Seasonal treats spur sales binge; retailers, vendors focus on holiday-themed confectionery - Food Merchandising

Discount Store News, Feb 20, 1995 by Laurie Freeman

Americans are consuming more candy and gum than ever before, and the forecast by candy industry executives is for another sweet year, especially for seasonal candy. That's good news as the AWMA Candy Show - Feb. 16 to 18 in New Orleans - approaches.

"Every indicator we have . . . is pointing to another strong year, and we're coming off the best year we've ever had," said Jim Tucker, vice president, sales and marketing, R. M. Palmer Co., whose company offers more than 400 varieties of special occasion and holiday candies.

"Holiday candy, in particular, is continuing to be popular with both retailers and consumers. That's where the growth is coming from."

Buyers from chains such as ShopKo, Revco and Michaels agreed.

According to Information Resources Inc., candy sales alone topped $5.9 billion in for the 52 weeks ended Oct. 9, 1994, a 3.3% increase from the same period in 1993. During that same time period, sales of candy rose 3.8% in food stores to $2.86 billion. Mass merchandisers topped that growth with a 6.7% increase to $1.6 billion, but sales through drugstores dropped 1% to $1.56 billion, IRI reported.

Retail sales of seasonal candy clearly are fueling the category's growth. "All of the major manufacturers are putting most of their new product emphasis on seasonal product, that's where the growth is coming from," Tucker said. "It's easier in many instances to do a new in-and-out product with a seasonal theme than it is to generate enough brand awareness for a new product to win it everyday shelf space."

A buyer for ShopKo, the Green Bay, Wis.-based discount chain, agreed. ShopKo is among several chains including Bradlees, Wal-Mart and Caldor that go heavily into Christmas seasonal novelty selections from suppliers like Houston Foods. Buyers at these chains noted that the tins of popcorn or cheese packs are terrific gift ideas, especially for last-minute shoppers.

"These are items customers don't shop around and compare, so retailers can get some good margins," said one buyer.

Houston is trying to duplicate its fourth quarter success with programs for Halloween and Valentine's Day.

According to the National Confectioners Association, more than 80% of all candy is bought on impulse, and retailers increasingly are building bigger and more elaborate display islands to take advantage of consumers' buying habits. In fact, some 75% of impulse candy purchases are made from those off-shelf displays, the NCA said. Per capita consumption of candy and gum is up to more than 22 lbs. per year; five years ago, Americans each consumed 19 lbs. annually, the association reports.

Much of what Americans consume increasingly carries a holiday or seasonal theme. Everything from Nestle USA's Butterfingers to Jelly Belly jelly beans from Herman Goelitz are packaged with an eye toward a specific occasion.

"The trade really makes seasonal sales happen," said Peter Cain, vice president of marketing, Herman Goelitz. "They're building bigger and better displays, they're putting them upfront and they're capturing consumers' attention." Goelitz does its part to cater to consumers' desire for holiday treats, creating an "Autumn" mix of Jelly Belly jelly beans, including cantaloupe, chocolate pudding, peanut butter and raspberry, that retailers can sell through Halloween and Thanksgiving; a Christmas mix, which includes candy cane, coconut, green apple and very cherry flavors, and its top-seller, the 30-bean Easter assortment. "In the last few years, our seasonal sales through retailers such as Target, Toys "R" Us, Kmart, Wal-Mart, Eckerd, Thrifty and Walgreens have increased dramatically," Cain said.

Seasonal candy also has the advantage of serving as an inexpensive gift, like the candy-packed CandyCaller telephone from BerZerk Candy Werks as a Christmas stocking stuffer.

"The packaging is not tied to a specific season, so we're seeing retailers do well with our line year-round," said Angela Stevens, marketing manager for BerZerk Candy Werks. "If a product has what parents want, the candy doesn't have to be packaged or tied to a specific holiday, but all special occasions."

Another aspect of seasonal candy is that many consumers like to use seasonal or holiday-themed confections as a decorating motif.

Ken Martin, assistant marketing manager at Ragold, noted that the company's Absolute Fruit, Velamints, Juicefuls and new Alpen ICE and Citrus ICE candies are more adult-oriented, and not usually given out to children as Halloween treats. But the company has seen significant sales of its candies around the holidays, "We've become part of holiday decorations," he added.

Baking also peaks during seasonal events and several retailers are offering Mrs. Fields baking chocolate chips to differentiate themselves from supermarkets. The chips are the same ones used in the top-of-the-line Mrs. Fields cookies.

At the other end of the spectrum, sugar-free candies also are gaining in popularity, fueled by new-product introductions from top-name manufacturers. According to Information Resources Inc., sales of sugar-free candy grew by 14.7% to $30.4 million during the 52 weeks ending May 29, 1994. E. J. Brach last fall introduced the first sugar-free candies made with Nutrasweet brand sweetener.