SPREADING THE WEALTH

RICHARD TURCSIK

Retailers are counting on 2-pound sizes to make sales of jelly roll.

"The business is now with the 2-pound jars. That is where the volume is," said Pat Redmond, buyer, Rosauers Supermarkets, Spokane, Wash.

The jams/jelly/preserves category has historically been tied in with the economy. In bad economic times, when consumers really have to pinch pennies, an inexpensive peanut butter and jelly sandwich is a lunch box staple. But in strong economic periods, consumers tend to dine on more extravagant fare.

Nonetheless, astute retailers have been able to increase category sales at their stores, in part, by focusing on larger jar sizes.

"Jelly is actually a declining category in the Houston market, but our sales are slightly up," said Peter Kemp, category manager, Randalls Food Markets, Houston. "I've run a lot of ads on the two pounders -- display and feature -- which has given the category a lift."

To increase sales, Kemp and other retailers said it is necessary to promote the 2-pound jars of grape jelly and strawberry jam.

"On all brands other than Welch's, we try to get the 99-cent retail. Welch's is always the quality of the 2-pound jars. They don't use deep discounts to drive the volume. I would rather use Welch's as a profit item. I have been pushing Kraft, Smucker's and Bama, as well as my private label," he said.

According to Information Resources Inc., Chicago, for the 52 weeks ended Aug. 11, the jam/jelly/preserves category had supermarket sales of $656.7 million, a 2.1% decline. Unit sales declined 4% to 349.3 million. The largest manufacturer is J.M. Smucker Co., followed by private label, Welch Foods (including Bama), Polaner (a division of American Home Products) and Knott's Berry Farm.

Aside from private label, which saw unit sales increase 6.9%, and the upscale Knott's Berry Farm, which saw a 5.9% increase, the other leading brands exhibited slight to lower-double-digit volume declines.

"If we can find 2-pound jars at 99 cents, and if they are merchandised in a display and advertised, then they sell very well," said John Mitchell, a buyer at Strack & Van Til Supermarkets, Schererville, Ind.

"About the only thing we are seeing that is building sales is the 2-pound jars," said Larry Mink, head merchandiser, James & Sons, Union City, Tenn. Mink said manufacturers need to promote the category more.

"There is no outside push on it from the manufacturers. If they are not going to push, then how are we going to push? If they ran more TV commercials or created more recipes using jellies it would help," he added.

Meanwhile, large displays, sharp feature prices and frequent advertising also can be used to revive sales in the stagnant category.

"We find the jelly category to be advertising driven," said Mike Shultz, senior vice president, Hughes Family Markets, Irwindale, Calif. "Advertising does stimulate sales. Customers tend to purchase not only their favorite flavor, but will try other flavors as well when they see an attractive price tag."

"The jams and jelly category does very well in our stores. Back-to-school has a lot to do with it," said Mitchell of Strack & Van Til.

Strack & Van Til devotes a 20-foot section to the category, and stocks Kraft, Smucker's and several smaller regional brands.

"Jelly still reacts pretty well to advertising and promotion, but as a category jelly sales are down," said Butch Smathers, vice president, merchandising, Western Supermarkets, Birmingham, Ala. "If we put jelly on the front wall and advertise it at a hot price and as a lead feature item we still sell a lot."

Shultz of Hughes Markets said, "The steps I have been taking to improve sales in this category are to get more aggressive and push the manufacturers to deal deeper and more often."

In his stores he finds the 16- and 18-ounce jars as leading sellers.

"The all-fruit varieties have added a few new players and flavors, but the sales have not been overwhelming," he noted.

To increase the profitability of the category, Randalls' Kemp said he is placing a premium on the endcap real estate, including side stacks.

"Basically the real estate has to be bought. When I have put a two pounder on sale, I tell the manufacturer I'll have the 99-cent retail if he comes in at 'X' cost. I tell him if he wants displays or side stacks at the stores he needs to have 'X' cost minus a certain percentage. Displays drive volume and on a category that is declining he gets a bump in his volume, gets the ad and gets the sell-through because he basically bought the real estate on the side stack," he explained.

Because Randalls primarily operates upscale stores, Kemp has also been able to increase sales of the more expensive varieties.

"Because my consumers enjoy the upscale products, such as Polaner, I have been running the Polaner line at a two for $3 and that has been working very well for us," he said, noting that displays and multiple price points lead to impulse purchases.

Some retailers are also looking to build sales of imported and more exotic flavors.

"I am also experimenting on a lot of direct-store-delivery items. I'm bringing in a good variety of upscale products, especially in our upscale Flagship stores," said Kemp.

"We have a few products from France, English jams and products from other parts of the world. We also have a lot of American upscale products to give the consumer some of the variety that is out there," he said.

Rosauers' Redmond noted, "We're doing a little more with specialty items, including some of the more exotic items, like huckleberry and marionberry, and some imported items."