While bulk candy can be labor-intensive to offer -- the merchandising image is key and the area must be kept neat -- and sales are not always sweet, stores that already feature the colorful sections will most likely continue to carry them for a number of reasons, not the least of which is the tremendous profit factor, according to industry sources.
Jim Corcoran, director of trade relations for the National Confectionary Association, Vienna, Va., estimates bulk candy as a billion-dollar category in all classes of trade, including at malls, airports and movie theaters, based on information the NCA has from the late 1990s.
"The interesting thing about bulk candy is that if you are committed to merchandising it, it can be one of the most exciting areas in your whole store. When you talk about the kid in the candy store, that's the whole idea," he said. "You get to choose a little bit of this, a little bit of that. It tugs at consumers' emotions and the impulse to buy."
Even so, sales have dropped over the past few years. ACNielsen, Schaumburg, Ill., reported that 27% of all U.S. households bought random-weight candy during 2001, the most recent figures available. This was down from the 32% reported for the year before. More than half were repeat buyers, but that, too, slipped -- from 54% in 2000 to 51% in 2001. At the same time, Wal-Mart opened Kid Connection candy sections in three of its stores at the end of 2001 and has since expanded to 88 stores.
"Bulk candy is basically flat, from our observations," said Rick Mosley, category manager for produce at Supervalu, Eden Prairie, Minn. Yet, he said, "in most cases we continue to carry it, based upon retailer request. Within the produce department, it is a gross profit generator. Our return is fairly constant, and there is not a lot of shrink, nothing like strawberries."
Bulk candy is often found in the produce section because there are generally scales there for customers to weigh the candy. Also, the color, flexibility and creativity often manifested in produce is a good fit with bulk candy, the NCA's Corcoran told SN.
Chicago-area Dominick's and Jewel both have bulk candy as part of the produce section. Schnuck's, St. Louis, keeps it away from produce and in its own area.
One of the bulk areas Supervalu has seen growth in is pistachios and peanuts, depending on the department where they are sold. Mosley thinks success in that area is driven by accessibility of the bulk bins.
Supervalu is working with key candy suppliers to look at a hybrid DSD program, Mosley explained, so that bulk candy would go through the warehouse, yet contain "all the advantages to service at the store level, like cleanup and refill."
Still, when faced with slipping sales, retailers need to find creative ways to promote a category like bulk candy.
"Bulk candy would be promoted in our regular rotation of products in our ads," said Jack H. Brown, chairman, president and chief executive officer of Stater Bros., Colton, Calif. At holidays, bulk candy is generally in the ad, he said, at so much per pound -- particularly at Christmas.
Fixturing is also a critical component, along with the variety of product, Mosley said. Supervalu uses a variety of fixtures, but Mosley noted that there has been a significant push toward more contained fixturing -- a chute so the customer can never touch it. Clear plexiglass fixturing provides a large presence, and promotes a higher degree of cleanliness and food safety, he told SN. "The days of the scoop are quickly going by the wayside," he said.
Probably 15% to 20% of Supervalu stores run a bulk candy operation, he said, varying in how many items they carry. Some have 100 to 120 items; some are only running candy or pistachios.
Traffic through the store is a driver for a bulk program, he said. Stater Bros. realizes that, and places its bulk candy section up front, facing the right entrance to the store, a highly visible, well-trafficked area.
All 156 Stater Bros. stores have bulk candy sections, but it's down slightly, even as candy as a category has gone up, said Brown.
Unwrapped candy is not the most favored by their customers, he added, and 90% of the candy in the bulk section is not wrapped. "So many have switched to buying individually wrapped candy that it has eroded sales," he said, but still, as Stater Bros. remodels -- 35 stores last year and another 35 this year -- and re-merchandises, bulk candy remains.
If sales slow in some stores more than in others, Stater Bros. would look at reallocating some of the space, "but I don't think we'd ever do away with it," Brown said.
The stores where bulk candy does best often have big families as customers. "It's a value to them," Brown said.
Seniors also are great candy customers, he said, maybe because they remember it as a childhood treat and they like to pass this treat along to children in the neighborhood or members of their own families.
Stater Bros. stores also use the chute as a dispensing method, rather than bins with a scoop.
Karen Burk, a spokeswoman for Wal-Mart, Bentonville, Ark., said the Kid Connection locations are very popular with customers in all the communities they are in. They offer a variety of bulk candy, but also gourmet chocolate, bubble gum, giant Hershey bars, PEZ dispensers, nostalgic candy and branded candy, she said, "something for people of all ages."
The 88 Kid Connection Candy Stores are dispersed throughout the country, and some of them have soda fountains. Selection varies by community.
They try to carry candies that older people grew up with that are hard to find now, Burk said, but they also have newer items, like Harry Potter candy and Barbie candy. The bulk bins contain Jelly Belly jelly beans and the M&M Colorworks, and products by Brach's and Hershey's. Usually these sections are placed toward the front, as a store within a store, Burk said.
Among households purchasing candy by random weight, the average spent was $11.92 during 2001, down from $13.70 the year before. For 2001, the supermarkets' share increased, though, to 68% of shoppers who buy bulk candy, up from 54% the previous year, according to ACNielsen.