The candymen can: mults plot American revolution

Patriotic fervour is at an all-time high. So why are brands from across the pond appearing on supermarket shelves in their droves?

Last week The Grocer revealed Tesco’s trial plans for in-store fixtures dedicated to US imports, just a fortnight after Asda launched American confectionery bays in almost 100 of its stores.

Asda has also just kicked off an All American Funfair tour fronted by a mascot of its US fizzy drink RC Cola, launched here last year. The Man in a Can will visit stores across the country until 1 September, inviting shoppers to get involved in Tin Can Alley, Hoopla and free product sampling.

US confectionery and other groceries have historically divided British shoppers due to their distinctive flavours and concerns over their nutritional value. But all that is changing. The question is: why? Are retailers being forced to look for inspiration overseas as UK manufacturers fail to excite, particularly in confectionery? And as US cereal brand Honey Bunches of Oats bows out of the UK market (FMCG news, p25), will other US brands - expensive to import and typically the domain of independent retailers - struggle to prosper in mainstream multiples?

Tesco began a trial of US food and drink fixtures in its Sandhurst, Amersham and Richmond stores this week. It believes products such as Woebers Genuine American mustard, Welch’s grape soda, Aunt Jemima corn bread mix and General Mills’ Lucky Charms cereal will have special appeal to the local communities.

“Our customers are always keen to try new and exciting products from around the world, not just the US, and we are always keen to offer ranges that reflect the local area around our stores,” says a Tesco spokeswoman. “We are trialling a wider range of American products this week - such as cereals, confectionery and snacks - in a handful of selected stores, and look forward to their feedback.”

Customer response to US confectionery in the mults so far has been unanimously positive. Asda said sales of chewy candy brand Tootsie Rolls were four times higher than the average for a confectionery line, and it had seen a 25% sales uplift on Hershey’s and Reese’s since launching its dedicated bays.

Distributor Euro Foods said Reese’s Peanut Butter Cups, Reese’s Nutrageous and Reese’s Pieces were the best-selling chocolate countline in Sainsbury’s last November following a half-price promotion. Sainsbury’s confectionery buyer Vanessa Pearson tells The Grocer Reese’s has high loyalty and repeat rates so it is expanding the range this year. “This is more driven by brand demand as opposed to having an American heritage,” she says.

Ocado, meanwhile, has 74 US lines in its range and plans to add 12 new lines soon, including a range of frozen cheesecakes.

The Stateside Candy Co, a Hampshire-based wholesaler, began on eBay but started trading more seriously four years ago as demand took off. Sales of its American candy, groceries and soda have doubled in each of the past three years - growth it attributes to more ‘staycations’ and shoppers’ desire for more interesting flavours.

“People are spending less money on holiday so they’re not going to America, but they still want a taste of it here,” says promotions manager Ella Street. “£10 for a box of cereal is a lot cheaper than a flight to the States. There’s also not a lot of innovation in the UK candy industry. We find a lot of the flavours that sell really well are the slightly weird ones - peanut butter, grape and cinnamon, for example. They’re just not readily available over here.”

Damian Curzon-Price was running a delicatessen in Surrey when he spotted a gap in the market for basic American groceries to meet requests from a growing number of ex-pats. He set up Americatessen in 1993 and is bitterly disappointed that supermarkets are now “jumping on the bandwagon”. He fears that his business could lose up to 80 of its 430 lines to the mults eventually.

“A lot of American sweets were here and then disappeared from shelves. But they are making a comeback and the supermarkets are getting in on it, which rather ruins our business, as they aren’t such niche products anymore,” he says. “Even garden centres are getting into this space, even though it’s so far removed from the nice organic farm shop image. Shoppers don’t look at the price of these products. It’s become a cult thing.”

That’s no doubt one of the reasons that attracted supermarkets in the first place, but Curzon-Price’s hope is that products may be less profitable for mainstream retail given the heavy import and duty costs and strong domestic demand.

“Most US manufacturers aren’t interested in export. Suppliers have a massive domestic market and they give absolutely no support [abroad] unless they specifically want to get into that market. It’s an expensive product so the supermarkets aren’t going to make much themselves unless they manage to strike a magic deal with the manufacturer. It does well with independents and online but as soon as it hits the multiples it’s probably going to break its little bubble.”

Our report this week on the UK withdrawal of Honey Bunches of Oats also illustrates the brick wall facing some US companies looking to gain retail listings in congested categories. Whatever their following - be it from US expats or Brits seeking a taste of the American dream - a competitive price, sufficient marketing and promotional support will be key if they are to make a revolutionary splash in the supermarkets.