Sweet Life

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Sweet Life

By Katie Martin - 04/17/2017

While candy may account for less than 2 percent of the average American's caloric intake, most people eat candy about twice a week, according to the National Confectioners Association. Even though many espouse a healthier lifestyle when it comes to food choices, Americans still love their candy.

Candy sales (gum, chocolate and non-chocolate) were $24.4 billion for the 52 weeks ending March 10, 2017, according to data from IRI, which tracks sales in grocery, convenience, drugstore and mass market outlets. From 2015 to 2016, candy sales grew 2.6 percent, according to Nielsen. In the specialty food industry, chocolate and other confectionary is firmly entrenched in the top 10 categories, ringing up $2.195 billion in sales for 2014-2016; Americans love affair for specialty sweets is growing, the category's sales increased 10 percent, according to the Specialty Food Association's State of the Specialty Food Industry 2017.

Seasonal Highs
Seasonal holidays accounted for 19 percent ($3.5 billion) of total candy sales for the year ending April 30, 2016, according to Nielsen. Nielsen data indicates that Easter is the largest candy-selling holiday followed by Christmas, Valentine's Day and Halloween.

However, the retailers The Gourmet Retailer spoke with indicated Christmas was the biggest holiday for them. "For Christmas, people are buying gifts for family members, co-workers, teachers, clients, etc. People tend to plan more for Christmas," says Amy Hansen, owner of Amy's Candy Bar in Chicago. But she also noted that the two biggest sales days were Valentine's Day and the day before.

Big Top, in Austin, Texas, sees the most sales in March when the SXSW conference is in town and kids are out of school for spring break.

Jennifer Strickland, co-owner and executive director of franchising for River Street Sweets • Savannah's Candy Kitchen in Savannah, Ga., agrees that Christmas is huge for seasonal candy shopping. "For us, it's Christmas without a doubt. We do 75 to 80 percent of our mail-order business during the Christmas season – Thanksgiving to Christmas." River Street Sweets • Savannah's Candy Kitchen started its mail-order business due to customers constantly asking the staff at the stores if they could ship the items they had selected.

For Brandon Hodge, owner of Big Top Candy Shop in Austin, Texas, Christmas and Halloween are big business, but his biggest selling season is the month of March, mainly due to spring break and the SXSW Conference and Festival that takes place in Austin, which could be considered the city's own micro-holiday.

Everyday Power
Seasonal candy sales may garner the most attention, but as retailers prepare for June's National Candy Month, they need to remember that consumers buy candy year-round. According to Nielsen data for the 52 weeks ending April 30, 2016, everyday candy sales were nearly $18 billion up almost 3 percent from the year before while seasonal candy sales grew less than one percent.

In their everyday purchases, consumers are looking for a variety of products. One of the top trends is sour. "People love sour," Hansen says. "We've definitely expanded our sour line. And of the bulk candy we make, they're wanting more and more sour."

The same holds true for It'Sugar, a chain of nearly 90 candy stores across the United States. "Customers love our sour candy selection so much that we decided to team up with Sour Power to create an exclusive 3.5-foot sour belt, which is doing incredibly well," says Jeff Rubin, founder and CEO of It'Sugar, based in Deerfield Beach, Fla.

"Kids love sour stuff," Strickland agrees. "Anything in hard candy and anything that's sour," is selling well at River Street Sweets • Savannah's Candy Kitchen.

Hansen also is seeing a lot of requests for products with hazelnut and peanut butter. Toffee also is an oft-requested item as are alcohol-infused products, especially gummies. "Champagne bears have been really popular this year," she says, noting that the alcohol is "burned" off in processing.

It'Sugar offers an array of candy items, but has seen demand for nostalgic, retro brands decline.

Products featuring bacon, sea salt and sriracha have seen a rise in popularity in recent years at Big Top Candy Shop. Salt is another popular flavor for River Street Sweets • Savannah's Candy Kitchen, which sells a lot of salted caramel, a "trend that is not going anywhere. If anything, people want more products with salt on them," Strickland says.

Flavor combinations also seem to be popular, Strickland adds. "Different taste combinations, people are really interested in," she notes, especially sweet and salty, which has always been a popular combo.

Fast Fact
Seasonal holidays account for 19% of total candy sales.

Candy Sensitivity
River Street Sweets • Savannah's Candy Kitchen is seeing demand for gluten-free, which works well for candies as many are naturally gluten-free. The stores don't necessarily advertise the gluten-free items as it isn't a sales driver, Strickland notes.

