Candy Industry – Innovation and Simplification

In response to low unit sales in the chocolate bar sectors, candy manufacturers are considering strategies on both ends of the marketing spectrum:  innovation or simplification of their product lines.  Paradoxically, as prices keep escalating; overall sales have climbed to $ 4.9 billion!  Larger numbers of sophisticated buyers are demanding increased flavor variation; more refined health benefits and improved packaging.  But the biggest sellers continue to be nostalgic perennials that the business has learned to bank on.

According to the latest industry figures the top 10 selling chocolate bars are the traditional mainstays and they’ve all been around for decades:  M&Ms, Hershey’s signature bar, Reese’s, Snickers, Kit Kat, Twix, 3 Musketeers, Butterfinger, Milky Way and York Peppermint Patty.  This is the kind of candy you might find in any typical wholesale candy store… of the 1940s.  In fact, the confection consumers spent over $ 95 million on these types of products.

A senior spokesperson for one of the major chocolate manufacturer’s feels that longevity is just one secret to success:  “…ensuring that our core products are in distribution at retail has helped grow our sales and share.”  The sheer simplicity of their best seller seems to be driving this “back to basics” campaign.  Candy connoisseurs know the flashiest thing about this uncomplicated milk chocolate bar is its silver wrapping, but over the years it’s become a staple for countless recipes and the iconic label is known world-wide.

Confectionary powerhouses like Mars, Nestle and Cadbury capitalize on the name-recognition of their classic brands with movie tie-ins or sports endorsements.  Product placement deals, internet contests, and fundraising promotions are other ways our favorites stay embedded in the culture of consumer lives.  Everyone knows Bart Simpson loves Butterfinger.  M&Ms now come in an unprecedented pink supporting Susan G. Komen’s breast cancer research.  And during basketball season, Hershey asked fans to “unwrap March Madness.”

But everyone can’t be an icon, so others are breaking the mold.  The white hot premium trend is arguably the fastest growing niche.  Within these gourmet-type lines, high-grade chocolate is married with intense flavors, exotic inclusions and fancy marketing design.  High-end confectioners like Lindt and Ghirardelli are making millions with brands like “Luxe”, “Excellence” and “Petits Desserts.”

No matter the category, industry-wide, chocolate producers are changing packaging designs to address changing customer needs.  Stand up bags with re-sealable closures and tablets individually wrapped sections offer snack and store capability.  Better portion-control make these innovations appeal to buyers looking for fresher and healthier options. Note the heightened focus on nutritional value and providing serving size information on product labels.  No wonder Snickers is sold in king, original, snack, bite and bit sizes! 

Disappointing unit sales have spurred innovation and simplification in the market.  While we can expect giants like Mars and Nestle to exploit the nostalgic value of bars consumers know and love.  But by nimbly responding to consumer demands, smaller chocolate makers can make a name for themselves too.