Sweets Smell of Success

This year, for the first time in its 108-year history, chocolate kingpin Hershey Foods brought sugar-free products into its mix. While the legendary candy company blames its long delay on finally finding a sugar-free product it could get behind, Hershey's remains one of many to follow what is certainly the biggest trend currently facing candy marketers.Diet and sugar-free candies are up 39.2% over the last 52 weeks, according to reports from Information Resources Inc. "In the food, mass and drug outlets, we're seeing new packaging arriving almost daily in that category," says Jim Corcoran, vice president of trade relations for the National Confectioners Association, Vienna, Va."Sugar is definitely in the spotlight now," says Mary Ellen Kuhn, editor of Confectioner magazine. "A few years ago everyone was concerned about fat, then it was salt and now it's sugar's turn." There are legitimate reasons, she says. Experts are telling Americans to consume fewer carbohydrates on a daily basis, and the upswing in diabetes is also often cited. "Consumers are becoming more aware of [diabetes] and are probably concerned about its potential to affect them at some point in their lives," she says.In addition to "healthy" candies, other trends -- such as extreme flavors, novelty candies and licensing tie-ins -- are fueling the strong growth of the $24 billion candy industry, causing marketers to ante up in the aisles.According to Packaged Facts, a division of Market-Research.com, overall retail sales of chocolate candy came in at $13.5 billion in 2002, up 4.2% from 2001. The New York-based company estimates that 50% of those sales were in supermarkets, mass merchants, convenience stores and drugstores, a figure that was 6% higher five years ago. Healthy sales of gourmet and specialty chocolates, as well as the increase in outlets now selling chocolate candy -- from bookstores to home improvement stores -- have affected that change.In the non-chocolate segment, sales reached $6.2 billion, according to Packaged Facts, and that number is growing by 2.2% per year. The category of gum, mints and breath fresheners posted $3.7 billion in sales, with an annual growth rate of 1.9%.No doubt a strong part of the growth comes in the thousands of new products launched every year. Most candy manufacturers agree that product innovation is key, and often it's the new products that are catching consumers' attention. Even the companies that command the lion's share of the market are realizing that they need to put new products on the shelves -- and oftentimes it's in the form of line extensions."Marketers are twisting and churning their product lines to maintain or gain visibility and to work more angles of the market," according to the Packaged Facts report. "Mass-market players are investing heavily in nurturing and leveraging their power brands, often turning to brand extensions as a conservative growth strategy in an increasingly competitive market." Jeff Lenard, director of communications for the National Association of Convenience Stores in Alexandria, Va., agrees. "Some brand names have been recognized for decades but have evolved just over the last few years, such as Snickers," he says. "Now there's Snickers ice cream, Snickers Cruncher and Snickers Popables. Customers wanting something new and different are impacting these brands. These companies almost can't stay still when everyone else around them is trying to excite consumers."Most marketers agree that with the literally thousands of new product introductions each year, the main challenge is finding space in retail stores to get them in front of consumers. Some are relying on a stronger emphasis of in-store merchandising to make the difference. "One out of three people who walk in and buy candy do it on impulse," says Lenard. "There's enormous potential to grow sales through P-O-P, but marketers have to figure out how to do that in a limited space."A Sugar-Free TreatConsumers have been asking for a sugar-free version of Hershey's products for years, says company spokesperson Judy Hogarth."Until this time," Hogarth says, "we never felt that we could put a product on the market that had the same taste as our regular line of confectionery products." She adds that the Hershey's Sugar Free Chocolate candy, Chocolate candy with Almonds, Dark Chocolate candy and Reese's Sugar Free Peanut Butter Cup Miniatures are good enough to carry the Hershey's and Reese's names.Packaged in 3.3-ounce bags, the products are in stores on floorstands, power wings and merchandising strips. Attracting the target audience was a major goal of the merchandising pieces, Hogarth says. For the launch, the company did a tie-in with the American Diabetes Association. "Their statistics tell us there are approximately 17 million people in the U.S. who have diabetes," she notes. "Our product is made for these people as well as consumers who are into the lower-carb diets."Russell Stover has been producing sugar-free chocolates since 2000, so this year's introduction of low-carb chocolates was a natural progression for the Kansas City, Mo.