One of the most attended industry trade shows for convenience store and forecourt retailer operators in Canada, the Convenience U CARWACS Show concluded on 19 March 2014 in Toronto after a busy couple of days.
The convenience store channel continues to play an important role in a number of product areas in Canada, including beverages, tobacco and packaged food. Within the latter, confectionery is one of the key categories, driven by impulse purchases, and its performance in convenience retail is drawing considerable attention from manufacturers, distributors and marketers of sweets and chocolate.
Euromonitor International participated in the event and exchanged views with industry players, with a particular focus on confectionery products.
Sharing Occasions and a Return to Large-Sized Chocolate Bars
A noticeable trend observed by a number of industry participants in Canada is the increasing sharing of sweets and chocolate with family and friends as well as to connect with other people. Subsequently, manufacturers of confectionery are seeking to tap into this trend and encourage purchase by increasing the size of individual bags/pouches of selflines/softlines.
Furthermore, in categories like tablets and countlines, smaller pack sizes and portion-control products have failed to excite many consumers in Canada, including the female consumers the products sought to target. This is leading to changes in product development and marketing activities, with a return to regular and large-sized chocolate bars to support sales.
Product Bundling Boosts Sales of Snacks and Drinks
While the idea of co-merchandising to drive consumption and impulse purchases is nothing new, it has become increasingly important in Canada’s difficult retail environment, which is characterised by a highly developed marketplace and a wide range of retailers and retail formats competing for a share of consumer dollars.
Discussions with industry participants at the show regarding successful merchandising practices in convenience stores indicated that bundling confectionery with soft drinks, such as bottled water, contributes to sales growth in both categories, with the majority of confectionery sold through front displays.
New Flavours, Ingredients and Packaging
New product trends highlighted at the trade show centred around new flavours, ingredients and packaging.
With regard to successful flavours in confectionery, orange has been a recent hit, according to the industry, with limited editions of new products launched in 2013 and further innovations emerging in 2014. For instance, Nestlé Canada released Kit Kat Orange with a packaging design focusing on the Chinese New Year. Oranges are said to be a symbol of luck and good fortune in Chinese culture, and the new launch is not only picking up on the success of the orange flavour but is also aiming to attract the attention of the growing ethnic consumer base in Canada.
While the gum category as a whole is facing challenges in Canada, new products like Vitamingum from US-based Vitaball Inc are seeking to revive the category. Vitamingum is said to contain 12 essential vitamins and is both sugar- and aspartame-free. The brand is designed to cater for health-conscious consumers in Canada and offer a new delivery format for dietary supplements. After a reportedly successful launch in the US, the brand entered Canada in late 2013 and has since seen healthy growth in the retail channel.
In medicated confectionery, Buckley’s from Novartis Consumer Health Canada showcased a new line of menthol lozenges – ‘Icy outside, Buckley’s inside’ – claiming fast relief for sore throats, dry coughs and sinus congestion. The novelty lies in the delivery format, which incorporates Buckley’s cough syrup, and the product’s flexible pouch packaging, which is gaining popularity in confectionery as well as other packaged food categories in Canada, such as baby food, with convenience being one of the major growth drivers.