As another Sweets &Snacks Expo approaches, a few larger trends are shaping the chocolate, nonchocolate, gum and mints categories in the coming year.
From a macro level, the quest for more natural formulations—which is already transforming the snacks and beverage categories—will begin to filter down into candy, according to Marcia Mogelonsky, global market analyst for Mintel International, Chicago.
“Everyone is so worried about food ingredients and food supply now; there’s a move to make sure these products are as naturally flavored, colored and presented as possible,” says Mogelonsky. “That’s a really great thing for the industry, a really sad thing for kids: Your mouth won’t turn blue anymore.”
This turn, analysts suggest, presents a conundrum for candy manufacturers.“There is a real problem of how to develop products for kids,” she says. “Do you shy away from it and only develop natural products that don’t have any ‘wow’ factor for kids?”
In addition, making the products healthier can bring them in closer competition with snacks, such as the fuzzy area between fruit snacks and some gummicandies. Indeed, according to Mintel research, candy consumption, while up among adults and teens, is down among children ages 6 to 11.
For adults, the natural, low-calorie sweetener stevia is working its way into more candy, starting with dark chocolate, which has enough heft that it can mask any aftertaste, Mogelonsky says. It is just one way manufacturers are making candy a more acceptable treat.
“Health-conscious shoppers avoid certain aisles in store: baked goods, snacks, candy, soda and ice cream,” says Tricia Bowles, manager of division &brand affairs for Nestlé USA’s Confections& Snacks Division. “However, all players in the category work hard to make it permissible.” Nestlé has introduced its Skinny Cow Divine filled chocolates, which have 130 calories per serving. And The Hershey Co.’s Simple Pleasures line contains 30% less fat than the average leading milk chocolates.
On a micro level, expect to see manufacturers tailor products to consumer preferences for value, form and flavor in 2013. Following is a roundup of how this dynamic is already playing out among the category’s largest players.
What’s SUP?
As consumers remain conscious of their budgets and waistlines, candy manufacturers are tweaking packaging and form to meet both of these trends.
Value-seeking shoppers are grabbing larger, resealable bags of candy, both in chocolate and no chocolate items, says Cassandra Matos, confections and snacks category manager for McLane Co. Inc., Temple, Texas.
“It’s important to look at bagged candy and at the potential (for retailers) to add some of those stand-up, larger-sized resealable candy bagged items—like a larger M&M’s or Hershey’s Drops, Starbursts, Skittles or SweeTarts—to gain those consumers,” she says.
“There is an increased emphasis on ‘share ability,’ especially in packs like king or peg,” and more emphasis on portion control, says Bowles. Nestlé’s SweeTarts Gummies are now available in king and stand-up bag packs, Butterfinger Bites are now offered in a king pack, and SweetartJelly beans in peg and stand-up bags.
Translating a consumer trend into a sustainable product is a process, however.“It’s important to develop new products that are based on meaningful consumer insights and then effectively activated in-market in ways that get new products quickly into consumers’ hands,” says Jeff Beckman, spokesperson for The Hershey Co., Hershey, Pa.
For example, consider Reese’s Minis King Size. “This product fi t the emerging consumer trend of convenient, on-the-go, hand-to-mouth consumption of confectionery, “says Beckman, pointing out that it provided incremental growth for the overall Reese’s brand king-size business in the c-store channel.
On the execution side, c-store retailers who had the new Hershey’s RoloMinis set in their stores and on display with merchandising at the point of purchase on day one of the product launch achieved a much higher share of sales, as much as a 45% increase over the average, says Beckman. Another key was properly forecasting demand and ensuring product was not out of stock in the first 12 weeks of the launch.
In 2013, Mars is addressing the appeal of unwrapped, bite-sized chocolate with resealable bags of Snickers Bites, Milky Way Bites, M&M’s Snack Mix, M&M’s and Dove Milk Chocolate-Covered Raisins and Peanuts.“These bags offer convenience and portability, and they are easier to share,” says Larry Lupo, vice president of sales, convenience & drug channels, for Mars Chocolate North America, Hackettstown, N.J., via email.
Seasonal Swings
Another expanding trend is the revival of seasonal candy. This expansion is mainly due to the blurring of seasonal borders, says Mogelonsky. “In the old days, seasonal was four big holidays: Easter, Christmas, Valentine’s Day and Halloween,” she says.“Now we’ve changed it to spring, fall and winter. It’s grown the concept away from a day to an event or time.”
Thus Hershey’s fall-color Kisses are suitable through Thanksgiving, and the pastel-color variety make sense all offspring.
In the convenience channel, the great opportunity is for snack-size versions of seasonal candy, designed for immediate consumption. “Once almost nonexistent in c-stores, seasonal candy is showing impressive sales gains due to manufacturers creating the right products in the right sizes for the c-store consumer,” says Lupo. He cites Mars Chocolate’s singles shapes, including Snickers Pumpkins, Milky Way Simply Caramel Snowmen and Snickers Peanut Butter Eggs.
Traditional flavors that fit the season are the ones that sell best, says Matos of McLane. “If you look at chocolate items like Reese’s Pumpkins or Snickers Pumpkins, across the board, they do well,” she says. “It’s a new area for convenience stores, and I think there’s just tremendous opportunity for incremental sales there.” as part of its M&M’s “Better with ‘M’ ”campaign, which highlights the M&M’s brand through commercials, NASCAR events, and seasonal and special promotions. Coinciding with the Fourth of July holiday, the M&M’s brand is partnering with Habitat for Humanity in the Make America Better With M campaign, and will offer M&M’s chocolate candies in limited-edition, American colors—a red, white and blue color blend—from May through August.
