Private-label confections may account for just 1% of the total candy category, but they're becoming more noticeable on store shelves.
said Doug Kling, chairman of Princeton, N.J.-based Resource Network, a firm that consults the candy industry. "It's the nonchocolate commodity items that have a chance," Kling said.
Robert Oglesby, category manager and buyer at Love's Country Stores, Oklahoma City, concurs.
He said bagged varieties of hard candies, gels and some chocolates are performing well.
"A lot of companies are going to a private-label bagged line," Oglesby said. One of the reasons for this is that companies are realizing they can bag their own, and put their label on it for less money than buying it from a national vendor.
The customer benefits from a better price and the retailer gets a better gross profit, he added.
But some retailers and industry observers polled by SN had mixed reviews about the private-label candy industry. Candy isn't one of private label's stronger categories, according to the Private Label Manufacturers Association, New York.
What limits its appeal is that profit margins often are low, said Kling of the Resource Network.
For example, he said, if a company were to produce a private-label chocolate bar, there probably wouldn't be many purchases because the pricing would be similar to a national brand. The private-label bar might cost 50 cents, and Hershey's might retail for 60 cents.
