A WHOLE NEW BALLGAME

SARAH MULHOLLAND

The American consumers' growing concern with health and fitness is fueling growth in unexpected places -- notably, the candy category. This new breed of customer expects more than something sweet from a quick treat, and with the advent of the sports bar and functional candy, retailers are in a position to oblige them in the Center Store.

According to Information Resources, Chicago, the snack-and-granola-bar category, which includes sports bars such as Cliff bars and Power Bars, is showing a 12.8% growth in unit sales for the 52-week period ending Aug. 13. On a similar note, the diet-candy category, meaning sugar-free, exhibited a 14% growth in unit sales for that same 52-week period. However, grocery retailers have to watch their backs as the mass and drug channels continue to enjoy growth in these categories with disproportionate speed. The food channel witnessed a 9.7% growth in unit sales in the snack-and-granola-bar category with drug accounting for 25.3% and mass accounting for 19.5% of the total growth.

The figures for diet candy show an even larger discrepancy with the food channel claiming a meager 1% of the total growth in unit sales in comparison to the drug and mass channels' respective 27% and 15.2%.

IRI does not distinguish nutritionally enhanced candy from the overall candy category, yet according to numbers from the National Confectioner's Association, McClean, Va., the functional-candy category accounted for $14 billion in sales in 1998, with estimated sales of $17 billion by 2001.

Susan Fussel, manager of communications at NCA, sees the aging baby-boom population as a boon to the entire health-and-wellness industry, and there is no reason for candy to be left behind.

"The functional-foods category as a whole is on the way up, and candy is becoming a bigger part of it," she said.

According to Fussel, the gum category appears to be particularly ripe at this point. There has been an explosion of new gums entering the market over the past year or so and a number of them promise additional health benefits, such as Arm and Hammer's gum for whiter teeth.

She also cited a fruit chew put out by Brachs, which provides 100% of the recommended vitamin C, and Get Better Bears lollipops, a therapeutic sucker for soar throats, as items to watch for.

Despite the growing demand for products that satisfy the sweet tooth with an additional nutritional punch, several retailers that SN spoke with remain leery of the functional-candy category. The primary obstacle appears to be the fact that consumers and retailers alike are just not familiar with these products.

Lynette McCoy, a snack-and-confections buyer for Minyard Foods of Coppell, Texas, does not currently supply any of her stores with nutritionally enhanced candy through the warehouse, although she noted that some stores, based on customer requests, may go through local distributors for such specialized items. McCoy finds herself personally hesitant because she does not see the consumer awareness.

"We were presented with some bagged items and we didn't pick them up due to conflicting views within the committee. We were just not sure if it was a viable product for our stores," she explained. "I would like to see more advertising first. Maybe some FSI couponing."

Stacy McWilliams, a buyer and merchandiser for Laurel Grocery Co., London, Ky., is similarly not necessarily averse to the idea of functional candy; she simply has not seen it.

"I am not saying that I wouldn't pick up these types of products -- I just haven't been presented with them," she said. "It's hard for me to talk about the overall demand, but I do know that none of my stores have called asking for anything along those lines."

However, McWilliams does see potential in the gum segment for the health-conscious consumer. She has had luck with the dental-care chewing gums and thinks the concept has real staying power.

"Chewing gum is chewing gum and it will stay around forever," she said. "As long as it freshens your breath, why not opt for the variety that strengthens or whitens your teeth as well?"

The key in McWilliams' mind is keeping the price point down. Some of the new gums are priced at 99 cents per pack and in her opinion, that's fairly steep for a few sticks of gum. According to Ken Bruce, director of nonfood programs at the South Bend, Ind.-based Martin's Supermarkets, the dental gums do OK at his stores, but he does not see that niche as having a big impact on the category as a whole.

"Most people realize that this is not a substitute for brushing their teeth," he said. "They recognize these products as glorified breath mints."

Paddy Spence, the CEO of Spins, San Francisco, a provider of marketing information for the natural-products industry, feels that the candy segment of the functional-food category in the United States is still immature at this point. He pointed to the booming market for such products in other countries, such as Japan, as a cause for optimism.

"The context for these products in Japan is similar to that of the United States," he claims. "The Japanese population is pressed for time and they want convenient foods that deliver nutritional benefits and do not take up a lot of storage space. We could be reading that about ourselves."

According to Spence, the demographic for health-and-wellness items is based on product availability and offerings, and as the larger national brands are beginning to play a more prominent role, the demographic is moving mainstream.

Sports bars are especially hot right now, and several of the big manufacturers are getting in on the game -- for example, Nestle's acquisition of Power Bar in March 2000. The essential advertising dollars and brand recognition are helping to fuel the category's rapid growth.

Michael Tardee, a grocery manager for an Alfalfa's Market in Boulder, Colo., stomping ground of the hikers and mountain-bikers for whom these products were originally intended, said that his store has been doing a lot of business in that section, particularly with Cliff's Luna bar, which is geared toward women. Yet he has some reservations about the category's recent success.

"Sports Bars in general are becoming a mass-marketed item," he said. "Traditional grocery stores carry most of them at this point and I think this is lowering the quality of the bars. They are becoming too sweet, too much like candy bars."

Tardee uses Power Bar's current promotional tie-in with the Olympics as an example of the mainstream appeal of today's energy bars, and laments the loss of some of the smaller, homegrown companies with a more environmental-political bent.

Laurel Grocery Co. has just recently begun to carry Cliff bars, and although McWilliams deems it too soon to make any concrete judgments regarding her stores, she feels confident in saying the category is definitely growing.

"People may be reluctant to try something like this at first, especially since these bars are not cheap. Getting the big guys behind it, getting that name out there really helps," she said. "Gatorade is supposedly coming out with a product like this and anything with that Gatorade name is bound to sell."

Martin's Bruce is also seeing a lot of movement in the sports-bar category. However, he said the product's success is largely contingent upon a store's demographic.

"We have 17 stores and some do very well with the energy bars and some are just so-so," Bruce said.

Bruce describes the target market as educated, middle-class consumers between the ages of 25 and 45. Martin's has recently introduced a health-and-wellness section to many of its stores, varying in size from 24 to 32 feet. The sports bars are being sold in this section alongside nutritional staples such as vitamins and supplements.

Bruce is hoping the section will draw in some customers who may have been previously unaware of the sports-bar offerings. For instance, when the older clientele comes in to buy vitamins, they will see these products that they didn't even know were available.

McWilliams suggests placing the bars in two spots. She leans heavily toward positioning them like candy bars at the registers, pushing for those impulse sales, as well as having them alongside vitamins and nutritional supplements.

"Not everybody buys vitamins. It's that front-end counter, that impulse counter, that's going to get people to try these things for the first time," she maintains.