Maximizing Sales & Profits With Seasonal Candy

Transcription

1 NATIONAL NATIONAL SALES SALES EXPO EXPO Maximizing Sales & Profits With Seasonal Candy National Sales Expo

2 Seasonal Candy Sales Category Insights The Seasonal Shopper and Path to Purchase Instore Execution Valentines 2019 How to Win? Key Strategies For The Season Plan for the end of the Season Store Classification definition Planogram Segments Planograms One Size doesn t fit all Item Assortments Must Have Items Key New Items Key Pallet & Shippers Program Timelines & Deadlines 2

3 Category Insights 3

4 Total Confection Sales NATIONAL SALES EXPO 2018 Seasonal Candy represents 27.4% of all Confection sales in xaoc Supervalu Enterprise trails xaoc 3.3% in total seasonal sales CMG = Candy, Gum & Mint Category Nielsen 52 weeks ending

5 Candy Household Penetration and Frequency Seasonal Candy has a Higher household penetration Seasonal Candy consumers spend more $$ in the category and buy more frequently 5

6 Seasons expand Total Store Sales and Basket Size $5.1B 65% Larger Baskets 82% of consumers buy Seasonal Candy VALENTINE S DAY EASTER SUMMER HALLOWEEN HOLIDAY $70.26 $70.20 $73.63 $71.28 $72.88 $44.72 $42.36 $41.85 $42.27 $42.81 Out of Basket In Basket Out of Basket In Basket Out of Basket In Basket Out of Basket In Basket Out of Basket In Basket Source: IRI Panel, Seasonal Flags ending 12/31/17; Wiser Anywhere Missions 6

7 Candy is the TOP PURCHASED category across each season VALENTINE S 45% DAY 38% 25% 65% EASTER 25% 20% SUMMER 44% 8% 5% HALLOWEEN 69% 32% 27% HOLIDAY 48% 43% 28% Candy Cards Flowers Candy Eggs Plastic Eggs Candy Patio Lawn & Garden Candy Indoor Décor Outdoor Décor Candy Gift Card Gift Wrap Source: Hershey s Seasonal Trackers

8 Seasonal Candy is highly impulsive Display is critical to successful seasonal sales, with up to 48% of the purchase being unplanned. Everyday and seasonal confections are highly impulsive 8

9 Seasons drive INCREMENTAL SALES to the everyday business Seasonal Sales by Week US MULO+C; Calendar Year 2017 Source: IRI Panel, Seasonal Flags ending 12/31/17 9

10 Don t run short! NATIONAL SALES EXPO % of sales done the last week of the season! 10

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12 Seasons expected to continue growth through % Of CMG $5,164 $5,170 $5,010 $4,970 $4, * 2019* 2020* Source: IRI Panel, Seasonal Flags ending 12/31/17 Total $ (in Millions) 12

13 The Seasonal Shopper and Path to Purchase 13

14 There are 3 main drivers of SEASONAL SATISFACTION 1 Total Store Look & Feel 2 Seasonal Selection 3 Seasonal Value Omni Channel Total Store Activation Easy to Find Convenient Location A good selection of items Unique offerings Wide range of meal and entertaining needs Top Brands for the Season One Stop Shop Good prices Source: Hershey s Seasonal Tracker

15 Shopper Perception of Seasonal Satisfaction 1 Total Store Look & Feel 2 Overall Selection 3 Seasonal Value DOLLAR STORES DOLLAR STORES DOLLAR STORES Source: Hershey s Seasonal Trackers

16 Supervalu retailers performing well in Halloween; with opportunities to take learnings to other seasons 12.0% 2017 Retailer Market Share Largest Opportunity 12.5% 11.9% Non Seasonal Share: 14% 10.8% 11.1% Valentine's Easter Summer Halloween Holiday Dollars $6.3M $12.6M $17.5M $18.4M $13.5M Source: IRI 16

