Published March/April 2012 in Candy & Snack TODAY
New candy products and iconic brands draw millions of consumers into Walgreen Co. stores daily. Category Manager Paul Minger says maintaining the perfect balance can increase turn and attract serious sales.
MAINTAINING A BALANCE between new candy products and nationally ranked SKUs is a major focus for Paul Minger, Walgreen Co. category manager, confections purchasing. He has developed strategies that help drive sales and reinforce in shoppers’ minds that the company is both on the cutting edge with new products and is also a consistent source for their favorite mainstream brands.
One example is the retailer’s Item of the Month program that launched a few years ago. Cashiers are encouraged to ask shoppers if they’d like to try a featured candy bar or a new type of gum once they’re at checkout. The program has also promoted items such as flu shots, hand sanitizer, disinfectant wipes and toothbrushes. Minger, who manages confections for about 8,000 stores for Walgreens, tells Candy & Snack TODAY the initiative has been a big success.
“Customers are familiar with it and really enjoy it,” Minger smiles. “We really like to go after new items and limited editions, but it is also about promoting some of those iconic items because sometimes there’s nothing better than a Reese’s bar or a Snickers.” When cashiers engage shoppers by suggesting specific products, it catches their attention, Minger says. The packs are displayed next to the register, and brand extensions are often placed in counter units alongside the main brand to complement the items.
Capitalizing on the impulse nature of the category is vital, and to that end, Minger stocks instant consumables such as candy bars and lollipops, as well as gum and mints, at front ends. Walgreens also promotes occasionally with two-for, three-for and four-for deals, he says.
Stores are typically around 14,500 square feet, and Minger manages everyday candy sets in addition to confections in the seasonal aisles, front-end sets and secondary merchandising such as displays. He handles item selection and purchasing of everyday and seasonal candy, as well as pricing, location within the planograms, meeting and negotiating with vendors, and putting together merchandising programs.
Making Candy Stand Out
Walgreens has increased its focus in recent years on consumer-centric retailing, which Minger says has resulted in stores with a cleaner, friendlier and more convenient shopping environment that includes lower sight lines and a refined product selection. His expertise in understanding Walgreens customers and merchandising to meet their needs has been 42 years in the making, as he started with the retailer as a part-time employee during the holidays while he was in high school.
Minger worked his way up into the management program, and served for 10 years as a store manager. After that, he became the supervisor for beverage and alcohol for Arizona and New Mexico for 17 years. He returned to the corporate office as a category manager for the grocery and pet departments, and for the past 10 years has handled candy. Today, he oversees a team of more than five candy buyers, ensuring the product mix represents a broad selection that appeals to Walgreens target consumers.
Minger says the most popular items among those shoppers are peg bags of non-chocolate and laydown bags of chocolate, with sales split fairly equally between them. Unit sales of candy bars and count goods are also strong, Minger says. He adds the chain strives to be first-to-market on product launches, and there can be a real benefit to removing an existing item in a set and taking a chance on a new product. This move definitely has the potential to increase sales, Minger says, but he emphasizes he and his team always research thoroughly before making the swap.
“The risk is if it doesn’t sell, and it takes up space and takes up whatever we’ve invested into it in terms of dollars and time, we have to have an action plan to get rid of it. So that’s why you’ve got to do your homework up front to try and lessen that risk. That’s also why it’s so important to understand how suppliers are going to support it.”
Print, TV and radio ads, as well as in-store displays, FSI coupons and social media are among the promotional criteria Minger evaluates in meetings with vendors, he says, adding products must be unique and interesting. “We really like to see innovation,” he says. “We look at the whole package to see how they’re spending their dollars to drive people into Walgreens.”
Minger’s main focus is the chain’s primary source of confectionery sales, an aisle in each store that offers around 100 feet of dedicated space for candy. Count goods, singles, gum and mints are stocked there, and facings of theater boxes, peg candy, laydown bags, novelties, sour items and premium chocolate establish a neat wall of color and recognizable brands. More than 2,000 SKUs attract shoppers to these aisles, Minger says.