C-stores have to plan for seasonal opportunities, says Matos of McLane: Retailers should place Halloween orders, for example, by March or April. “It’s a challenge,” she acknowledges, “because the ordering dates are so much farther in advance than most convenience store retailers are used to working with. But there’s definitely an opportunity to gain some sales for those truly seasonal items.”
Gum Doldrums
The gum category has suffered from a glut of new products, which is part of the reason that sales have suffered. According to SymphonyIRI, c-store sales of gum dropped 5.4% in the 52 weeks ending Dec. 30, 2012. According to Caroline Sherman, U.S. manager of marketing communications for Wm. Wrigley Jr. Co., Chicago, for which Orbit, Wrigley’s 5, Extra and Eclipse are top gum brands, manufacturers are trying to tap back into trends tested in the food and beverage categories, as well as innovation in technology and consumer behavior shifts.
“With gum, we continue to focus on turning around the category and believe that is possible by emphasizing functional benefits and packaging innovation trending in this category,” says Sherman via email. “For example, by highlighting how chewing sugar-free gum … can help protect teeth, we give consumers new reasons to buy gum.”According to Carol Gunio, sales analyst for the Southeast c-store team at Kraft Foods Global, Northfield, Ill., whose brands include Trident, Stride, Dentyne and Bubblicious, the top three trends shaping the category in 2013 are:
- Importance of value, as realized through micro packs and pouches.
- Personalization aspect in innovation, as seen in its Stride iD gum, launched in September 2012 .
- Focus/increased attention on teens, who are the heaviest gum users, again directly addressed through the iD gum brand, the flavors, packaging and even promotions of which have been shaped by feedback from teen consumers.
On the packaging side, more competition on the front end is driving a need to declutter the gum space by offering the right flavors in the right sizes and price points that best suit the c-store shopper.
This means targeting the low-price tier. For example, after Wrigley’s 5-stick packs phased off shelves, the company saw room for packs priced under $1, and it introduced the Orbit and 5 gum Micro Pack, a six-piece pack with an MSRP of 69 cents.
To tap into the increasingly mobile, away-from-home trend, Wrigley launched Orbit and 5 gum On-the-Go and Car Cup bottles.
In considering gum’s struggle, Matos suspects some consumers have been lost to the stronger mints segment and others lost in the confusion of emerging products.
However, according to Mantel’s GNPDnew product database, the overall number of launches declined by 38% from 2008 to 2012. “While more gum products were introduced in 2011 and 2012, the number of new product introductions for gum is still far behind from what it was in 2008,” the firm says.
That said, Prepriced and mini bottles present an opportunity to gain a consumer for a time. “If that consumer still perceives the price of a pack of gum is too high and not a value, they will not trade up and become a loyal long-term user, “Matos says. “The most important thing is making sure the retail price is a perceived affordability or a perceived value.”
Fresh on Flavor
The value trend extends into mints and breath fresheners. Ferrero USA Inc., Somerset,N.J., launched jumbo packs of its Tic Tac brand in 2012, offering 200 pieces per box vs. the standard 60. “It comes from trends in the market—especially in gum—for larger sizes that meet different need states for on the go, the office, for sharing with friends and family,” says Todd Midura, Tic Tac brand manager. The company has seen strong sales of jumbo packs of Fresh mint and Orange flavors and is now extending it to the new Fruit Adventure flavor.
The larger packs, best merchandised in the aisle or on the counter, are sold in four-count trays with a suggested retail price of $3.49. According to Symphony-IRI, c-store unit sales of Tic Tac rose nearly 9% in the 52 weeks ending Dec.30, 2012.
Another growth track for Tic Tac are flavors, including a fresh take on an old favorite: cinnamon.
“We used to have a cinnamon flavor going back several years and for a lot of reasons delisted it,” Midura says. “In the years in between, we heard from consumers that they wanted it back, so we brought back a version with new flavor elements we’re calling Cinnamon Spice.”
The reintroduction was driven by feedback from many of Tic Tac’s 1.5 million Facebook fans, who would post messages asking for a return of cinnamon on an almost daily basis.
“Sometimes consumers are your best source of flavor ideas and product development, and so we’re going directly to them,” says Midura, who describes Cinnamon Spice as slightly bolder, with more distinct and discernable flavor notes.
The trend toward multidimensional flavors is also at play in Tic Tac’s newer Fruit Adventure variety, which features assorted exotic, tropical fruits; and Strawberry Fields, which offers a sweet strawberry and smooth, creamy strawberry flavor mix.
“It’s really for variety-seeking consumers who want all the flavors in one, “says Midura, contrasting these varieties with traditional orange and cherry.
“For no chocolate confections, popular food and beverage trends are driving flavor innovation,” says Sherman of Wrigley. For example, unique fruit flavors such as pomegranate are making their way into candy. In December 2012, Wrigley launched Skittles Darkside, which features deep fruit flavors including Dark Berry, Pomegranate, Forbidden Fruit, Blood Orange and Midnight Lime.
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