-based company. "Our Low Carb candy is another opportunity for us to meet the requests of our consumers, especially those who are now embracing low-carbohydrate lifestyles," says Todd Buss, marketing coordinator.Also sugar-free, the line was designed as a snacking/dessert opportunity, says Tom Ward, president and chief operating officer. There are nine different SKUs in the line, which was introduced in April in pegged bags, individual display boxes and a "one-shot" display that holds one of every flavor. Retailer reactions have been very positive, Ward says. "Walgreens was the largest account to take it first, and in looking at their sales, I think it exceeded their expectations by quite a bit."The company also produced a series of floorstands, sidekicks and power wings that began rolling out in August. The yellow units carry the familiar Russell Stover logo and tout "Zero Sugar Carbs." For the introduction of its Sinfully Delicious guilt-free candy bites, Innovative Candy Concepts, Atlanta, created a trial-size sidekick/floorstand, combination shipper/floorstand, individual step displays and in-line/shelf displays. "Knowing this product could fit into many retail outlets, we came up with several different display options," says Lisa Westerfield, national director of communications. "Since we don't have a huge advertising campaign, we have to tell our story with packaging and displays," she says. "We spend more money to make sure that they're first-class and are able to convey what the product is for consumers. It's a sugar-free, fat-free, two-calories-per-candy-bite candy, which is a lot of information to get across." The bright, holographic foil packaging is showcased in chocolate-brown displays.Dubble Bubble, the first-ever bubble gum in this country, was introduced 75 years ago. Recently, though, Concord, Ontario-based parent company Concord Confections has been urging consumers to try Sugar Free Dubble Bubble, one of its newer inventions. "It's definitely a trend that we're trying to be in line with," says Vijay Krishnan, group product manager. "A lot of parents are trying to reduce the amount of sugar in their kids' diets. This has all the bubble-blowing power and flavor of the original."Regular and sugar-free Dubble Bubble, Krishnan says, are merchandised together. "There's a pretty developed sugar-free segment already, so we just launched an offering that is clearly Dubble Bubble but also clearly discernable by packaging as sugar-free."The company used its in-store counter displays, endcaps and PDQs to promote the company's Dubble Bubble National Bubble Blowing Contest. Preliminary contests were held in 3,000 Wal-Mart stores across the country. On August 8, six finalists competed in New York on the Today Show. The winner, Chicago's 9-year-old Aina-Soe Cambridge, blew a 14-inch bubble. She received a $10,000 U.S. Savings Bond and the company will make a $5,000 donation in her name to a Children's Miracle Network hospital.For other mass outlets, Krishnan says the type of display varies. In c-stores, for example, the company offers countertop displays with pop-up backer cards. "We can't assume that we're always going to get that prime real estate, though, so if we're on the bottom shelf of the candy aisle, we want consumers to be able to see what they're buying." Trays with a front flap that lifts up on a 45 degree angle were created for this situation. "When consumers are looking down at it, they can see our logo popping out from the racks. It helps us in these places where otherwise we would be hard-pressed to get noticed."Also joining in the sugar-free craze is LifeMax LLC of Twinsburg, Ohio. It makes new Slim Mints weight-loss mints, a new, all-natural product that is said to reduce appetite and increase metabolism. The product comes in a variety of packages and is showcased in-store on corrugated displays. The tagline, "Lose Weight and Freshen Your Breath ... With One Mint!" appears on most of the pieces, including a metal tin display tray, a blister pack tray, a merchandising strip, a floorstand, a power wing with detachable base and a counter or junior power wing. All of the pieces have a pop-up flap that draws attention to the product and features an enticing visual and customer-benefit wording. The graphics carry messages about health and romance. Mike Pavlish, chief executive officer, says P-O-P was crucial to the product's launch in various retail outlets.The Intense WarCadbury Adams USA recently introduced its Dentyne Fire, the first intense cinnamon, sugar-free gum in the Dentyne family. Paired with the company's Dentyne Ice line, it launched as part of a "Fire and Ice" promotion. "We feel it's a good addition to our portfolio of flavors," says Jim Krebs, team leader in-store marketing. "We're capitalizing on consumers' demand for intense gum and mints."The Parsippany, N.J.-based company has historically used a lot of corrugated, Krebs says. "But lately we've been creating injection-molded counter units because we're finding that smaller chains and independent stores are more apt to refill them and have the impulse item in for a longer period of time if it's a nice-looking unit without a large footprint."Since the company says cinnamon flavors are popular with the Hispanic population, it has targeted some of its recent efforts toward this ethnic group. Last month, it ran a campaign around Hispanic singer Chayanne. Displays were created and placed in stores with a high concentration of Hispanic customers.Mentos NEWCharge gum, from Perfetti Van Melle USA, is a new microgum that was introduced in May by the Erlanger, Ky.