Candy, lately, isn’t just about fun

December 14, 2012

A healthier bent for the candy category could bring potential for new users.

The candy category has always had the corner on fun.  Chocolate goes with romance. Sweet treats make kids smile.  The category’s biggest selling periods surround Halloween, Easter, Christmas and Valentine’s Day.  And the current November-December holiday season drives 20% to 40% of retail confection sales, notes the National Confectioners Association.

Yet healthier choices haven’t been a big part of the category’s history—until lately.  Expansion of The YummyEarth and YumEarth organic, gluten-free brands of lollipops, gummy bears and sour beans show there’s a market for alternative sweets that carry a healthier position.

A key question for retailers and candy manufacturers today is whether treats made with healthier ingredients and processes could attract new users to the category.  Could a newer brand like Unreal offer the taste people want with a better nutritional profile than other candies, or even power bars?  The company claims to have 40% less sugar per serving than America’s best-selling candies, no partially hydrogenated oils, and other nutritional edges.

F3 thinks the brand has a better nutritional profile than many power bars on the market, and could convert people who eat power bars into candy consumers.  Also, its hip packaging, apparently aimed at Millennials, could suggest another new direction for the category.

Efforts like these don’t rise to the health benefits of broccoli, after all. Yet F3 believes new product formulations, preparation techniques and appropriate messaging and packaging could help people more smartly integrate their desires for sweets with a balanced diet.  In the process, the candy industry could diminish some of the guilt people feel when they eat candy, and it would be seen as more responsible in a nation struggling against overweight, diabetes and other health conditions.  The sooner the industry moves this way, the better its chance of averting legislative efforts such as soda taxes.

The industry has leveraged the antioxidants and low glycemic index of dark chocolate.  Some of this is evident in the 15.5% dollar sales rise of candy and individual snacks to $1.09 billion between 2009 and 2011 (National Association of Specialty Food Trade figures).

Meanwhile, dollar sales for both chocolate and non-chocolate candy continue to rise this year.  According to Infoscan Reviews of SymphonyIRI Group, a Chicago-based market research firm, the dollar sales of total chocolate candy in food stores only were up 3.04% to $3.21 billion during the 52 weeks ended November 4, 2012.  This occurred despite a 5.22% unit sales decrease.  By comparison, food stores posted 3.22% growth to $1.47 billion in total non-chocolate candy sales during the same period, even though unit sales dropped by 1.42%.  The channel experienced a 5.57% slide in gum sales to $742.2 million in the 52 weeks, on a 6.40% unit sales fall.

Trends were similar across multiple channels, the SymphonyIRI Group data report.  Total U.S. multi-outlet figures for supermarkets, drugstores, mass market retailers (including Walmart), gasoline/convenience stores, military commissaries, and select club and dollar stores show the following:  a 4.29% gain in total chocolate candy sales to $12.17 billion, on a 3.68% unit sales decline; 7.13% growth in total non-chocolate candy sales to $6.87 billion, on a 1.79% unit sales increase, and a 4.73% drop in gum sales to $3.42 billion, on a 4.88% unit sales drop.