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Current Position:Home » News » Marketing & Retail » Retail » Topic

Candy Forecast 2012

Zoom in font  Zoom out font Published: 2012-04-01  Views: 321
Core Tip: To help you stock your shelves over the next 12 months, we’ve asked boutique retailers, artisan manufacturers, trendspotters, industry analysts and other experts in the know to share their thoughts on emerging flavors, manufacturing shifts and retailing s
Keeping up on new products, hot ingredients and customer tastes will help you make informed choices. Here are key areas to watch:
 
The new natural. “The biggest trend in candy is heading toward more natural, less manufactured confections,” says Kara Nielsen, a trendologist at the Center for Culinary Development in San Francisco. “It’s more artisan in look and feel.”
 
Emir Kiamilev of Amella Caramels, El Segundo, Calif., would certainly agree with Nielsen. He and his wife, Elena, started Amella in 2009, hand-crafting their caramels with pure cocoa butter, real fruit and nuts, all dipped in fine chocolate. “People are looking for an all-natural product and a unique experience,” he says, noting that Amella’s sales have doubled every year.
 
“Many of my customers are looking for locally made, artisan candy,” echoes Diane Campbell, co-owner of The Candy Store, a sweets boutique based in San Francisco. “Customers are moving away from mass-produced confections from factories far away, to hand-made candy made in their own communities. People want to feel connected to the foods they eat, and candy is no exception.”
 
Another case in point is Liddabit Sweets, a Brooklyn, N.Y., candy maker. Its small-batch caramels cooked with a reduction of Brooklyn-brewed beer and combined with locally made, crushed pretzel bits are best sellers. Partners Liz Gutman and Jen King started the company in 2009 as a side project, “but we struck a chord with people,” says Gutman. “From 2009 to 2010 our sales increased 400 to 500 percent and we’re on track this year to do two and a half times as much as last year.”
 
Retro candy reinterpreted. Another trend Nielsen cites as bigger than ever in 2012 is nostalgic candy. “Artisan candy producers are re-creating recipes for classic candies with great care and lovely packaging,” she says.
 
Liddabit Sweets smartly combines the organic, artisan trend with nostalgia, reinventing old-school candy bars. The Snacker, for instance, is reminiscent of a Snickers bar, with chewy golden caramel, roasted peanuts and creamy chocolate nougat enrobed in dark chocolate. “It’s something associated with nostalgia but made in a more grown-up way,” Gutman explains. “We’re also hand-making saltwater taffy but adding bergamot and coconut. We like to model things on memories from childhood and then use advanced techniques and the best ingredients we can find to make them the same but totally different.”
 
For Liddabit Sweets’ Honeycomb Candy, Gutman took inspiration from a recipe in an old cookbook, which reminded her of Violet Crumble, an airy, chocolate-coated Australian candy bar her father used to love. “Apparently, it’s also huge in Buffalo [N.Y.],” Gutman says. “Customers are so excited when they taste ours and tell me how they used to get it in Buffalo, but they call it sponge candy.”
 
Also noticing an uptick in nostalgia is Jenn Ellek, director of trade marketing and communications at the National Confectioners Association in Washington, D.C. “It has been a constant comfort tool since the economy became shaky several years ago,” she says. “People want to look back to their past—share a part of their childhood with their family. If life isn’t as pleasant as you think it should be, you want to turn back the clock to the olden days, to the things that have brought you joy.”
 
While sophisticated interpretations of the classics are gaining traction, original versions of retro candies are still selling well. At San Francisco’s The Candy Store, walls are lined with old-fashioned candy jars and treats, such as Mallo Cups, Clark bars and Bit-O-Honey. Campbell’s top-selling gift collection is called Blast from the Past, featuring old-time favorites, such as Pixy Stix, Wax Bottles, Necco Wafers and Candy Watches.
 
Emerging flavors and ingredients. “More savory ingredients, more chiles, more herbs and different nuts are coming on strong,” says Nielsen. For example, Los Angeles’s Morning Glory is a small confection company modernizing old-fashioned peanut brittle with flavors such as chai tea and cashew, Indian curry and pistachio or New Mexico chile and pumpkin seed.
 
“These herbs and flavors make the candy have a culinary feel,” says Nielsen, “so it’s not just for kids by any stretch.”
 
The trend is happening from coast to coast. Fig + Kindle, a young, small company in Boston, is creating its own new twists on brittle, studding it with pecans, canela and smoky chipotle peppers or walnuts, rosemary and sea salt.
 
Tropical fruits are getting more play as well. Amella Caramels makes a popular passion fruit caramel and has gingerbread-mango and strawberry-chile in the pipeline. Berkshire Bark, a tiny candy manufacturer in the Berkshire mountains of Massachusetts, has found success with a Tropical Heat chocolate bar laced with mango, papaya, pineapple, coconut, ancho chile powder and cayenne pepper.
 
All these flavor combinations are a sign that Americans continue to develop more adventurous palates, says Jenn Ellek. “We are especially welcoming flavors from the Far East, such as lemon grass and chai, as well as from Central and South America with the infusion of chiles and spices,” she adds.
 
