GROSS REVENUES

SUSAN ZIMMERMAN

Some supermarket merchandisers are a bit hesitant to put a product called S.N.O.T. on their shelves. But they're only grown-ups, after all. What do they know?

A lot of kids between 4 and 12 years old may think S.N.O.T. (for Super-Nauseating Obnoxious Treat) is real cool, and would not hesitate to buy it.

S.N.O.T. notwithstanding, the children's novelty segment of candy is starting to get the attention of supermarket candy buyers. Once the domain of the corner novelty shop, candy with kid appeal is finding its way into mainstream food stores.

Among the supermarkets said to be testing or incorporating children's novelty sections are Kroger Co., Publix Super Markets, Albertson's, King Soopers, Safeway, Smith's Food & Drug, Schnuck Markets and Bashas' Markets.

The products are a study in how to gross out adults. S.N.O.T., made by Sherman's Confections, Covina, Calif., is liquid candy packaged in clear plastic noses. It comes in four colors and is one of a growing number of new candy varieties that kids crave for their shock value as well as their flavor sensations.

Sherman's Mad Dawg fizzy gumballs make chewers foam at the mouth; Glenn Candies' Space Worms look like larvae; a number of novelty candies turn kids' mouths jarring shades of blue or green.

Supermarket buyers interviewed by SN said they are waking up to the fact that items like S.N.O.T. are worth looking at and experimenting with. Some operators are finding they are strong performers at the checkout. Others are placing them in special kids' sections and they're using shippers in secondary locations, such as in the cereal aisle.

The key, said some sources, is to loosen up a little. While a product named S.N.O.T. may not be the ideal image builder for a supermarket, retailers who dismiss kids' novelties outright may be missing out on good sales and profit opportunities.

Matt Wojciechowski, vice president of Roundy's Pick 'n Save Ohio division and a father of teen-age children, thinks so.

"Some companies are braver -- willing to try things that are new and different. Those are the companies that pick up the extra quarter or 50 cents" in each profitable impulse sale of novelty candy, Wojciechowski said.

Each of the 78 food and general merchandise stores operated by Fred Meyer Inc., Portland, Ore., devotes a 4-foot section, 6 feet high, to children's novelties as part of the chain's typical 60-foot-long candy department.

Hot sellers from those sections include GobStoppers, Nerds, Just Born's Mike and Ike and Hot Tamales, Concord Confections' Shock Tarts, SweeTARTS, Charms Co.'s Super Bio Pops, and Concord's Tongue Splashers, said Nick Oakley, candy and tobacco accessory buyer for Fred Meyer.

"It was the most sensible place to put them. We didn't consider putting them elsewhere," Oakley said.

Items are all priced under $1, with occasional in-and-out deals on higher-priced items, such as Laser Pops and the Candy Caller, which looks and sounds like a touch-tone phone but is packed with candy.

Although traditional candy items are advertised almost weekly, the children's novelty section is seldom included in Fred Meyer's ads.

"People find out about it by coming into the candy section," Oakley said, adding that children do shop in supermarkets. He declined to discuss specific sales figures, but said the children's novelty sections are increasing overall candy sales and profits.

Oakley selects the children's candy himself.

"It's fun because it changes. It's an ever-changing kind of category, and you need to be flexible because items come into and go out of popularity," he said. "You have to be prepared to discard an item more rapidly than you would with other supermarket items."

For research, Oakley relies on manufacturers, gets input from his own kids and uses common sense.

Fred Meyer is not carrying S.N.O.T. or Mad Dawg, he added. "It's partly a matter of not wanting to offend our customers, but it's also the packaging. Mad Dawg was introduced in a [candy store-style] jar and is sold by the ball. We need items like that wrapped in tubes for peg merchandising," Oakley explained.

Wojciechowski of Pick 'n Save said he actually isn't sure whether his stores carry S.N.O.T.. He said a broker stocks the four units' checkout displays of children's novelty candy.

