SWEET AND SCARY 2004-09-13 (1)

KELLY GATES

Even in this era of health and wellness, no one wants to be dubbed "the house that hands out apples or pennies on Halloween night," said Eric Anderson, vice president of marketing for Fresh Encounter, the Findlay, Ohio-based supermarket chain with 30 stores.

Retailers are convinced that even the healthiest consumers will set aside their disciplined diets and allow themselves and their children one night of treats.

"There are many low- and no-sugar alternatives to the traditional Halloween treats, and we will carry those. But this is Halloween, the one time of year for kids to be kids and enjoy goodies," stated Anderson.

The National Confectioner's Association, Vienna, Va., predicted that sales of Halloween candy will increase overall this year by up to 3%, for a total of $2 billion in sales compared to a little more than $1.9 billion in 2003 and around $1.8 billion in 1995, said Susan Fussell, spokeswoman for the trade organization.

Candymakers are still planning on the health-conscious to participate in the festivities, and have packaged low-calorie or reduced-carb candies for the occasion.

"We have products in both categories," said Dick Masinton, chief administrative officer for Russell Stover Candies, Kansas City. Mo. "They're Halloween-friendly with little packages depicting ghosts and goblins and that sort of thing."

Dallas-based Brach's Confection is also planning to launch a new line of Splenda-based and low-calorie candies later this fall. However, Terry O'Brien, chief executive officer, believes that most Halloweeners intend on enjoying a regular candy treat.

"There is a niche of consumers who want to eat healthier, even during the holidays. But this niche will be small," said O'Brien. "During the different holidays and events, people want to go back to the comfort foods that they grew up with."

One such comfort food is Halloween's signature treat: candy corn. Brach's currently owns around 80% of the market share of candy corn and anticipates selling 2 billion kernels of the orange, yellow and white, honey-infused morsels this year -- a 22% increase from 2003.

Russell Stover offerings include a sugar-free Peanut Butter Ghost, as well as crispy milk chocolate Looney Tune Treats in individual packages. Many products are duplicated in full-sugar, low-calorie and reduced carb versions, according to Masinton.

"We offer essentially the same product of solid chocolates and chocolates with inclusions in small hand-out packaging," he told SN.

Other favorites are getting a new twist. Masterfoods USA, a division of Mars, has adorned its signature miniature Snickers, 3 Musketeers, M&M's, Twix, Skittles, Starburst and Starburst Lollipops with glow-in-the-dark wrappers that "put the fun back into Halloween," said Jeffrey Moran, company spokesman.

"All of the words on each miniature package, including the brand name, will glow in the dark. Because we expect Shrek to be a pretty popular costume this year, we have pictures of Shrek and the donkey on the back of each piece with a listing of fun facts about Halloween," he said.

Fresh Encounter plans to stock most of the usual items, but for the more sophisticated sweet tooth, the chain will carry a new line of Ohio State University-licensed chocolate candies.

Developed by a Columbus, Ohio, chocolate manufacturer, the scarlet and gray packaging and savory goodies will likely be a big hit among OSU fans in search of a tasty treat to serve guests at adult costume parties, commented Anderson.

Dierbergs, the 21-store supermarket chain based in St. Louis, will include candy items to immerse consumers in the Halloween spirit in the weeks leading up to the spooky event, noted Rich Wallace, director of grocery, frozen and dairy.

"Our stores gather together everything from coolers of slice-and-bake Halloween cookies and boxes of candy miniatures to paper plates, napkins and decorations, arranging them in the lobbies of each store to surround them in Halloween products," he said.

Other retailers told SN they don't have to do much to spur pre-holiday sales. Dahl's Food Markets, the 12-store chain based in Des Moines, Iowa, typically sees activity pick up as early as September, stated Ross Nixon, vice president of merchandising for the chain.

"Halloween is a funny event because we have some people who are really into it and want to buy the freshest, newest candy to hit the market up to six weeks ahead of time. So we'll have a big rush as soon as the candy hits our stores, then sales will wane for a while," noted Nixon. "Sales will pick up again at the last minute when other people are either making an impulse purchase or grabbing candy for trick-or-treaters a day or two before Halloween."

Kenny Kane, a Dahl's store manager, agreed it doesn't take much to entice most consumers to buy Halloween candy.

"We always try to put our hottest feature items out front by our cash registers where people can see them as they come into the store," said Kane.

While Dahl's gets most of the candy for its stores through wholesaler Supervalu, some individual store managers bypass bulk-buying in lieu of better pricing that comes directly from the candy manufacturers, observed Kane.

"In order to compete with some of the bigger retailers like Wal-Mart [Stores], we'll order direct," he said. "A lot of times, we'll get large shipments into our store, then turn around and deliver the candy to other stores from here."

Kane determines which candy he should order direct by considering upcoming advertisements for Dahl's and annual sales by competitors. If a competitor is likely to have a big sale on one brand of candy, then "we don't want to be stuck selling the same thing at a higher price at the same time," he said.

The NCA has been following a few trends in the candy category, including a general, year-round movement toward bite-sized morsels in resealable packages. Fussell expects this trend to grow after the Halloween season, which is already reliant on small versions of major candy lines.

"There are more products like Hershey Bites and Snicker's Popables, which have been introduced in the past few years, but also snack-size and fun-size portions of traditional favorites like Twix and Kit Kat that now come in one- or two-bite pieces, which is perfect for Halloween," she said.

With Halloween just around the corner, retailers are also focusing their efforts on in-store events that will help them earn brownie points with their consumer bases.

Food Lion, Salisbury, N.C., will open its doors at some of its more than 1,200 stores at the end of October as an alternative Halloween destination for local shoppers and their trick-or-treating children -- a unique outreach that has become an annual practice.

"Each year, we open our stores to trick-or-treaters, providing cookies from the bakery and candy," said Jeff Lowrance, company spokesman. "It's a great way for stores to be good neighbors by providing a safe environment for Halloween."

Fresh Encounter also hosts annual in-store events, particularly for consumers in rural areas.

"As the community market in some of our rural marketing areas, we feel obligated to make Halloween special for some of those children who may not have a large neighborhood for trick-or-treating," said Anderson.