Talking Shop with… Larry Graham

Larry Graham, president, National Confectioners Association, says consumers’ favorite treats can be worked into a healthy diet. How is the candy industry performing during this challenging economy? Larry Graham: With dozens of other categories vying for attention in the store, we have heard, “why should retailers focus more on candy?” The answer is simple—confections are big, profitable and growing. Candy contributes nearly $33 billion to the economy and it is no surprise that chocolate makes up close to 61% of the total. Candy rivals bread and milk with a household penetration at 98%. Candy’s gross margin is on par with other indulgent categories like crackers and cookies and averages an in-aisle margin of 28.1%. It is also one of the few categories that show strength and consistency. While many categories that score well in sales performance drop off when regarding the adjusted gross profit ranking, total confections, including gum, scores third in sales performance out of 68 edible center store categories. What is NCA doing to help grocery retailers understand the importance of candy? One of our newest initiatives was the release of Sweet Insights this past year. Sweet Insights is a comprehensive research program aimed at empowering manufacturers and retailers through consumer, market and category insights to grow and strengthen the confectionery category. Retailers can benefit from an ongoing series of free NCA custom research white papers on topics such as consumption, health and wellness and shopping for confections. We hosted several complimentary webinars on seasonal performance, annual review and other hot topics this past year and have found that our retailers appreciate our deeper dive into the data. We also publish a bi-monthly enewsletter, Sweet Insights News, which addresses specific areas of interest and concern for retailers. How have ingredients, especially the supply of sugar and cocoa, hindered the candy business? We have been fighting a major battle to reduce U.S. government controls on the supply of U.S. and  imported sugar. These controls on supply as well as guaranteed prices for producers were put in place during the depression and have long outlived any economic reasonableness. There has been significant progress, with more members of Congress voting against the program due to its harmful effects on consumers, taxpayers and jobs, but the program remains in place. Cocoa, on the other hand, cannot be grown in the U.S. The cocoa fruit tree is grown largely in orchard like settings on very small farms in West Africa, Asia and Latin America by farm families who do not have the latest technologies or access to market information or even opportunities to further their education or that of their children. We are helping our members partner with governments and development organizations to improve economic and social conditions for farm families while assuring an adequate cocoa supply for chocolate lovers around the world. What has been the response of the candy and chocolate industry in light of increased concerns over diet and health? There is a role for candy in a healthy lifestyle. Research shows that allowing an occasional sweet treat actually helps maintain a balanced diet. Several years ago NCA instituted Guidelines on Marketing to Children. Today, more than 80% of products on grocery shelves adhere to these principles. In 2013 the industry also rolled out a front of pack labeling program similar to those seen on foods, beverages and other products. In 2014 these new labels will start to make their appearance. Increased consumer information is something retailers and consumers can feel good about. In the meantime, we will continue to work with groups of professionals like supermarket dieticians to ensure retailers have the resources needed to answer customer’s questions about confectionery and health. Tell us about your event, the annual Sweets & Snacks Expo. Our 18th annual Sweets & Snacks Expo has become the premiere global marketplace for candy and snacks featuring more than 620 exhibitors and welcoming 15,000 plus industry professionals from more than 90 countries each year to Chicago. U.S. participants represent more than 90% of U.S. confections and 75% of U.S. snacks sales. We have experienced our biggest growth spurt in the past four years and our attendance was up by 10% this past year. You can learn more at www.sweetsandsnacks.com.