Hard candy sales drive sweets growth at mass merchandisers; consumer interest in fat-free snacks on the rise

Discount Store News, Nov 6, 1995 by Laurie Freeman

With sales of sugar candy growing at a faster clip than sales of chocolate candies, it's no surprise that Hershey Chocolate U.S.A. is readying an early 1996 introduction of a hard candy called TasteTation.

TasteTation, which Hershey's sales force is showing to retailers this fall, is similar in shape to Werther's Original, marketed by Chicago-based Storck USA. TasteTation comes in four varieties--caramel, butterscotch, peppermint and, of course, chocolate--and since it's from Hershey, it's assured of shelf space, according to retail buyers.

"We're giving more room to candy and snacks, reconfiguring the department to make room for this high-trafficked area," a buyer for a large Midwestern-based mass merchandise chain said. "We're interested in anything that's new, especially if it's connected to a well-known brand name like Hershey."

Added space for candy and snacks at discount stores coincides with the tremendous sales growth discounters are experiencing in the category this year. Sales are up through all distribution channels this year, with supermarkets, clubs and convenience stores up about 3%. Drugstores are up more than 5%, while discount chains are looking at 11% growth, according to Information Resources Inc., Chicago.

Confectionery industry executives noted that there's plenty of growth potential in the hard candy sector, although it is dominated by some heavy hitters. Werther's, Leaf Inc.'s Jolly Rancher and Lifesavers, produced by RJR Nabisco's Planters Lifesavers unit, are the top brands in the $406 million sugar and hard candy segment, according to IRI.

Leaf has been on a roll this year, riding the tide of consumer preference for sugar snacks with fewer calories and less fat than chocolate candies.

"The new nutrition labeling has given non-chocolate candy a tremendous boost," said Kathi Mocniak, vice president, marketing, Leaf. "Sugar candy, because it is sold as piece candy, is perfect for a grazing eating style."

In 1994, chocolate consumption per capita declined slightly to 10.8 lbs. per person, while non-chocolate reached 10.7 lbs. per person, matching chocolate for the first time, the U.S. Department of Commerce reported. New snack product introductions worldwide were up dramatically in 1994, led by sugar candy, up 71%; gum, up 41%; and chocolate, up 40%.

Mocniak pointed out that adults eat candy three to four times per week, while 35% of children of all ages eat candy every day. Candy is the No. 1 food choice for after-school and evening snacks, reported a study by the International Mass Retail Association. Youths ages 8 to 12 spend an average of $47 per year on candy, while their older siblings ages 13 to 17 spend $72 per year.

Aiming directly at consumers' interest in fat-free snacks, Leaf is making available a booklet that underscores that its Switzer licorice, Jolly Rancher hard candy, Chuckles, Good & Plenty and gummies are fat free.

There are three trends that are really hot right now, said Teni Kaminski, spokeswoman for Brach & Brock Confections, Chicago. Sugar candy, for its non-fat and small-piece attributes, is selling well, as are bulk candies such as Pic-a-mix. In its Pic-a-nex selections, Brach & Brock is testing the inclusion of chocolate-piece candies in selected markets, as well as more seasonal candy selections.

Fruit snacks is the third segment identified by Brach & Brock as holding sales potential, again for the gummie-like snacks' low-fat properties. "Moms are looking for small snacks to tuck into lunch boxes, something that comes in a six- or 12-piece package, enough to share but not a lot of fat," Kaminski said. Fruit snacks tie in well with drug and discount snack aisles, earning placements between candy and breakfast/granola bars.

Despite the attention shining on non-chocolate candies, neither manufacturers nor retailers have given up on chocolate candies. "The entire category is expanding, spurred by the continued interest in seasonal, holiday candies," said Jim Tucker, vice president, sales and marketing, R.M. Palmer Co. "Seasonal candy continues to fascinate consumers, and it continues to grow."

Palmer, which specializes in novelty candies, is seeing sales increases driven by new seasonally linked items. "It's an easy way to add a festive note," Tucker said. "It's a decoration, and it's viewed as an appropriate item to have around the house."

M&M/Mars this fall rolled out M&M Minis, the first M&M candy "made just for kids," said Marlene Machut, external relations manager, M&M/Mars. The new minis are one-third the size of regular M&M's, similar to the minis available in baking aisles. They are packaged in collectible toy vehicles meant to appeal to the sandbox set. M&M Minis debuted in a yellow school bus, with additional vehicles such as a circus train and a fire truck slated for future introductions.

M&M/Mars, which spends about $115 million on advertising annually, according to Competitive Media Reports, is backing its category-leading brands this fall, including M&M's, Snickers, 3Musketeers and Milky Way, with new TV commercials. This will include ads that showcase the new blue M&M's. In the case of Snickers, consumers will be asked "Why wait?" before biting into the peanut butter and chocolate confection.