Masterful Merchandising

By Mary Ellen Kuhn

Chocolate retailing pros talk tips and tactics.

To merchandise chocolate most effectively, take a multi-sensory approach, recommends chocolate maker, author and pastry chef Jacques Torres, who operates two highly regarded chocolate retail shops in New York City.
“People approach the counter with their taste buds, their eyes, their cognitive processes and their emotions/memories,” says Torres. “It’s important to keep that in mind when presenting the product so you capture a little of each one of those areas.
“Taste rules over everything,” Torres continues, “but since most places require a purchase before a taste, the initial purchase is made with senses other than taste.”
Thus, “Names of products are just as important as tastes of products during the selling process,” he points out.
Store configuration and product positioning within it also play key roles in retailing chocolate. It’s important for shoppers to be able to navigate a store quickly and to easily find their chocolate of choice.
So when Fannie May Confections set out to remodel and expand its flagship store in downtown Chicago, the design team devoted considerable attention to improving “in-store navigation” and making it easy to locate favorite confections in the store, reports Jan Waanders, director of marketing for Fannie May, which currently operates 52 stores in four Midwestern states.
“The 80/20 rule always applies,” continues Waanders. “So we’ve especially highlighted that 20 percent of the SKUs (stock keeping units) that account for 80 percent of the volume.”
Now top-selling Fannie May lines are merchandised in single destinations within the store with eye-catching signage to direct shoppers to that location. “If we have Pixies or Trinidads in a certain aisle,” says Waanders, “we have a shingle above that, depicting the product.”
The virtues of simplicity
The keep-it-simple rule applies to more mainstream retail channels as well. Premium chocolate bars can present a particular challenge, notes Laurie Roberts, who as director of sales and marketing for Boulder, Colo.-based Chocolove, has spent considerable time analyzing chocolate bar sets at retail.
Keeping a set both well organized and visually appealing is a challenge, she notes. For one thing, some bars are packaged to sit vertically on the shelf, while others sit horizontally. Then there’s the fact that shoppers tend to browse the section and often change purchase plans midstream, plunking down the bar they’ve opted not to buy without bothering to ensure that it’s put back in the right place.
“I like the idea of keeping one brand straight across,” says Roberts. “If you keep a brand line going straight across, it’s easier to keep the set clean.” And, because we read left to right, such a merchandising approach makes sense for the consumer, she continues.
Gravity-feed displays are also helpful for keeping a chocolate set organized, she adds.
Sweet theater
While merchandising pros note that organization and simplicity definitely count in the store, adding a bit of drama to the retail experience doesn’t hurt either.
Torres’ decision to give store visitors a view of the chocolate-making process via large plate glass windows that open onto the candy-making area of his operation was a smart move, says Beth Kimmerle, author of “Chocolate: The Sweet History” (Collectors Press, 2006).
“I think retailers are realizing that you need a little more entertainment [in the store],” says Kimmerle, an entrepreneur, who also developed the Big Tips Candy Collection of nostalgia candies. “Some sort of entertainment is going to be the wave of the future — whether it’s demos, tastings or classes,” she predicts.
At the flagship Fannie May store, both store patrons and passers-by can observe store staffers hand dipping fruit, cookies and ice cream in chocolate thanks to an attractive demonstration area adjacent to a window on Chicago’s busy Michigan Avenue. The shop also serves coffee and hot chocolate.
Raising the bar
Chocolate lovers these days have a growing assortment of options ranging from upscale supermarkets to specialty retailers.
But if the choices have expanded for consumers, that doesn’t worry the chocolate retailers Confectioner interviewed.  “We used to be the only game in town 20 or 30 years ago,” says Waanders of Fannie May. “Now there is much more competition out there in chocolate land. If the trend is positive, we will all pick up. And, for that matter,” he adds, “we do see an uptick in sales.”
“We believe ‘the more, the merrier’ when it comes to the chocolate retail industry,” says Torres, who adds that the growing number of chocolate retailers means that there is something for every taste.
