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Regardless of the new terrain being encountered during the coronavirus crisis, IBISWorld Senior Industry Analyst Matthew Barry tells Convenience World that selling confectionery in convenience stores had been a struggle for five years. “Fierce price-based competition among supermarkets has constrained revenue growth for confectionery products at convenience stores,” he said. “Consumers have become more health conscious and opted for healthier alternatives to high-sugar- content snacks, such as confectionery.” These factors have, barring pandemic times, underpinned weaker demand for confectionery products at convenience stores. He says, however, that demand for confectionery products during the prolonged COVID-19 lockdown period has increased, despite not being considered a staple or essential food product, as groceries are stockpiled and consumers look to treat themselves. Meanwhile, the products of confectionery manufacturers that have chosen to upgrade with automated machinery are expected to be at less risk of COVID-19 contamination, Mr Barry says. “Major player Mondelēz, which owns the brands Cadbury, Ritz and Pascall, has heavily invested in automation over the past five years,” he said. “For example, in September 2018 the company invested $20 million in new automated machinery to wrap Flake and Twirl Bars.” Looking ahead to when the COVID-19 outbreak is expected to be under control, Mr Barry anticipates a decrease in confectionery sales volumes in the short term as households burn through stockpiles. Furthermore, as restaurants and dessert bars begin to reopen, there is projected to be a surge in demand for these substitute dine-in dessert options. IRI food and grocery consultant Brooke Olliver-Burnside, who works closely with impulse manufacturers, tells Convenience World that chocolate sales in convenience outlets have increased during lockdown, while total sugar confectionery declined over the few weeks to near the end of April. “Chocolate is a big winner during the coronavirus period,” she said. “There was a big sales hike from the end of January and during February and March. Thereafter, there was slightly more of a drop in the confectionery category and stabilisation took place.” Ms Olliver-Burnside points out that when the pandemic first hit, the convenience sector benefited from the initial stockpiling that took place, which has now subsided. “It’s slightly difficult to measure, but I’d say the spike took place in February across most of the segments, which was to do with stockpiling behaviour and people going into stores and buying a lot more than they normally would,” she said. “People were definitely concerned as to whether they’d even be able to access stores in the coming weeks, which caused the spikes. We’re not seeing those huge spikes anymore as growth rates become consistent with the year.” Looking at Easter sales, Ms Olliver- Burnside says it’s tricky to make definitive statements as the holiday, which took place earlier this year than in 2019 and with coronavirus in full swing, isn’t “big in convenience”. “Many mass-merchant store closures would see people looking to other channels for Easter purchases, but convenience stores didn’t appear to be one of them,” she said. Mr Barry says he expected Easter sales to be weaker than usual as the federal government placed strict lockdown measures over the holiday and recommended that households refrain from visiting people. Wunderman Thompson Managing Partner (Shopper) Georgia Bruton agrees with Ms Olliver-Burnside that chocolate has been a winner in the category since lockdown began. “Confectionery is quite a diverse category, from chocolate to gum, so the way in which consumers have been interacting with this category across the pandemic period varies greatly from product to product,” she said. “Any of the more impulse-purchase products, such as gum, smaller lollies and snack-sized chocolate bars, appear to be experiencing a decline. “The good old block of chocolate appears to be deemed an essential to many Aussies, with sales of the block category spiking across this lockdown period – based on conversations with major retailers.” ACAPMA CEO Mark McKenzie tells Convenience World that the substantial fall in petrol sales across the country, averaging about 40 per cent, has affected the sector, including confectionery. He says a part of the revenue loss from fuel sales experienced by many service station operators in recent weeks has been offset by an increase in convenience sales across the board in terms of confectionery, coffee and grocery items, with some stores struggling to secure products because supermarkets “have taken so much”. “We’ve had so many stories in this regard that we joined forces with the Australasian Association of Convenience Stores \\\\\\\[AACS\\\\\\\] to just make sure the convenience industry gets its share of supplies, and this will continue to be a major area of focus through COVID-19,” Mr McKenzie said. AACS CEO Jeff Rogut says it appears at this stage that the supply of confectionery items has “in the main been better than \\\\\\\[that of\\\\\\\] many grocery items” during the COVID-19 crisis. The “silver lining” though, Mr McKenzie emphasises, is that people are rediscovering that service stations sell confectionery, food and groceries. “It’s been significant enough for us to see an increase in non-fuel sales across the national network, but particularly in petrol and convenience centres in suburban centres because people are no longer travelling to and from work but rather purchasing food and groceries from their local convenience stores in suburban areas,” Mr McKenzie said. He points out that this has negatively impacted P&C stores on the major arterials to central business districts, which are mostly devoid of traffic. As to general confectionery, he says research shows that when people become anxious, they look for comfort from chocolate and the like, which has resulted in a sales hike in the category. On the manufacturing side, CTC Australia Marketing Manager and Designer Bernard Fauvette tells Convenience World that many changes are afoot for the confectionery industry. “Food service is at a standstill, convenience sales are slowing because TO PAGE 52 CONFECTIONERY MAY/JUN, 2020 CONVENIENCE WORLD 51