17 Plan around SEASONAL SHIFTS YEAR DAY OF WEEK SUPER BOWL MARDI GRAS YEAR DAYS CHANGE YEAR DAYS PRE LABOR DAY 2014 Fri 2/2 3/ Sat 2/1 2/ Sun 2/7 2/ Tues 2/5 2/ Wed 2/4 2/ Thu 2/3 3/ Fri 2/2 2/ Sun 2/7 2/ Mon 2/6 3/1 Day of Week, Super Bowl and Mardi Gras/Lent can have an impact on Valentines Day Easter timing will continue to shift resulting in strong tailwinds or gaps in the plan Days post Easter to pre Labor Day can impact Summer selling performance YEAR DAY OF WEEK DAYS POST LABOR DAY 2014 Fri Sat Mon Tues Wed Thu Sat Sun Mon 56 Day of Week and Days post Labor day can have an impact on Halloween s performance YEAR DAY OF WEEK DAYS POST THANKSGIVING 2014 Thu Fri Sun Mon Tues Wed Fri Sat Sun 31 Day of Week and Days post Thanksgiving can have an impact on Holiday's performance 17

18 Winning early with IC critical to topline and bottom line expansion 36% of Easter Reese s and Cadbury Egg sales are done before Valentine s Day 81.4% Easter IC Sell Thru by Set Date US Retailer; Easter % 76.8% 66.7% 38.8% 1/1/2017 1/15/2017 1/22/2017 2/12/2017 3/5/2017 Stores that set Easter IC in early January have significantly higher sell thru s 18

19 Top Brands of the Seasons NATIONAL SALES EXPO

20 Instore Execution 20

21 Key Planning Pillars for SEASONAL ENGAGEMENT Candy Displays on the Perimeter Aisle Location and Optimization Wayfinding and Usage Occasion Set Directive Signage Seasonal Aisle Display Anchor Increase conversion of non-aisle shoppers Total Store Activation Front of Store and Grocery side of Store preferred Back of Store aisles need additional support Leverage shopper behavior Communicate assortment for passing shoppers In store navigation and store thematic Provide disruption to instill emotional connection with seasonal shopper Signifies the entry to the seasonal set High frequency packtypes and top brands will engage more households 3-10% 7-9% 3-6% 1-2% 1-2% Source: IRI, Store Audits, Hershey Internal Model 21

22 Build your confection plans around the right items % of sales made on impulse: Early: 62%, Mid: 44% and Later 18% 22

23 Activate displays across highly relevant SEASONAL LOCATIONS Seasonal Interaction Points Retail Audits; Valentine s 2017 Most Inspirational Display Categories Retail Audits; Valentines 2018 Dairy 6% Deli 13% Candles 5% Bakery 32% Frozen 9% Seasonal 64% Produce 21% Jewelry Cards Home Décor 1% 10% 15% Plush 44% Floral 56% Flowers Candy 28% 56% 64% of shoppers engage with Valentines in the seasonal aisle; opportunity to crossmerchandise with Floral and Bakery shoppers Source: Wiser Audits 23

24 Dedicated seasonal space varies, but optimization possible across all formats and layouts Seasonal Aisle Footage Candy and General Merchandise Target Fred Meyer Meijer Walmart HEB Kroger WAGS DG Family Dollar Giant Food Martins CVS Stop&Shop Alb Hannaford SFY Food Lion Source: Holiday 2017 Wiser Audits 24

25 NATIONAL SALES EXPO 2018 Merchandise by frequency and primary selling period +3-6% Sales Lift Bagged Chocolate Sweets Exchange Novelty 25 Gifting

26 Utilize endcaps to increase stopping power and noticeability +5-9% Sales Lift 26

27 Who s winning today? 57% Conversion 59% Conversion 55% Conversion 27

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29 Win the Valentine s trip while also capturing early Easter sales opportunities 1 Sell to Seasonal Plan 2 Engage total Store 3 Execute Early Easter 2/3 of Valentine s sales come from Gifting and Candy Dish 56% of shoppers engage with Floral Early conversion helps win late season trip 29

30 2019 Valentines 30

31 Valentine 2019 How to Win? NATIONAL SALES EXPO

32 Total US Food: Pack type share by week Weekly Share of Total Holiday Sales Total US Food; Valentines % 4% 4% 11% 4% 20% 5% 6% 5% 14% 4% 5% 29% 5% 6% 5% 13% 4% 5% 32% 4% 6% 5% 12% 5% 5% 33% 4% 5% 4% 9% 5% 6% 31% 3% 4% 4% 5% 6% 8% 20% 3% 3% 4% 4% 7% 21% A/O STD LOOSE CDY PKG OTHER NC CDY PKG SNK SIZE NOVELTY CH CDY PKG PRES BOX/BAG 49% 50% 55% 33% 30% 30% 34% W/E 01/07/18 W/E 01/14/18 W/E 01/21/18 W/E 01/28/18 W/E 02/04/18 W/E 02/11/18 W/E 02/18/18 Presentation boxes have increased importance late season (early season shows Holiday seasons overlap) Ch Cdy Pkg accounts for sizeable sales each week of the season Std Loose has higher share of sales early season 32