Next to bags of gummies and hard candies, sugarfree confectionery is arranged in a distinct set to make it easy for consumers to find the products they need in one place, he explains. In these sections, he stocks both chocolate and hard candy, and points to sugarfree starlight mints as an example of something that appeals to older consumers.
Premium chocolate items are among the chain’s bestselling product types, and he highlights them with shippers and promotions for everyday and during key holiday shopping periods. “We probably have one of the best and largest seasonal candy sets,” he says. “We change our sets out from year to year because we want to keep it looking different and fresh, so you’re not always selling the same chocolate bunny at Easter.”
Emphasizing ‘Point Of Difference’
In meetings with vendors, Minger says he appreciates presentations that don’t have a “cookie-cutter” approach, as well as suppliers that understand his business. He asks several questions to determine whether a new candy item will meet standards.
“Probably the most important thing I look for from suppliers is to give us a point of difference,” he says, explaining: “We have so many stores and we want to create unique offerings and customization to do things other retailers haven’t been able to figure out how to do, can’t do, or won’t do. We have the number of stores and the strength to be able to do that.”
He works with suppliers to develop items that are different from what’s already on the market. From smaller case counts and pack sizes to developing a product from a concept, Minger works with domestic suppliers and candymakers from Asia and Latin America and other countries to present Walgreens shoppers with products they’ll want.
Minger says his personal approach to business is to try to remain fair, equitable and balanced, and one thing that has helped him with this is working with brokers, who are knowledgeable and understand there are distinct differences between classes of trade.
“Brokers serve a very important purpose in that they represent a lot of different manufacturers and give you a more impartial view,” he says. “They’re typically in the communities you’re in and have a better idea of what’s going on than a supplier who might fly in once a month.”
Retail competition has become fierce in recent years as more and more stores are opening up around the U.S., Minger says. “You can go out to Main and Main anywhere in the U.S. and find four retailers on every corner. That makes all of us smarter and a little bit sharper,” he says. “We use confections as a means of helping to attract customers, and it’s become more of a business for us. Within the past seven to eight years, we have done more with confections as consumers shift their needs and wants to consumables in general.” He adds this shift has increased shopping trip frequency for Walgreens.
MovingWalgreens Forward
With continued growth since the acquisition of New York City retail chain Duane Reade in 2010, the company has opened additional stores and remodeled existing locations. In fiscal 2011, Walgreens opened a total of 261 stores and acquired 36 locations, for a net increase of 164 stores after relocations and closings.
With the number of stores expected to grow by about three percent (around 200 stores) in fiscal 2012, Minger says he’ll continue to try to spend as much time as possible talking with store managers to stay on top of what’s happening at the store level. However, he says he makes time for emails and phone calls, as well as occasional store visits and meetings at various industry forums because that communication is vital.
“It’s so important to see what’s going on out there not only with competition, but also within our own stores,” he says, adding trade shows and seasonal planning events are also crucial. “It’s important to understand what’s new.”
He already spends about 10 weeks a year on the road at trade shows, looking for and meeting with new candy suppliers. When he’s in his Deerfield, IL, office he organizes discussions with vendors via email and telephone to talk about programs and review new items. “We talk about things they think we need to cover to drive our business forward,” he explains. For about two days each week, he discusses programs, gets ready for ad reviews and develops seasonal programs in internal talks with his team.
When he receives an agenda from a supplier, he reviews it and determines how to follow up. “There’s no shortage of vendors trying to meet with us,” he says. “Sometimes a meeting can be done through a simple email and sending samples. I have to evaluate their agenda and decide whether an email, a phone call or a face-to-face meeting would be most valuable.”
He adds: “I try and hold most of my new vendor presentations and meetings at ECRM, which is one of the forums I’ve found to be very successful. And at the SWEETS & SNACKS EXPO here in Chicago, there are a lot of opportunities to meet with vendors and find new vendors as well.”
Traveling around the world and seeing new items make their way from a concept at a trade show to a finished product on the shelf are both exciting, but Minger says his favorite part of his job is working with other buyers at Walgreens to help them further their careers, learn about the business and advance within the company.
He tells Candy & Snack TODAY: “I love seeing people progress and take on different roles within the company, take on more responsibility and become more impactful within the organization.”
