Candy Conflict: Emotions vs. Savings

December 18, 2009

If costumed characters at the door got branded candy this Halloween, as Nielsen research showed, what will Santa get with his milk and cookies by the fireplace on Christmas Eve?

If costumed characters at the door got branded candy this Halloween, as Nielsen research showed, what will Santa get with his milk and cookies by the fireplace on Christmas Eve?  The bet here is more brands - because data show that the store-brand candy share of 8.1% annually shrinks to 5.6% in the weeks leading up to Halloween, and we think that brands matter more to holiday home entertainment and personal gift-giving than the treats given to nameless, faceless ghouls and goblins.

Whether people splurge to impress, or simply take advantage of name-brand deals, as Todd Hale, senior vice president-Consumer & Shopper Insights, Nielsen, suggests, we think at Facts, Figures & The Future that people want the best they can afford for their guests, while they mask any signs of extreme economic duress.

The emotional connections people have with candy, and chocolate in particular, are legendary. Candy's roles in romance, in gratifying children, and in comforting hotel guests on the road with a nighttime pillow treat, are three examples.  

To these let's add the apparent correlation between candy and economic conditions. When people feel besieged by matters they don't fully control, at least they can help themselves feel better for a few moments by eating a small, affordable indulgence. While eating healthier is a definite consumption trend, don't underestimate the chocolate crutch.

So with consumers' candy 'dependence' on one side, and families' overriding need to save money with shorter shopping lists on the other, two opposing forces have affected candy performance in this recession.  How has candy fared? Not too sweet, not too bad, considering the extent to which shopping has changed.

Branded candies still command the vast majority of sales. Branded dollar sales of $10.2 billion were up 3.8% in U.S. food, drug and mass merchandiser stores (including Walmart) during the 52 weeks ended October 3, 2009, according to Nielsen data.  The private label share of the category approaches a half-billion dollars - $455.6 million to be specific - and that grew by 7.5% in the period.  All figures reflect prepackaged, UPC-coded products only.

However, it is the equivalized unit volume figures that demonstrate the power of the urge to save, and the ability of retailers to serve up store-brand alternatives that people like, often in bagged chocolate and non-chocolate segments. While EUV of branded candy overall dipped by 4.2% to 2.52 billion units in the latest 52 weeks, the EUV of private label candy rose by 5.5% to 225 million units, Nielsen noted.

On a broad scale, the 5.1% rise in dollar sales of non-chocolate candies to $3.68 billion outpaced the 3.3% boost in chocolate dollar sales to $6.98 billion.  

One of the non-chocolate segments that has grown best is marshmallows. Dollar sales of the fluffy confection rose 8.2% to $199.2 million in the latest full year, on a 0.8% EUV rise to 114.1 million units; of those sales, just $118 million were branded, the Nielsen figures showed. 

Lollipops were up 5.5% to $223.3 million, albeit on a 4.4% EUV decline to 54.6 million units.

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