The Columbus, Ohio-based executive is sure, however, that Amurol's Bubble Tape, Willy Wonka's Nerds and other children's novelty candies sell better and provide more profit than many traditional checkout candies.

About 18 months ago, Pick 'n Save store managers discovered many mainstream checkout candy items were going out of date before they were sold.

"We were shocked to find out that traditional candy -- the candy you would expect my generation to buy at the checkout -- was going outdated," he said.

Wojciechowski commissioned dueling revamps of those racks. A traditional candy company supplied a customized mix of gum, mints and other items at one store; a broker who specializes in novelty candies designed a completely different mix for another store. The test ran six months; children's novelties won.

All four stores now have what Wojciechowski calls "contemporary candy sections," rack-jobbed by the broker, which contain a constantly changing selection of what's in vogue with the younger set.

The Ohio Pick 'n Save stores, ranging from 35,000 square feet to 57,000 square feet, are in diverse markets -- four small cities across the state that include agricultural as well as industrial Ohio River communities.

"I had two objectives. One was to customize by region -- each store is in a different region of Ohio, and each store has different, distinct buying patterns. The other was to provide greater appeal to younger people," he said.

By incorporating children's novelty candy at some checkouts at each store and putting frozen novelties or cold soft drinks in other lanes, Wojciechowski contends that he has achieved both goals. Movement and margins improved at the same time.

Wojciechowski declined to discuss sales figures, but said the children's candy section "seems to be working real well. It's hard to keep it stocked, and that's a good problem to have."

Pick 'n Save's primary competition on children's novelty candies is convenience stores, where many kids go to spend their allowances. However, Wojciechowski said, plenty of youngsters are captive customers for supermarkets: They come with their parents. Also, he said, kids seldom complain about prices.

He said profits are slightly higher on novelties than on traditional checkout candies, "maybe about 5%, and they are not as price-sensitive because young adults are not very price-conscious. Of course, no retailer is priced too high on these items, which retail for 25 cents to $1," he added.

The four stores try to underprice competitors, but the profit structure "allows us to still squeeze out that extra margin," Wojciechowski said.

Pick 'n Save's merchandiser units are wrap-around checkout racks, with magazines facing the customers waiting in line. For the customer alongside the cashier, the candy rack is to his or her right, with gum and mints in the top rows, candy bars in the bottom rows, and two rows of novelty candies at a child's eye level. Film and lighters are next to the cash registers.

In addition to checkout merchandisers, Pick 'n Save uses in-and-out shippers of novelty candies, including higher-priced items such as battery-powered, glow-in-the-dark Lazer Pops, made by Cap Toys, Bedford Heights, Ohio. Placed in cereal, toy or magazine sections, or elsewhere, these shippers have sold through, Wojciechowski said.

Novelty candies are included in weekly advertising, often at feature prices, especially at Christmas, Halloween, Valentine's Day, Fourth of July, Memorial Day and Easter. This Easter, for example, Willy Wonka's Easter Nerds and Willy Wonka's Runts Freckled Eggs, Spangler's Easter Dum Dums, Sunline Brands' SweeTARTS and Spree, and GobStoppers Eggs will be advertised.

Wojciechowski said he's heard of supermarket buyers who have been cautious about children's novelty candies because of possible negative reactions from mothers. "We pretty much disregarded that," without any ill effects, he said. He told the children's candy broker to try just about anything.

"If I thought something was in real bad taste, I might not carry it. If I need second opinions I go to our accounting department and our advertising department. "So far, I've seen a lot of items I thought were amusing and had shock value, but nothing that violates any company policy, as some videos do, and nothing I thought would be offensive to any particular group of people," he said. "These items grab your attention, and that's not far from what we do in retailing."

Fry's Food Stores of Arizona, Phoenix, is merchandising children's novelty candies in a checkout display and is testing endcap candy fixtures that would include children's items.

At least one checklane fixture, stocked by direct-store-delivery vendors, has been in use since August in most of Fry's 47 stores in the Phoenix and Tucson areas.