33 Plan for the last week of the season Don t sell yourself short on Sales make sure you have product the last week of the season. Over 53% of your holiday candy sales come the last week of the season! Ensure stores have gifting items the last 2 weeks 33

34 Valentine s 2019 Candy Strategies Leverage candy s strength Make your store the destination for his/her needs Right size segments in the assortment, ensure stores have a good assortment for all his/her needs! Valentines Day is on Thursday this year! Assortment Order must have items to drive assortments within the stores and on shelf Item assortment is critical to capture incremental margin to the category Pricing Season Long Price strategy with pulse of promotion Identify Key items that need to be priced right against mass, especially on promotion Merchandising Execute aisle planogram flow segment & price, Follow Planogram for best in class Lead with Candy Dish (Highest household penetration rate). Feature Gift Boxes at the end of the aisle (Destination item) to drive traffic into the section Display Russell Stover Heart Shipper in Floral Departments Get Early ship Easter items on the sales floor right after Christmas 36% of these items sales come prior to Valentines days Don t lose out in these sales! Incremental displays located at front ends and if possible in the perimeter of the store will equal increased SALES & MARGIN $$$ s - 34

35 Plan assortments based on store volumes Easter Sales by ACV Cluster US Food; Easter 2019 $14,838 $11,128 $5,564 $7,419 $2,782 $3,709 $75K $100K $150K $200K $300K $400K Item Ct Source: Hershey Internal Model; IRI 35

36 Store Classification Definition NATIONAL SALES EXPO 2018 Convenience: 24,999 Square foot store or less, approx. $50K - $150K per week Quick pick up of core candy dish brands, core gifting brands, along with limited Novelty., but might have more Instant consumable displays. Routine: 25,000 49,999 Square foot store or less, approx.$151k - $399K per week Expanded assortment in the candy dish segment and gifting segment. Encourage more premium brands for gifting to encourage trade up. Increased assortment in the novelty items. Instant consumable displays should be utilized through out the store but highly encouraged near the front of the store. Preferred: 50,000+ square foot store, approx. $400K+ per week Wide assortment of candy, create a destination for your confection candy to purchase all their seasonal candy needs in one location. Increased Candy dish assortment, incorporating multiple different pack sizes for the core items. Expanded Gifting/premium assortment including Higher end boxed chocolates & stand up bags. Expanded section of Instant consumable on shelf and Novelty items that bring the play value into the item. 36

37 Planogram Segments 37 37

38 Convenience Planogram 4-8 foot planogram NATIONAL SALES EXPO 2018 Best of the Best items Focus on Candy Dish and Gifting 38

39 Convenience - 8 Estimated Performance $1M to $12M $12M to $16.5M $16.5M to $21.3M Est. Units Purchased Est. Retail sales at 100% $ 5,654 $ 9,233 $ 13,259 Est. Total Order Cost $ 3,935 $ 6,452 $ 9,113 Est. Margin 100% Sell thru $ 1,719 $ 2,781 $ 4,146 Est. Blended Margin 30.4% 30.1% 31.3% Est. Retail 88% Sell thru $ 4,975 $ 8,125 $ 11,668 Est. Cost at 88% of Total order $ 3,462 $ 5,678 $ 8,019 Est. Margin $ Prior to markdown $ 1,513 $ 2,447 $ 3,648 Est. Blended Margin 30.4% 30.1% 31.3% Balance of Original Order after 88% sell original program retail (Prior to Markdown) $ 678 $ 1,108 $ 1,591 Est. Markdown retail sales (50% off retail) $ 339 $ 554 $ 796 Balance of original product Cost after 88% sell thru $ 472 $ 774 $ 1,094 Est. Markdown Cost of Goods Net Loss $ (133) $ (220) $ (298) Estimated performance based on below factors: Based on a 8 planogram assortment Est. Retail sales based on suggested season long TPR price points Est. Total Cost prior to Freight and Fees Gross Margin varies by volume of order based on % of sales mix at Item level. Above represents a blended Margin 88% Sell through 50% markdown implemented after season Est. Total Retail Sales With Markdowns $ 5,314 $ 8,679 $ 12,463 Est. Total Program Gross Profit $'s $ 1,380 $ 2,227 $ 3,350 Est. Blended Margin Total program 26.0% 25.7% 26.9% 39

