers
Source: ECRM, 52 Weeks Ending 9/3/2011, Select Manufacturers 48
Promotional Reflections Report Library
49
Dozens of industry studies are available for ECRM event attendees at: www.PromotionalReflections.com
Key Takeaways
• Top 5 retailers promoting candy are all drug chains
• Walgreens/CVS/Rite Aid – increasing candy ads
• The top 5 manufacturers – 71% of candy ad support
• Total candy ad block counts - flat vs. year ago
• Gum & mints ads – down 12.1% vs. year ago
• Higher ad density – more brands sharing ads
• Retailers leading web promos – Walgreens & Target
• Mfr’s leading web promos – Wrigley, Nestle, HARIBO
• Renewed focus on FSI’s in 2011
50 More
More Key Takeaways
• Hershey & Mars – increased Halloween ads
• Predictability is risky – Target Halloween example
• Top drug chains beat Walmart & Target on Halloween pricing
• Walgreen & CVS – 50% of candy ads <$1.00
• Multi-unit pricing (N-for-$X) – huge for candy
• Multiple circulars versions – vary by geography
• Pricing by channel – Mars vs. Hershey example
• Ad exclusivity – worth tracking & optimizing 51