"It's a seven-tier rack on wheels, about 3 feet wide and as tall as a kid," according to Tom Sheldon, candy buyer.

The merchandisers contain about 35 popular varieties of children's candies, including Bubble Tapes, Tongue Splashers, suckers shaped like thumbs, and liquid candies in squeezable containers, such as a mini sports water squirt bottle, which Sheldon said is very popular.

However, he added, "I've tried to stay away from the disgusting ones. I draw the line at what I consider offensive. The ones that turn your mouth colors are OK, but anything that emulates bodily functions is a no-no, and I have no interest in candy maggots.

"I'm also the buyer for cigarettes and liquor, and I'm very sensitive to the feelings of particular segments of our customer base," Sheldon added.

"Kids are impressionable. There was a time when every retailer carried candy cigarettes, but cigarettes are not a casual matter anymore. I don't carry anything that emulates liquor or smoking, and we are trying to encourage the manufacturer to change the packaging of Big League Chew shredded bubble gum," which comes in a tin like chewing tobacco, he said.

A buyer for Dominick's Finer Foods, Northlake, Ill., could not be reached, but a spokesman at Ferrara Pan Candy, Forest Park, Ill., said Dominick's bulk candy section, which is part of the produce department, is generating strong sales of Ferrara's "Jurassic Park" licensed items.

Slater Browne, candy buyer at Smitty's Super Valu, Phoenix, said his company is thinking about adding children's novelty candies.

A buyer for a Florida retail chain said she is considering a 4-foot children's section, but would avoid potentially offensive items.

The buyer added that she is seeing a shift in overall candy sales from a strong seasonal base to an everyday, impulse buy, a trend that could augur increased merchandising of kids' novelties.

"All the traditional candy holidays are not as strong as they once were, but day-to-day candy sales have increased," she said. "We do a pretty good impulse business with shippers of candies we don't normally carry -- suckers and hard candies -- and we have asked a vendor to research what other kinds of children's products might work for us on an everyday basis.

"We might put a children's candy section across from cereal. Would it include Snot? No," she said.

Trader Joe's, South Pasadena, Calif., is not considering adding children's novelty items because they would clash with the chain's upscale image, according to Cara Kiyohara, a buyer.

"About the only children's items we carry are Advent calendars at Christmas time," she said.

Kids' novelties would not fit in well at 14-store Scott's Food Stores, Fort Wayne, Ind., where the candy presentation relies on candies with higher price points.

"We get some seasonal items in, but generally, we don't carry the junk candies -- the cheap stuff," said Dave Dickerson, grocery merchandiser for Scott's. "We've stayed upscale on candy at Scott's," where Easter -- not Halloween or Christmas -- is the top-dollar candy holiday. Chocolate bunnies, Cadbury eggs and high-end Easter baskets provide more profit dollars than candy corn, Dickerson observed.

However, two manufacturers of children's novelty candies said they, like Pick 'n Save's Wojciechowski, believe that supermarkets are missing the boat by not carrying more children's confections.

"Supermarkets should get a life for their confectionery section," said Jay Topper, who heads Cap Toys' candy division. "That's where the real growth is -- novelties."

Cap Toys' candy-filled toys retail for $2.99 to $4.99, he said.

A spokesman for Concord Confections, Concord, Ontario, said, "Supermarkets have been cautious when it comes to kids' candy, but they can make 50% to 60% margins, and it's not price-sensitive.

"Supermarket decision-makers seem to think it's only adults who shop in their stores, but a lot of adults have one or two kids along with them," he added. "In supermarkets that have this kind of merchandising, I've seen a kid stand in front of that section for the whole time his mom is shopping, with his dollar in his hand, trying to decide what he should buy."

A buyer for a major chain that is beginning to add some children's items concurred.

"Kids are in the store -- no question," the buyer said, "and someone is going to sell candy to those kids. Why shouldn't it be us?"