40 NATIONAL SALES EXPO 2018 Routine Planogram foot planogram Top Core Items with expanded assortment 4 feet of Candy Dish 4 feet of Gifting 4 feet of Novelty and Exchange 40

41 Routine - 12 Estimated Performance $1M to $12M $12M to $16.5M $16.5M to $21.3M Est. Units Purchased Est. Retail sales at 100% $ 7,814 $ 8,274 $ 15,052 Est. Total Order Cost $ 5,451 $ 5,755 $ 10,412 Est. Margin 100% Sell thru $ 2,362 $ 2,519 $ 4,640 Est. Blended Margin 30.2% 30.4% 30.8% Est. Retail 88% Sell thru $ 6,876 $ 7,281 $ 13,245 Est. Cost at 88% of Total order $ 4,797 $ 5,064 $ 9,162 Est. Margin $ Prior to markdown $ 2,079 $ 2,217 $ 4,083 Est. Blended Margin 30.2% 30.4% 30.8% Balance of Original Order after 88% sell original program retail (Prior to Markdown) $ 938 $ 993 $ 1,806 Est. Markdown retail sales (50% off retail) $ 469 $ 496 $ 903 Balance of original product Cost after 88% sell thru $ 654 $ 691 $ 1,249 Est. Markdown Cost of Goods Net Loss $ (185) $ (194) $ (346) Estimated performance based on below factors: Based on a 12 planogram assortment Est. Retail sales based on suggested season long TPR price points Est. Total Cost prior to Freight and Fees Gross Margin varies by volume of order based on % of sales mix at Item level. Above represents a blended Margin 88% Sell through 50% markdown implemented after season Est. Total Retail Sales With Markdowns $ 7,345 $ 7,778 $ 14,148 Est. Total Program Gross Profit $'s $ 1,894 $ 2,023 $ 3,737 Est. Blended Margin Total program 25.8% 26.0% 26.4% 41

42 Preferred Planogram 20+ ft. planogram NATIONAL SALES EXPO 2018 Expanded Item Assortment 4+ feet of Candy Dish 8+ feet of Gifting, bag & alternative 4 feet 4 feet of Candy Canes 42

43 Preferred - 20 Estimated Performance $12M to $16.5M $16.5M to $21.3M $21.3M to $26.5M $26.5M and above Est. Units Purchased Est. Retail sales at 100% $ 10,139 $ 13,219 $ 15,253 $ 16,395 Est. Total Order Cost $ 6,968 $ 9,039 $ 10,242 $ 11,085 Est. Margin 100% Sell thru $ 3,171 $ 4,180 $ 5,011 $ 5,311 Est. Blended Margin 31.3% 31.6% 32.9% 32.4% Est. Retail 88% Sell thru $ 8,922 $ 11,633 $ 13,423 $ 14,428 Est. Cost at 88% of Total order $ 6,132 $ 7,954 $ 9,013 $ 9,754 Est. Margin $ Prior to markdown $ 2,790 $ 3,678 $ 4,410 $ 4,673 Est. Blended Margin 31.3% 31.6% 32.9% 32.4% Balance of Original Order after 88% sell original program retail (Prior to Markdown) $ 1,217 $ 1,586 $ 1,830 $ 1,967 Est. Markdown retail sales (50% off retail) $ 608 $ 793 $ 915 $ 984 Balance of original product Cost after 88% sell thru $ 836 $ 1,085 $ 1,229 $ 1,330 Est. Markdown Cost of Goods Net Loss $ (228) $ (292) $ (314) $ (346) Est. Total Retail Sales With Markdowns $ 9,531 $ 12,426 $ 14,338 $ 15,412 Est. Total Program Gross Profit $'s $ 2,563 $ 3,387 $ 4,096 $ 4,327 Est. Blended Margin Total program 26.9% 27.3% 28.6% 28.1% Estimated performance based on below factors: Based on a 20 planogram assortment Est. Retail sales based on suggested season long TPR price points Est. Total Cost prior to Freight and Fees Gross Margin varies by volume of order based on % of sales mix at Item level. Above represents a blended Margin 88% Sell through 50% markdown implemented after season 43

