The fact that candy prices are rising is reason enough to try some of the larger size products, said Hugh O’Neill, general manager at Hagerstown Canteen Service in Hagerstown, Md. He has had good luck with the LSC bars, and is getting ready to test king-size bars.
It is uncertain at present how much momentum there is behind the push to larger size candy. Some operators pointed out that this movement is contrary to the consumer demand for healthier offerings in vending machines; larger size candy means more sugar and calories. Some operators think moving to larger size candy is incompatible with their current emphasis on healthier eating.
Operators watch price points carefully Others are waiting for price points to move up just a little more before offering LSC.
“When everyone else gets to 70 cents, that’s when we’re going to make the dollar bar that much more attractive,” said Dan Sheehan, owner of Sheehan Brothers Vending Service Inc., a 15-route operation in Springfield, Ohio, a rural market.
In the meantime, Sheehan plans to decrease his candy facings from two shelves to one and a half. “Twenty columns is not needed and candy is the least profitable thing I sell, and I want to sell less of it,” he said. “You don’t need 20 rows when six or seven are all you need to have.”
Sheehan recognizes there will be a cost involved in changing his candy spirals to larger snack spirals. But he’s already found snack companies willing to offer him incentives in exchange for guaranteed placements.
Bag size candy improves for some
Some of the wider slots might still go to candy, as Sheehan has recently experienced some success with large-size bag candy in his wide slots. This came about by accident. The company didn’t do well when it first tried bagged candy for $1.00, he noted. But when they tried it again in response to a customer request, the response was much better.
“It’s pretty location specific,” Sheehan said of the large bagged candy.
Charles Giaconoa, administrative services manager at Metro Vending Services Inc. in Roseville, Mich., has been happy with the LSC offerings priced at $1.00 from Hershey Co. The company, which has 14 routes in the Greater Detroit area, keeps two candy shelves in its machines and has been using four LSC versions of Hershey’s top selling items for the past six months after testing it with select customers.
Company representatives sat down with location managers and explained they were providing more value for their money. “We didn’t just put it in and not tell them,” Giacona explained.
Metro Vending Services also placed point-of-sale material about the new products on the machines and gave away merchandise.
King-size bars are more challenging
The company has offered king-sized versions of some of the top selling candy bars, but only on request, Giacona said. The king-size bars are costlier than the LSCs, he said, and there is less consumer acceptance.
Giacona claimed that the LSCs are well received in all types of accounts.
Metro Vending Services also offers sugarless candy to accounts on a request only basis. He said there is a strong demand from location managers, but not from end users.
PGI Services Inc., based in Shaumburg, Ill., experienced success with both LSC and king-size bars, said Jim Covington, vice president of operations. LSC and king size candy bars have boosted his candy sales by 15 percent. “A lot of times we’re our own worst enemy,” he said, concerning operator reluctance to use higher priced offerings. “You’re not going to know until you do it.”
Operator finds consumer acceptance
Covington noted his company monitors margins carefully, and the higher priced items have not compromised his profitability.
He claims only one out of 400 customers complained about the higher prices. “I think the days of super sensitivity about prices are behind us,” he said.
LSC and king-size bars also create a better price environment for large size candy bags, Covington said. He said he has seen some improvement in the performance of these items.
Not everyone is convinced the time is right to charge $1.00 for candy bars.