UPSCALE CHOCOLATE SWEETENS BAKERY AT TWO HUGHES UNITS

ROSEANNE HARPER / ADDITIONAL REPORTING: Richard Turcsik

IRWINDALE, Calif. -- Hughes Family Markets here has added upscale bulk chocolates at the service counter in two of its in-store bakeries, most recently at a remodeled unit in Irvine, Calif.

The product carries the Powell & Hyde Sts. brand. The display in the service bakery case at the Irvine store is complemented by a self-service island display of Powell & Hyde Sts. boxed candies just across from the bakery counter.

"We're hitting two different customers with the two displays. The bulk chocolates are usually purchased for self-consumption and the boxes for gifts," explained Tod Knudsen, president of Knudsen's Candy, the Hayward, Calif.-based manufacturer of the chocolates.

The close tie-in to the boxed chocolates also promotes brand recognition, said Jeff Wilmoth, national sales and marketing manager for Knudsen's.

A Hughes store in Malibu, Calif., where similar chocolate displays went up two months ago, is having sales success with the product, Wilmoth said.

"Sales there are good. We're quite happy," he said. Officials at the 56-unit Hughes Family Markets could not be reached for comment.

Offering the chocolates at the bakery service counter provides a personal touch and the nostalgia of the old-fashioned corner candy store, Knudsen said.

The favorites at the candy counter tend to be the larger pieces, which are about the size of a graham cracker, he added. Among the best sellers are rocky roads, toffees and fudge. They range from $7.99 to $9.99 a pound.

At the Hughes unit in Irvine the bakery is up front, in a "high-service area" of the store. Six feet of the top shelf in a cookie service case are devoted to the bulk chocolates. Sixteen varieties are offered there and nearly one-quarter of the space is devoted to sugar-free fudge, which Wilmoth pointed out is a good seller.

"This is just the beginning, though. We'll add variety and we'll put signs with the brand name up over the bulk candies," Wilmoth continued.

"This particular store is the No. 1 store to fit our product. Its upscaleness, its selection of specialty items, and the demographics -- high to middle income -- are right for it."

The three-tiered self-service display across the aisle from the service counter is about 3 feet square. The white, gold and black boxes of Powell & Hyde St. candy come in various sizes from 2 ounces to 2 pounds.

Knudsen's Candy in bulk is in "about a dozen supermarket chains at this time," Wilmoth said. Among them are Albertson's Seattle-Portland division; Riser Foods, Bedford Heights, Ohio; Bashas' Markets, Chandler, Ariz.; and Nob Hill Foods, Gilroy, Calif.

Those operators, however, do not have the self-service display near the bakery service counter. Some stores, like Nob Hill's units, have the self-service display of the boxed chocolates in their floral department.

Prior to entering the supermarket arena with its chocolates, Knudsen's sold its candy primarily via specialty shops, but that channel has been drying up.

"In the past few years, more and more gourmet, specialty shops have faded away and that's left a gap. That's why we approached supermarkets. There's a lot of foot traffic and a wide cross section [of customers] in supermarkets," said Knudsen.

"After two years in Nob Hill stores, we're doing at least as well there [with bulk chocolates] as we are in some specialty stores," Knudsen added.

At the time Knudsen's linked up with Hughes Family Markets, plans called for rolling out the program -- bulk candy in the bakery complemented by a nearby self-service display -- to all the company's units, Knudsen said. The rollout, however, was put on hold when Ralphs Grocery Co., Compton, Calif., acquired Hughes Family Markets last month, he said.