44 Item Assortment Must Have s NATIONAL SALES EXPO 2018 Convenience Routine Preferred Candy Dish Andes Mints Candy Dish Andes Mints Candy Dish Andes Mints Brach's Laydown Bags Brach's Laydown Bags Brach's Laydown Bags Hershey Laydown Bags Hershey Laydown Bags Hershey Laydown Bags M&M's Bags M&M's Bags M&M's Bags Dove Bags Dove Bags Dove Bags Ghirardelli Bags Ghirardelli Bags Expanded Hershey Laydown Bags Expanded Hershey Laydown Bags Queen Ann Cherries Queen Ann Cherries Trolli Laydown Bag Sour Patch Kid Bag Life Saver Bag Exchange Skittles Box Exchange Skittles Box Exchange Skittles Box Brach's Conversation Hearts Brach's Conversation Hearts Brach's Conversation Hearts Welch's Fruit Snacks Welch's Fruit Snacks Welch's Fruit Snacks Airheads Box Airheads Box Welch's Fruit Snacks Welch's Fruit Snacks Mars Exchange Mars Exchange Hershey Exchange Hershey Exchange M&M Exchange Sour Patch Exchange Novelty Reese's Heart Novelty Reese's Heart Novelty Reese's Heart Kisses Cane Kisses Cane Kisses Cane Russell Stover Marshmallow Russell Stover Marshmallow Russell Stover Marshmallow Skittles Heart Skittles Heart Lindor Mini Bag Lindor Mini Bag Peeps Heart Russell Stover Money Bar Gifting Russell Stover Small Heart Gifting Russell Stover Small Heart Gifting Russell Stover Small Heart Russell Stover Medium Heart Russell Stover Medium Heart Russell Stover Medium Heart Russell Stover Large Heart Russell Stover Large Heart Russell Stover Large Heart Dove Heart Dove Heart Dove Heart Ferrero Rocher 12 PC Ferrero Rocher 12 PC Ferrero Rocher 12 PC Lindor Bag Lindor Bag Russell Stover Box Russell Stover Box Expanded Heart Assortment M&M Heart 44

45 Item Assortment New Items Convenience Routine Preferred Ferrero Rocher Golden Heart for You and Me Ferrero Rocher Golden Heart for You and Me Ferrero Rocher Golden Heart for You and Me Milk Chocolate Hearts Large Bag Milk Chocolate Hearts Large Bag Milk Chocolate Hearts Large Bag V HERSHEY'S Lava Cake KISSES Laydown Bag, 9 oz., 16 ct., Display Ready Case V HERSHEY'S Lava Cake KISSES Laydown Bag, 9 oz., 16 ct., Display Ready Case V HERSHEY'S Lava Cake KISSES Laydown Bag, 9 oz., 16 ct., Display Ready Case Russell Stover Assorted Chocolates Card Pocket Heart Russell Stover Assorted Chocolates Card Pocket Heart Russell Stover Assorted Chocolates Card Pocket Heart Russell Stover Assorted Chocolates Coco Plush Heart PJ Mask Heart Box Incredibles 2 Candy Card Kit Russell Stover Assorted Chocolates Coco Plush Heart PJ Mask Heart Box Incredibles 2 Candy Card Kit DV MC GFTHRTBX VLNT 3.7OZ 6CS Sour Patch Kids Large Heart Russell Stover All Milk Double Sequin Top Heart 45

46 Item Assortment Displays NATIONAL SALES EXPO 2018 Convenience Routine Preferred Hershey Heart Shipper Hershey Heart Shipper Hershey Heart Shipper Andes Mint Shipper Andes Mint Shipper Andes Mint Shipper Hershey IC Shipper Hershey IC Shipper Hershey IC Shipper Russell Stover Heart Shipper Russell Stover Heart Shipper Russell Stover Heart Shipper Hershey Laydown Bag Tower Hershey Laydown Bag Tower Hershey Laydown Bag Pallet M&M Bag Tower M&M Bag Tower M&M Bag Tower Dove Hart Shipper Welch's Pallet Dove Hart Shipper 46

47 Program Timelines & Deadlines Valentine s Seasonal Catalog Available Online: July 16, 2018 Orders Due No later than: August 12, 2018 SV Harbor Events: Wholesale = (Early Easter ) SNS Pittsburgh = (Early Easter ) Order Type : VAL1 Product Ship Window: 12/10/18-1/4/19 47