-based company. The intense gum provides a customized experience based on individual preferences, the company says.The product, offered in Fresh Charge and Cool Charge flavors, went into stores on displays touting a "buy-one, get-one-free" offer. They were designed to entice consumers to try the innovative microgum, says Katherine Dintenfass, associate brand manager. "By offering a strong visual presence and great value, consumers were compelled to try NEWCharge gum."Approximately 10,000 twinpack counter units and power wing/floorstands were created for all classes of trade nationwide. Dintenfass says the unique product benefit of an intense breath-freshening microgum in a small box is the key attribute highlighted in the displays.Also coming onto the scene this year were Blitz Power Gum and Blitz Stoked Power Mints, joining the sugar-free Blitz line of products. Steve Schuster, president of Schuster Marketing Corp., the Milwaukee-based company that markets these products, says the goal was to create a semipermanent unit to hold the entire line. The Blitz Power Center is made of acrylic and chipboard on casters and features nearly $1,000 worth of retail sales in a little more than 1 square foot of space. Novelty Sells"The ante is always being upped in this market," says Concord Confections' Krishnan. "There are tons of options for kids. Whatever screams the most at the shelf and looks the most novel and fun is what's going to get picked up."The Foreign Candy Co., Hull, Iowa, is hoping that its Rips Straw, Mega Warheads Spray, Paint Brush Spray and Paint Brush Strip candy will grab kids' attention this year. "Children are especially visually oriented, seeking color, excitement and fun," says Devin Duncan, senior marketing manager. "At the store is where our products need to connect with kids the most."The company uses kid-oriented colors and graphics on its displays that offer a visual sense of what the products are about, Duncan says. He adds that the company has been using less generic in-and-out display pieces and more that specifically contribute to a brand presence.For its first foray into the candy business, Malibu Toys capitalized on the success of its Cosmic Giggles (a line of light-up fashion accessories for girls) and brought that technology to jelly pops. Batteries in the base enable the pops to flash on and off when a replaceable tab on the stick is removed.Flashin' Lix light-up jelly pops are available in a variety of flavors and generic icons. They are shipped into stores nationwide on an interactive 18-count display. Steven Style, a spokesperson for the Malibu, Calif.-based company, says having an interactive product and display is very important. "Candy buyers were very excited about this unit and felt it would help them sell the product through. The pops are flying out of the displays at Toys "R" Us stores, toy stores, mass merchants and candy stores."Amurol Confections' Sweet Roll is a log of bubble gum with a candy fondant (a sweet, creamy sugar paste) inside that may catch kids' eyes. Available in strawberry and watermelon, it was shipped to stores on a wingable counter display and floorstand. "Kids like fruit and bright colors, so we're maximizing both on our displays to communicate that this is a revolutionary new gum," says Laura Hess, marketing assistant for the Yorkville, Ill.-based company. "It's sweet, it's juicy and it's the fruit flavors they love." The graphics help explain the product to kids, Hess notes. "Kids are always looking for something new -- not just a new flavor but a new experience -- and innovation is really the key to that." Concord Confections' Krishnan agrees. "As soon as you sit back and think you have the next-best thing since sliced bread, you're about to be out-innovated. In all kids' categories -- toys, clothing, cereal -- it's all about new products, innovation and the crossover between licensed properties. If we launch something that is truly unique and that kids love, we can drive loyalty to our brand, and that's a coveted thing in a market where there are so many SKUs and competitors."Line ExtensionsAfter succeeding with Warp Energy Mints, Toronto-based Big Sky Brands hoped loyal buyers would purchase its new Green-T Energy Mints, said to be the first brand to bring the invigorating boost of green tea to the confectionery category. The mints feature a lemon-lime base flavor, along with a formulation of green tea extract, ginseng and guarana, for a natural, high-octane energy rush."The Warp line was directly inspired by the energy drink category," says Steve Yacht, director of sales and marketing. "With that category exploding, we saw an opportunity to bring the concept across to the confectionery market, and specifically mints." The Green-T mints follow the tidal wave of green tea-based products that have been recently introduced in the beverage category. "Green tea has certain inherent healthful benefits, which are a nice complement to the energy-enhancing components that we have in our product," Yacht says. Six- and 12-count displays and a 96-count floor display have been placed in stores nationwide. Similarly, the Jelly Belly Candy Co., Fairfield, Calif., says its JBz chocolate candies are the biggest new product launch since its Jelly Belly flavors hit the scene. They feature a milk chocolate center and crunchy candy shell in 20 Jelly Belly flavors. The company rolled into stores with danglers, static clings for windows, banners, counter cards, and a metal and acrylic unit for specialty accounts.

Sweets Smell of Success

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