Among other ingredient trends Ellek sees are healthful, all-natural sweeteners like honey and fair-trade products. Consumers are more socially conscious and willing to pay a little more, she points out. “That said,” she continues, “they still want value in these uncertain economic times, so retailers need to offer products that fit this criteria.”
 
CHALLENGES FACING THE CANDY INDUSTRY
 
Just as sweets are a go-to category for comfort and indulgence, they are also a magnet for controversy. Here are some of the key industry issues and ways manufacturers and retailers are dealing.
 
A national focus on health. “I think people are re-evaluating their relationship with sweets and sugar because of the obesity crisis,” Nielsen says. “They’re looking for an affordable indulgence in smaller quantities. The industry has to convince consumers they can indulge a little bit, make it worth the calories.”
 
Amella Caramels is one company addressing that issue, making cake-inspired confections like Carrot Cake and Black Forest Cake, but in caramel-size. “My wife and I are always dieting and you get the urge to eat cake sometimes,” Kiamilev says. “Three Amella Caramels have 160 calories altogether whereas a piece of cake can be 900 calories. The cocoa butter we use is a good fat and allows the flavor to spread to all your taste buds and leaves a long, lingering sensation that makes you feel satisfied.”
 
The National Confectioners Association also supports Michelle Obama’s Let’s Move! campaign. “They’re very conscientious,” Ellek says of the association’s members. “We police ourselves and are doing our own studies. We are at the forefront of saying candy is a snack or treat that fits into a healthy, active lifestyle. It is not a meal replacement.”
 
Legislative issues. “Like any industry, there are always hot spots,” Ellek notes. “Abiding by FDA regulations and running a safe ingredient-production line has always been important, but for candy manufacturers, one of the biggest hurdles is the 2012 farm bill that is coming down the pike.”
 
A grassroots organization called the Coalition for Sugar Reform is seeking to overturn the federal government’s decades-old sugar subsidy and import quotas. Ellek points out that the subsidies keep domestic sugar prices artificially higher than world prices. Candy manufacturers are lobbying on Capitol Hill, “but we don’t have deep pockets like sugar growers,” notes Ellek. The coalition has found a friend in Senator Dick Lugar (R-Indiana), who is proposing—as part of the Free Sugar Act of 2011—to eliminate the federally mandated program, claiming it would free small businesses and consumers from paying government- inflated prices.
 
Candy retailer and supplier concerns. Ingredient costs and shortages top the list of concerns in the supply chain. “Prices of ingredients are going up every five minutes,” says Liz Gutman of Liddabit Sweets. “The crazy weather we’ve been having has meant that every crop imaginable has been compromised, including peanuts, so the price of peanut butter is going up 20 to 40 percent.”
 
Gutman adds that climate change has become a problem in another way. Preservative-free, artisan candy doesn’t always travel well. “It’s more of a nightmare to ship in the summer with the extreme heat,” she explains. “Ice packs cost money. Even in October it was 97 degrees in Los Angeles, and you want your chocolate to arrive at the store looking the same way you made it.”
 
LOOKING AHEAD
 
Even in the face of these challenges, sweet treats have a strong future. “If there was a stock to invest in called confectionery, I’d sign up for it,” Ellek says. “Despite everything happening in the economy, we’ve seen an increase of two to five percent every year since the turn of the last century. It’s still an affordable luxury and I would call it a stable growth industry,” she continues. “I don’t think there’s ever going to be a time in the next decade that people will phase out treating themselves to a taste of happiness.”
 
Functional ingredients. Kara Nielsen of the Center for Culinary Development sees more candy companies focusing on nutraceuticals down the road, with ingredients making antioxidant, omega 3 and oral-care claims. She says it’s already happening in Japan, but she questions if it will be a long-lasting trend. “It’s the antithesis of what candy is,” she notes. “There’s diabetic-safe, sugar-free candy if that’s who you are, but I don’t think it’s going to overtake the candy industry. The entire industry is working to make their food seem healthier, but doctoring it too much can seem scarier and more processed to consumers.”
 
International shapes and flavors. Nielsen also sees flavors becoming more interesting, and candy coming in different shapes, sizes and types of containers from around the globe. “Japan has the most innovation when it comes to flavor,” she says. “South America and Mexico are experimenting with different shapes such as candies as tiny as Tic Tacs. In Europe they’re playing around more with texture, contrasting what’s happening on the outside versus the inside. As Generation Y gets older, they’re going to demand an upgraded flavor experience. Candy manufacturers should be paying attention.”
 
Retailing trends. “The best practices in retail suggest that a dedicated section for premium products makes it easier for the shopper to find,” says Ellek. “We also recommend more cross-product marketing—candy gift boxes near wine and card displays.”
 
“Cute candy stores are more of a trend,” says Nielsen. “They started coming back four or five years ago, featuring a mix of penny candy and fancy chocolates. We’re going to see more shops having a mix of something for everybody.”
 
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