“It’s a journey of exploration,” he observes. “Some stores are dedicated to tradition. Some stores are on the untraveled road. People may ultimately end up with a favorite, but they are willing to taste all of the chocolates on the market to do their homework. That’s good for all of us.”
Kimmerle draws a parallel to Starbucks and the coffee category. “If chocolate moves the way that coffee did, I think there’s a good chance that it will be like Paris, where there’s a little chocolate shop on every corner,” she says hopefully. n
Chocolate Merchandising Do’s and Don’ts
Do encourage shoppers to treat themselves. “Sometimes just asking the question, ‘And what did you get for yourself?’ gives the person the permission they need to allow themselves a treat,” says New York City-based chocolate retailer Jacques Torres.
“Otherwise,” he continues, “asking ‘Did you need to get something for your mom, daughter, babysitter?’ helps extend the pleasure to someone else in their lives.”
Don’t let things get stale. And we’re not just talking about the product itself here.
“We try to keep the experience fresh every time people come into a Fannie May store,” says Jan Waanders, director of marketing for the Chicago-based company. Simple merchandising tools like a special promotion, new ceiling dangler, poster or window sign can do the trick.
Do get creative at the front end. Laurie Roberts, director of sales and marketing for Boulder, Colo.-based Chocolove, is a fan of what she terms the “chocolate island” located at the front of the Whole Foods Columbus Circle store in New York City. It’s a low fixture positioned perpendicular to the checkouts that features an appetizing assortment of chocolate items, as well as some non-chocolate SKUS, she reports. “It’s definitely a more elegant approach to having chocolate at the registers,” says Roberts.
“I think retailers are understanding that if they put more higher-end products at the front end, then they can get into the $2 or $3 range [in product price points],” says Beth Kimmerle, author of “Chocolate: A Sweet History.”
Don’t overlook the basics. At Fannie May, the goal is to keep the shops, “clean and organized, making sure we’ve got a complete size and weight range and the shelves are fully stocked,” says Kate Campbell, retail merchandising manager for the company.
Dark and Decadent vs. Milky and Mainstream
Dark chocolate is getting most of the buzz of late, no doubt about it. And as the winter holidays approached this year, even mainstream retailers were featuring more of it in their assortments as a trip to the local Walgreens store will quickly demonstrate.
A look at dark chocolate product introductions tracked by research firm Mintel International over the past three years helps to tell the story. As of mid-November 2006, 325 new dark chocolate SKUs had been unveiled in the United States vs. 304 for the full year in 2005 and 242 in 2004.
Milk chocolate rollouts outpaced dark, but the gap is closing. (See chart.)
How milk vs. dark sales shake out depends on a brand’s target audience.
“We’ve always sold a considerable amount of dark chocolate,” says Jan Waanders, director of marketing for Chicago-based Fannie May Confections. Traditionally, about 40 percent of the Fannie May assortment is dark chocolate, 50 percent is milk chocolate, and 10 percent is not enrobed in chocolate, says Wannders.
Recently, he notes, sales of dark chocolate have been climbing. And, in fact, the chain’s new 70 percent cocoa dark chocolate bar has become its best-selling bar.
The emphasis on cocoa content in dark chocolate may even be translating to the milk chocolate segment of the market.
Laurie Roberts, director of sales and marketing for Boulder, Colo.-based Chocolove, notes that the company flags the cocoa content on a plain milk chocolate bar and a milk chocolate bar made with toffee and almonds. Both boast a 33 percent cocoa content, and both have been well received, she reports. It’s a slightly less sweet version of milk chocolate, she says.
The company’s assortment of premium chocolate bars includes 14 dark SKUs and four milk chocolate SKUs.
At Madelaine Chocolate Novelties, Rockaway Beach, N.Y., milk chocolate products account for about 85 percent of sales, although the company is adding dark SKUS on an ongoing basis, says Joan Sweeting, national sales manager.
Sweeting points out that many of Madelaine’s popular foil-wrapped items such as Santas and Easter bunnies are purchased for children, who haven’t yet cultivated a taste for dark chocolate. “It’s the flavor everybody loves,” she notes.