A. Elizabeth Sloan

You know the feeling: you crave something sweet! According to USDA/Opinion Research, two out of five Americans admit to their sweet tooth, 96% have a regular urge for a sweet snack, and sugar intake is up 20% since 1986. No wonder candy consumption is at an all-time high, posting $23 billion in U.S. sales.

With 1,273 candy/confectionary products introduced in 1999—just behind beverages and condiments, according to New Product News/GNDP—the candy business is more competitive than ever. Whatever it is—candy or toy—interactive candies such as Wonka’s exploding Xploder Bar, FM music–playing Sound Bites™, Cap Candy’s spinning lollipops, Crazy Dips lick-off body paints, or Chupa Chups’ toy-containing suckers are the fastest-growing market segment, up 23% since last year, according to the National Confectioners Association. But the technical one-upmanship necessary to compete in the lucrative, fast-paced, novelty, interactive, and licensee market is costly, super trendy, and often fairly short lived. Nonetheless, toy companies are targeting the candy market.

Traditional candies are also confronted with a host of new players usurping flavors that were candy-only, like bubble gum, seasonal/snack occasions, and front-of-store positionings. Sara Lee’s Cake Bites™, Philadelphia’s Dessert Snack Bars, and Kraft’s Jell-ODelights are three such examples. Even savory treats like Frito-Lay’s Scoops™ line and Kraft’s Snack Pak Cubes in cheese and yogurt/pudding/fruit packs infringe on candy’s once-sacred territory. There are also energy bars, nutrition bars, and hybrids like the Balance Gold Bar—cross-dressed as both a candy and a health bar in one.

While the candy segment has historically focused on kids’ consumption, the 144 million adults projected to be age 45 and over by 2030 means that it’s time to offer some sweet treats for the rest of us. With Boomers dominating the population, nostalgic treats such as Russell Stover’s Peanut Butter and Jelly Cups, Pez’s candy dispensers, or Skippy Doubly Delicious! With Nestlé Toll House Morsels are sure to find a receptive audience. Strongly sophisticated contrasts similar to those in upscale-restaurant dessert trends such as chocolate with orange/strawberry, savory/sweet mixtures, hot spicy/cooling contrasts, and crispy/smooth should also attract attention. What about the romance of ethnic candies, upscale adult coffee, tea, and milk companions, or strong flavors like apricot or lime? Or consider sophisticated samplers or office samplers, just like Dunkin Donuts Dozen? Healthier versions of old favorites, smaller portions, and elegant lite treats will be a hit too.

Datamonitor reports U.S. functional candy sales at $1.4–1.8 billion by 2003, and a global market of $4 billion. According to the National Confectioners Association, 10.7% of all non-chocolate SKUs and 1.2% of all chocolate SKUs sold last year were functional candies.

Candy is an exceptionally fast and effective delivery system for nutrients and even medications. Not surprisingly, the current functional candy segment is dominated by fortified, energy-enhancing, immune-boosting, and cold/flu options (see June issue, p. 42). In the worldwide $4-billion functional food category, benefits range from Nestlé’s anti-halitosis hard candy (peppermint and parsley oil) in Australia to skin-care hard candy containing collagen in Japan, tomato candies with lycopene in Japan, and sugar-free digestive candy containing extracts of mint, rosemary, licorice, and Boldo, a herbal concoction in France.

Candy’s ability to move into the OTC world with throat-soothing lollipops for children, cough/cold candies, and even breath and dental products such as BreathAssure™ anti-plaque and breath-enhancing gums is particularly interesting. The dental-care segment is exploding in Europe with safe-for-teeth being among the top five most-desired health claims in the UK, Germany, and France, according to Leatherhead Research R.A. SmithKline Beecham has enjoyed great success in Germany with Odol™ and its toothpaste-branded candy and gum, Aquafresh, launched under the Binaca™ brand in Spain. 

Sugar-free candy is booming the world over and proving to be the driving force for growth of the total candy category in many European countries. With 143 million adults and one in every four children suffering from overweight, a resurgence in interest in dental cavity/plaque control, and diabetes reaching epidemic proportions with 800,000 new cases a year, it’s not surprising that it is also one of the fastest-growing U.S. candy segments. 

Leading manufacturers are finding that sugar-free versions of existing top brands worldwide may complement rather than detract from sales of traditional products. In Europe, Switzerland, followed by Germany and Italy, leads the sugar-free market. According to AC Neilsen–London, European chewing gum sales show a 6% increase in the sugar-free sector, compared to an 8% drop for sugar products. The effects are also being felt in Eastern Europe. 

It is one of the great ironies that candy is one of the few food categories that have legitimate opportunities in each of the sweet, indulgent, healthy food, and OTC markets. After all, how many products can be accused of accelerating unhealthy conditions such as overweight and dental cavities and also be a valuable aid in the battle against tooth decay, weight control, energy enhancement, and diabetic diet compliance?

by A. ELIZABETH SLOAN
Contributing Editor