NUTRACEUTICALS, PREMIUM PRODUCTS SEEN IN CANDY'S FUTURE

NANCY BRUMBACK

CHICAGO (FNS) -- The rise in "nutraceuticals," snacking as meal replacement, and consumers' cravings for status products, social products and entertainment may all impact the future role of candy, consultants told the fifth annual All Candy Expo here.

Also influencing the category's future will be the aging population with its health concerns and the growth of ethnic minorities, particularly Hispanics in the United States, noted Raymond Jones and Richard Carman, managing directors for Dechert-Hampe & Co., a marketing consulting firm based in Northbrook, Ill. The recent expo was sponsored by the National Confectioners Association, McLean, Va.

Jones noted an increasing emphasis on foods marketed as having therapeutic or medicinal qualities, the so-called "nutraceuticals."

Candy, he said, could provide a "satisfactory delivery system for dietary supplements," such as children's vitamins. Fortified confectionery products, such as cereal bars and power bars, are already proving popular with consumers. Adams USA, a candy company that's a division of drug manufacturer Pfizer, has jumped on this bandwagon with its new Body Smarts bar, a lower-fat candy bar fortified with vitamins and minerals.

Jones suggested candy manufacturers consider other ways to develop products that reduce stress, increase energy levels or provide other perceived health benefits.

Chocolate, particularly dark chocolate, he added, can also be promoted for its antioxidant qualities. "People want to eat chocolate and drink red wine, and now they have a reason."

Snacking is replacing meals, especially breakfast and lunch, for many people, Jones said. Candy remains the most popular snack item, and snack bars can be a "strong candidate for meal replacement. Consumers want grab-and-go convenience and, if it's nutritious, even better."

The "performance bar" category is very strong with teens, he noted, and he suggested bars targeted to women might also do well.

"This year, we expect the top brands [of performance bars] to sell more in the grocery, mass merchant and drug store channels than in the natural food stores for the first time," Jones said.

Other trends that can impact candy sales are a consumer desire for premium and status products, such as gourmet coffee, artisan breads and fine wines. Specialty chocolate sales are growing twice as fast as overall candy sales.

"It's only a matter of time before Tommy Hilfiger puts his name on a candy bar," he joked.

Candy, particularly the fast-growing mint category, can also be seen as a social product, a "sharable alternative to cigarettes," Jones noted. Passing around a tin of Altoids at a meeting provides a refreshment break and social contact.

Finally, candy provides entertainment for children, and sales of novelty candies are increasing. "Interactive" candy that includes a toy or colors the tongue is popular, as are candy products that include collectibles or feature licensed characters.

Jones also urged his audience to consider the demands of the aging baby boomer population. Low-sugar and sugar-free candies are likely to prove popular with this group. "And it's easier to make a sugar-free product that tastes good than a fat-free product."

Carman warned confectionery manufacturers that they need to address the tastes of the growing Hispanic population. In addition, they should be exploring a global market and tastes that would appeal to such markets as China. "Over 70% of worldwide confectionery spending is outside the U.S.," he pointed out.

Kids continue to gravitate toward the "extreme" tastes, both sour and hot, and are beginning to look for multiple tastes in the same candy, he said.

Carman predicted that the penchant for stronger tastes will continue as kids mature, evident by the popularity of strong mints and gums with teens. For older adults, that taste translates into a preference for dark chocolate and coffee flavors.

The number of confectionery stockkeeping units is likely to grow from the current 400 in an average supermarket to 600 SKUs by 2010 to take into account all of these changing tastes and roles, Jones said.

Supermarkets should begin to make candy more a destination for consumers, though not reducing the emphasis on displays for impulse sales, he added.

"It will be more important to look at the geo-demographic mix of each store's market [in the future]," he warned.