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Something to Chew On

18 Jan, 2003 By: Dan Bennett

Their TVs are huge. Their players are DVD. Their speakers are surround. The only things needed to fully transform renters' living rooms into theaters are people who won't shut up, a sticky floor -- and snacks.

Most video retailers stocking the titles already stock the snacks. It's not exactly a new trend, since retailers have carried munchies since day one, but with DVDs helping to create a thriving home-theater business, anything retailers can do to further the theatrical experience makes sense.

“Video stores are having great success with snacks, as they always have,” said Eric Biben, sales manager for East Coast Video Concessions, a leading supplier of snacks, candies and other items to Midwestern stores and elsewhere.

“They are easy to carry, and you can add products without using a great deal of capital. Then with the novelty candies -- items tied into popular children's movies -- the items can really see a boost in sales.”

Combining videos and gumball machines also pays off for retailers, said the people at Pro Design & Vending Technologies.

“It's engaging, it's flashy, and the repeat play is incredible,” said Pro Design sales manager Tony Consoli. “It generates revenue and attracts both kids and adults.”

Pro Design has placed the machines in large as well as small video stores in the United States, Canada and Europe.

“Retailers are having success running promotional contests with winning gumballs,” Consoli said. “You take a winning ball to the front desk and maybe get entered into a contest for a free DVD player, or a few nights of free second rentals. It's a way to earn revenue on slow nights. The machine has theater-style ticket stubs, so it fits into the theme of the industry.”

Snacks and movies enjoy a long history together. Pez candy and nostalgia go hand-in-hand, and Pez Candy Inc. offers its product in video stores in 47 states.

“It comes in a self-contained shipper, a compact package,” said Pez video sales representative Hod Turner. “We use a soft-blue color with the name Pez prominently displayed. After 50 years, the name enjoys a little cachet.”

Pez enjoys instant brand recognition, Turner said, because the company created the interactive toy with candy.

“It has an excellent price point,” Turner said. “You can sell it for a buck and make a good mark-up.”

Pez features 17 different assortments, often using characters familiar to movie and TV fans. Besides the Flintstones, Garfield, Peanuts and Winnie the Pooh characters, Pez has enjoyed a longtime relationship with Disney characters, including Mickey Mouse, Goofy, Donald Duck and others. Pez is about to launch a new “extreme” line with these characters, a line that will have a bit of an “attitude,” Turner said.

“It's to give the product a little more oomph,” he said. “Kids are into the X-Games and things like that. This line will reflect that attitude.”

Pez is also introducing a Bob the Builder line and also recently introduced sour candy to go along with the traditionally sweet candies.

“We're set up for both the mom-and-pops and the larger retailers,” Turner said. “We'll ship as little as one case anywhere or as much as they want.”

And retailers are always looking for new ways to incorporate snacks into stores.

“We have a wide variety of candy, popcorn, soda and chocolate-covered popcorn, which is more of a novelty candy the customers really like,” said Frank Slugaski, CEO of the Tommy K's video chain, with 18 stores in Connecticut. “We're trying to provide an eclectic mix of confections. We have a local person who makes the chocolate-covered popcorn.”

Costs are minimal, Slugaski said. All that's needed is a cooler, a couple of free-standing shelves and a glass counter already built into stores.

“It's near the checkout area for impulse purchasing,” Slugaski said. “But each of our stores is configured differently, and each store places an emphasis on the snack that those particular customers seem to like most. We do better with soda in the summer months and chocolate in the fall and winter. The most important thing is to keep the items fresh.”

Videos and snacks are a natural, he said.

“It's like a theater experience, when you munch on something during a movie,” Slugaski said. “It makes for a better viewing experience.”

Video stores and pizza also are longtime partners.

“There are natural similarities,” said Jerry Doty, director of marketing for Figaro's Italian Pizza Inc., a leading supplier of pizza for video stores, standalone kiosks and other businesses. “Video and pizza are largely impulse purchases once you arrive for the first time, and then after the first experience, consumers plan on coming back.”

Cross-promotional opportunities are plentiful, Doty said, with discounts on certain videos that tie in with pizza discounts.

“There is also ease with staffing, because cross-training is easy to do,” said Doty, whose company offers a full-service package of training and equipment. “Running a pizza store is not that big a jump from the video business.”

Taste of Nature Inc. also has latched on to the connection between movies and candy. The company has done well at retail with such morsels as Cookie Dough Bites, Muddy Bears, Sqwigglies, Jolt Cola Energy Rush, Cotton Candy Swirl and Sour Cotton Candy Swirl.

Last year, things really took off for Taste of Nature's sour “mutant” candy that tied into the release of Spider-Man. On April 1, the company will make available Hulk Sour Gummies and Hulk Cotton Candy, 10 weeks before the release of the much-ballyhooed Universal Pictures film featuring the celebrated comic-book character The Incredible Hulk.

“Retailers did very well with the Spider-Man candies, and we feel there are a lot of similarities [between the two characters],” said Taste of Nature co-president Scott Samet. “They are both based on comic books, and both were developed 40 years ago and have loyal followings. We came up with the sour mutant candy idea, then used the same sort of motif when we developed the Hulk ideas. The graphics are clearly different, but the candy is the same.”

Retailers are attracted to the idea, Samet said, because they see advantages in early theatrical tie-ins.

“The video retailers like to use whatever is going on in theaters,” he said. “That drives their business. Any high-profile movie is going to be a big title in a video store.”

Taste of Nature has been working with video stores since the mid-1990s.

“We work with national chains, and we work with independents,” Samet said. “We develop items suitable for those venues. We design for what fits on the shelf, what kinds of sizes attract consumers. We do things with sharp, edgy graphics.

“It's important to tailor the candy and the packaging based on retailer needs, rather than slam a convenience store candy into the video retailer market.”

Taste of Nature is now preparing a candy for the late-2003 theatrical release The Cat in the Hat.

“These kinds of tie-in will be our focus,” Samet said, “The future looks very good for candy and snacks at retail.”

Con Agra Snack Foods, meanwhile, provides microwave popcorn to retailers in the form of Act Two and Orville Redenbacher brands.

“Popcorn is the No. 1 [snack food] category for video retailers,” said Scott Arbuckle, director of convenience stores for Con Agra Snack Foods. “From movie theater buckets to bags, almost everybody has it.”

Concessions are a “100 percent incremental cash register ring,” Arbuckle said. “Our feedback from retailers is that concessions sales do not cannibalize movie rentals. The profit margin for food items is greater per square foot than any other product in the store. It's repeat business with automatic resale potential.”

Con Agra uses the same popcorn formula used in 80 percent of theaters, Arbuckle said.

“As the video business has softened in the last eight years, retailers needed alternative revenue sources,” he said. “That's when they seriously embraced the concession business. Retailers have become true merchandisers. When you talk to the chains, you hear a history of how all have been able to turn their concession business into a significant percentage of their operations.”

Jim Watkins, the man who invented microwave popcorn before selling his company many years ago, started Popz Microwave Popcorn three years ago. Watkins has returned with five flavors: kettle corn, jalapeño butter, movie butter, natural and cheddar cheese.

“For the same price as other leading brands, our popcorn pops up about 50 percent more volume,” said Janette Carter, Popz's marketing manager. “As much as there is, retailers are amazed at how quickly it runs out through sales.”

Working with Dee Sexton, the company's national sales manager, retailers are adding the small, customized Popz racks in locations across the country, Carter said.

“We are new, but we have experience with people who have been in microwave popcorn since its initial stages,” she said. “We offer a tub of popcorn that feeds a family of four, so retailers are finding it to be a no-brainer.”

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