Americans’ love affair with chocolate will never end. That said, sales of non-chocolate candy and gum are rising steadily, fueled by the economy and the search for innovative, flavorful new products.
“Yes, people are right in calling this a strong category,” said Bill Singer, a principal in Singer’s Chevron Inc. in Walla Walla, Wash. “When it comes to gum it just seems that everybody is chewing.”
Singer doesn’t believe Americans are venturing too far from chocolate. At the same time, he reported that non-chocolate sales are doing really well. He attributes some of the success of non-chocolate candies to the fact that it is so mobile, or as he calls it, “road food.”
“People come in here to Walla Walla traveling to Seattle and they stock up on road food—something to snack on—pretzels, sugar candies, stuff to keep them awake,” he said.
Tracking the Trends
Product expansion is proving to be a boost to the category.
“We are absolutely seeing growth,” said Susan Viamari, an analyst with Information Resources Inc. (IRI) in Chicago, Ill. “One of the things we’ve been seeing over the past year is an increased prevalence of in-home eating behavior. Also, we’re seeing more socializing at home, whether that be entertaining friends or just spending time with the family.”
Those trends, IRI’s brain trust believes, are playing a role in increased sales across non-chocolate confections. “That may take the form of putting a package of Skittles Crazy Cores into the lunch box to go off to school with Johnny, or putting a bowl of candy out when entertaining,” Viamari said. “Those kinds of things are helping to drive sales in that category.”
Viamari confirmed sales of chocolate candies dipped last year—down 6% in the food, drug and mass market channels, as well as at Wal-Mart, as it did in 2008. “That being said, the dollar sales for chocolate candy went up 4% for the year and, of course, that was driven by price increases,” she said.
Turbulence in the economy helped gum sales, IRI numbers indicate. “Gum is a little bit of a different animal,” Viamari noted, with number crunchers seeing a lot of growth in sugar-free and sugarless offerings. “It’s part of the wellness trend. Of course, sugarless gum is very heavily promoted for helping fight tooth decay,” she said.
“Our non-chocolate numbers are definitely up,” said Jenn Ellek, director of trade communications and marketing for the National Confectioners Association (NCA) in Washington. “For the holiday season, non-chocolate sales were way, way up. You could say it was driven by any number of things, and we’re not real sure. My speculation would be that people may be cutting back, and going for more non-chocolate versus chocolate based on price. It could be just an economic decision made within a family.”
For the 52-week period ended Dec. 27, 2009, Viamari said the total category of non-chocolate candy was up 5.4%. Gum was up 5.8% and the sugarless category surged 7.3%.
At the same time, non-chocolate chewy candies jumped 11.6% for the same 52-week period, to $868 million. Also hot are novelty non-chocolate candies, including those marketed to youngsters, Viamari said.
Refusing to Burst
Noting that although “the economy continues to negatively influence certain shopping behaviors, one category’s bubble refuses to pop,” Chicago-based research house Mintel International reported. In mid-March, Mintel noted that the gum, mints and breath fresheners market has seen sales growing through the recession, increasing over 10% since 2007, and it is expected to continue growing through 2014.
“Although this market is not entirely recession proof, gum, mints and breath fresheners are faring well due to their low price points and the feeling that consumers are getting a small treat,” said Bill Patterson, senior analyst at Mintel. “In addition, innovative packaging and unique flavors are aiding in the upward sales momentum.”
Consumer participants in Mintel’s confections survey suggested that functionality is key in the gum category. Nearly 50% of those surveyed cited packaging that reseals better or is easier to open as being most important. Similarly, 19% want gum and mints to have packaging that’s better for the environment.
Unique flavor combinations are the order of the day. Wrigley’s Orbit gum has launched flavors like Sangria Fresca, Maui Melon Mint and CitrusMint.
According to Mintel’s research, this is what consumers are looking for, with 43% saying they like to try new brands or flavors, and 13% want new brands or flavors “because they have yet to find one they love.”
“In recent years, gum and mint manufacturers have placed an emphasis on the health-delivering benefits of their products,” said Patterson. “Gum has long been associated with this approach but has become even more so by providing more functional benefits like whitening teeth, strengthening teeth and overall oral hygiene. Mints have followed suit by enhancing their products with antioxidants, green tea and other health-promoting ingredients.”
2010 and Beyond
Among Singer’s top-selling products of late has been Cadbury Adams’ Stride Gum, which is marketed as “the ridiculously long lasting gum.” Also big has been Trident’s Layers gum, which he said “has just come out, but is really taking off.” Flavors include Wild Strawberry + Tangy Citrus, and Green Apple + Golden Pineapple, with more reportedly on the way.
“People told me they like the way it’s made and the flavors. It’s just something they’ve never had before,” Singer said. A recent coupon promotion offered one free pack with the purchase of another.
Singer’s non-chocolate and gum SKUs number in the hundreds. The spate of new products to hit the market over the last two years has, indeed, helped fuel confection sales. He is sure to make use of every promotion that comes his way from a manufacturer. He also runs a strong program of product sampling whenever something new and noteworthy debuts.
“I even sample my gum because that’s what makes people buy,” Singer said. “It’s that simple: if they like it then they’ll buy it.”
Looking ahead, Viamari believes it’s going to be an ongoing challenge for manufacturers and retailers to drive volume and track pricing. “We were in a deflationary period at the end of 2009, and the expectation is that that deflationary period has come to an end,” she said. “We are going to see some level of deflation in 2010, but nowhere near what we’ve seen.”
Consumers are acting very recession-weary and conservative in their behaviors.
“So in 2010 we are not expecting to see a whole heck of a lot of jump in terms of volume,” Viamari added. “Retailers are doing a nice job trying to play to consumers’ perceptions of value. It’s about product positioning, effective pricing, and of course, assortment.”
What IRI sees as critical in the year ahead is following strategies that are in line with consumer trends, such as thinking about wellness, snacking from home, indulgence within the home for socialization purposes and just spending time with the family.
NCA remains convinced that at least part of the trend will continue to be influenced by the state of the economy.
“We think that sometimes the non-chocolates are price
d at a lower point than the chocolate candies, and it could be an economic decision based on their income and what’s going on within the family,” Ellek said. “The savvy move for retailers, then, would be to either highlight the less-expensive non-chocolate items with purse appeal or market their chocolates a little bit better.”
