A Better-For-You Bonbon

Natural positioning and an emphasis on smaller-sized pieces can help retailers boost sales of store brand candy.

Today, candy can be found in an abundance of flavors and formats — from sour gummies in kid-friendly shapes to decadent chocolate-covered caramels that pair well with an adult's afternoon cup of coffee. And it is an indulgence that even cash-strapped and health-conscious Americans do not seeming willing to give up. In fact, U.S. Census data show per-capita consumption of candy reached 24.7 pounds in 2010 — up from 24.3 pounds in 2009.

According to data from Chicago-based market research firm SymphonyIRI Group, sales within the total confectionery category grew 4.2 percent during the 52 weeks ending Sept. 4 — led by chocolate, which was up 6 percent (food, drug and mass merchandiser outlets, excluding Walmart). But Thom Blischok, global president, innovation and strategy for the company, suggests retailers can expect growth to be flat for store brand candy without "a huge amount of innovation" on that side of the business.

"Mars and Hershey have demonstrated good innovation," he notes. "The challenge will be to demonstrate this innovation not only as snacks, but occasion-based activity."

Trends with traction

Current trends underway certainly spell opportunity for retailer innovation, however. Barry Rosenbaum, president of Hicksville, N.Y.-based Nassau Candy, points to "better-for-you" formulations as one trend that "absolutely has staying power."

Chris Schmidt, consumer health industry analyst for Euromonitor International, Chicago, agrees.

"Look for more ‘no’ claims [such as] no HFCS, no artificial colors, etc., and more ‘natural’ positioning," Schmidt says.

For its part, Nassau Candy has aligned and will continue to align product development with the wellness trend, Rosenbaum says — using, for example, all-natural flavors and colors and non-GMO ingredients whenever possible.

Another "trend" that is here to stay is a "tremendous emphasis" on food safety, he adds, noting that his company has made many plant improvements and earned SQF certification in response to ensure the highest safety standards for both consumers and retail customers.

Trends on the horizon

A still-emerging trend, but one that is closely linked to the obesity/wellness issue, is that toward smaller, often bite-sized, candy pieces. Many consumers are satisfied by eating one or two smaller pieces of candy, Rosenbaum says, and they also end up with more pieces to the pound — a perceived benefit.

Schmidt also sees growing interest in high-growth niche areas such as Aussie-style licorice.

In a report on its Global New Products Database (GNPD), global market research firm Mintel International also points to several emerging trends to watch spotted at the National Candy Association's (NCA) Sweets & Snacks Expo this past spring.

"Interesting health-positioned products from NCA Sweets & Snacks Expo 2011 largely tapped into the functional food trend or focused on fruit content — both ways of imparting health without overly impacting on taste (compared to, say, limiting sugar/fat content)," Mintel states.

Although "ethical" claims remain a niche area in the confectionery market, Mintel notes that they are beginning to appear more frequently.

"Some 7 percent of new products picked up from NCA Sweets & Snacks Expo 2011 and featured on the GNPD were flagged with the ethical/environmental claim category — the focus on eco-friendly packaging," the report says.