Amy's Candy Bar also is seeing increased demand for gluten-free as well as nut-free, all natural and vegan. In general, customers are interested in quality, fresh products. "They're looking for quality even when it comes to their candy," Hansen notes. "People's overall eating habits are becoming more quality focused."

Hodge is seeing an uptick in requests for vegan candies, something he attributes to Big Top's location in Austin. "We keep a very detailed list of all the candies we have available for our customers to reference," he notes. The vegan list of products also often meets the needs of customers looking for certain free-from or allergen-free products.

For allergen-free, Amy's Candy Bar has a few items that are nut-free, mostly prewrapped, but for the bulk items, the staff scoops out all candies, so they control the scoops to help keep cross-contamination at a minimum. The staff also is willing to open a new bag for allergen-sensitive customers to ensure the candies they buy have limited risk of cross-contamination.

Big Top's product line is not friendly to those with nut allergies. "I can't call a candy to mind that doesn't carry the warning that it's produced in a factory that handles nuts, even if the candy itself doesn't contain nuts," Hodge says.

Sugar Rush
Sugar-free may have been a hot buzzword a few years ago, and while those, like diabetics, who need to watch sugar intake continues to grow, sugar-free is not growing for It'Sugar, which is experiencing flat sales, Rubin notes. At Big Top, consumers aren't not necessarily concerned with sugar-free but they are wanting to know what sweeteners are used, Hodge says.

Requests for nostalgic items also is on the decline. "I've reduced a lot of the nostalgic items that we carry in the last couple of years," Hansen says. "I think a lot of times with the nostalgic items the quality isn't as good."

Retro candies also are declining in popularity for It'Sugar. "With time, the retro customer base shrinks," Rubin says. Now, his stores are selling more items like Nerds, BlowPops and Airheads, which are nostalgic for the younger consumers.

Chocolate is always a perennial favorite, and chocolate-covered products remain popular. For Amy's Candy Bar, chocolate-covered gummy bears are in increasing demand. "We've had them since the beginning, but we definitely sell more now," says Hansen, who opened her store in 2011. "People come to us and they're looking for them."

Chocolate-covered bacon is one of Big Top's top sellers. "To our knowledge, we were the first candy shop to have produced [chocolate-covered bacon] in the country, and we sell hundreds of bars of that a week," Hodge says.

At River Street Sweets • Savannah's Candy Kitchen, chocolate-covered peanut brittle and chocolate-covered glazed pecans are selling well.

Amy's Candy Bar is seeing more demand for high-quality products.

What's Next
For future trends, it all depends on innovation, Rubin notes. He adds that manufacturers continue to keep the newness in flavors, shapes and package design.

Flavor combinations may hold the key to the next trend, Strickland says, as well as an adherence to quality.

Hansen predicts that black licorice will be an up-and-coming flavor. "I think it's a niche market," Hansen says. "Black licorice is such a polarizing flavor, but I think it's going to try and gain traction." She sees hazelnut continuing to grow as well.

While retailers are always looking for what's going to be the next big flavor or trend in the industry, Hodge offers a bit of a cautionary note. He like many others turns to the internet and videos to see what's generating buzz, but "I often wonder if we, and that's the ephemeral we in the business, are trying too hard," he says.

"Everyone is so quick to tout something as the hot, new trend" on social media sites, but he also notes that "either trends are not lasting as long as they used to or it's just all about trying to establish a buzz that will create the trend on its own." Much of it is solicited or paid for "noise," he adds and it can be hard to distinguish what is really taking off from what companies are paying to take off. "It often feels like missed opportunities upon first viewing, and then you realize it's this little flash in the pan that's created more for views than for the taste," he notes.

Retailers need to keep in mind what business they are in. "We sell boxes of candy that say things like ‘absolutely no nutritional value' on them, and our customers completely embrace that," Rubin says.

While candy may be a product that isn't necessary for life, it is a treat in which consumers like to indulge. "We always felt like if we could get somebody in the store, we're gonna sell them something," Strickland says. "People love to try new things. I think that's just part of getting people to want to come back and try new stuff. It's part of the magic of having a candy store."

Sweet & Snacks Expo
May 23-25
McCormick Place, Chicago
www.sweetsandsnacks.com

Looking for what's next in candy and snacks?
Put yourself in the center of the whole treating and snacking world at the National Confectioners Association's 20th anniversary Sweet & Snacks Expo. Attendees will have access to the most candy and snack people and products while gaining a real competitive edge to grow your business. More than 760 exhibitors are expected along with 17,000 attendees. In addition to the expo floor, the show will host 17 data-driven learning sessions that focus on trends, retail technology, shopper engagement and state of the market for the candy, snack and specialty segments.