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- RESEARCH & AWARDS
Bad times are spelling opportunities for candy and nut sales
Jefferson may be on to something there-the harder retailers work at bringing customers into the private label fold, the more luck they seem to have at increasing profits and gaining a bevy of new consumers.
Lately, that work has taken on the form of expanded private label offerings at a higher quality, and promoting those private labels akin to how the national brands might act. Creative graphics that stand out and catch the consumer’s eye are sure to catch their dollars as well. Trader Joe’s candy lines, for example, are often cited as some that set the bar for private label packaging. Spending the extra money for a higher finish, and thinking green and minimal for packaging are where retailers should look when thinking about nuts and candy packaging, said Jean-Francois Bonnet, pastry chef and owner of Brooklyn-based Tumbador Chocolate.
But it’s not just what’s on the outside that will keep the consumer coming back a second or third, or-hopefully-infinite number of times. Private label nut and candy products also must have that special something on the inside of the packaging as well. To provide that, manufacturers are turning to new products and flavors and, chew by chew, it seems to be working.
Sweetworks, Inc., of Buffalo, New York, for example, has rolled out its celebration line of single-color gumballs, sixlets and foil-wrapped chocolate, and also launched a little sweet something for coffee lovers, the Cappuccino Ovation-chocolate covered cappuccino truffle sticks.
Seasonal products always have been a boon for the candy industry and the current market, private label or otherwise, is no exception. A 2010 Mintel Group Ltd. report on non-chocolate confectionery showed that seasonal candies experienced a fair amount of growth in the two years prior, nabbing more than 19 percent of the candy market. Tumbador’s Bonnet pointed to his company’s pumpkin caramel, spicy pumpkin and seed clusters that are seeing a return in popularity as autumn descends. Anything peanut, he adds, is particularly popular with customers these days. “Peanuts are still king, but almonds are on the rise for us,” he said.
Additionally, according to September 2011 Euromonitor International findings, peanuts grabbed 69 percent of total fresh nut volume sales in 2010.
Salem, New Hampshire-based Original Gourmet Food Company is pumping life into the sluggish lollipop category with its upscale offerings. Key flavors like cotton candy, strawberry shortcake-made with real cream-and apple pie a la mode, along with premium quality cookies and wafers, have helped propel Original Gourmet’s sales, which can be upwards of 200 to 300 units per week in supermarkets, said Richard Alimenti, company CEO. Alimenti is expecting 40 percent growth for his company next year.
“Yes, these products are more expensive,” Alimenti said, “but consumers love them. These lollipops last for about one hour. What do you sell today at two for $1 in your candy set that is fat free, only 110 calories and lasts for an hour? They really take it up a notch.”
Just because consumers tend to have less cash in their pockets these days doesn’t mean they’re willing to give up their chocolate.
The bad economy actually has increased sales, said Beth Podol, senior marketing manager for Mount Franklin Foods, El Paso, Texas. “People who are looking for les expensive but quality products are finding that private label is a great solution,” she notes.
For the 52 weeks ending August 7, 2011, for example, private label snack nuts, seeds and corn nuts gained 2.5 percent in dollar sales in a category that boasted more than $2 billion in sales for that time period, according to Chicago-based SymphonyIRI Group. Private label holds a third of the overall dollar share of the category.
“The amount of retailers [carrying private label nuts and candies] seem to be growing and they are expanding their selections,” said Mariah Kerwin, brand manager for Sweetworks.
Those expanded selections will hopefully translate into expanded sales, The private label chocolate candy subcategory showed only a 2.6 percent increase in sales, and captured only 1.4 percent of the total chocolate candy category-which topped off at more than $5 billion in sales for the 52 weeks ending August 7, 2011. Private label non-chocolate candies also have room to grow, gaining a mere 2.3 percent for the same time period, and owning only 8.6 percent of the total category.
Jefferson may have played it coy when talking about work and hard but there’s obviously some truth to it. Private label candies and nuts are seeing growth-even if it is minor-thanks to new products, new packaging and a new way of looking at their lines. All of that hard work? It’s starting to show off just how lucky they are to be in the prime of private label time.
Eye on the national brands
In candies, chewy candies prove to be an area of innovation, stated a 2010 Mintel report on the topic, with new chewy products making up 44 percent of the product launches since 2005.
Fairfield, Calif.-based Jelly Belly Candy, for example, has had the most product launches in that time frame, with 173 in its fruit-flavored hands by mid-2010. But hot on its heels, Target private label non-chocolate confectionery was tied for second in the number of product launches for the same period.
Now is not the time to rest on brand name laurels-noted the Mintel report, “Private label has inched up in its contribution to new product innovation. In 2005, only 3.3 percent of new products were private label. By mid-2010, that grew to 22.2 percent.”