Crème de la Candy

Premium confections are not just for the rich and famous anymore; now, the category is getting rich and famous thanks to more indulgent everyday consumers.
In spite of the economy, most Americans are getting a lot richer—in their choice of gourmet candy and chocolates, that is. The trend has been recently recorded in other consumable markets as well. Packaged Facts has reported that in addition to premium chocolates, gourmet coffee, upscale ready-to-drink beverages/bottled waters, and super-premium ice creams are all growing at a faster pace than their mainstream counterparts.
Gourmet/premium chocolate is especially attractive to today’s health-conscious consumers thanks to the industry touting the health benefits of its higher-cocoa, lower-sugar content and antioxidant properties, especially compared to other snacks and treats.
If you couple that news with the increasing consumer urge to have an affordable luxury item—even in down times—it becomes clear why the category is doing so fine.
Premium/gourmet candy deserves a lot of fanfare and attention. Too often, retailers with space limitations are squeezing it in with mainstream candy. That is not the best way to max out this growing category. While it can have a spot or two in the regular candy section, it is truly the impulse purchase of impulse purchases, and deserves some air space around it. Atop a display in the gourmet deli section, on a seasonal endcap, near a rack of upscale greeting cards, in a display basket on the cosmetics counter, in an upscale, seasonally themed window display—these and many more options that a retailer can come up with depending on its own unique merchandising and layout techniques, will showcase it better than on a crowded candy shelf. This is the Cadillac of candy—retailers should treat it as such.
And this is true no matter what the price, which is another important point to note: the upscale confection category has come down a bit in price points to satisfy the consumer’s overwhelming response to smaller bites of self-gifting candy. Gourmet candy items that are five dollars and under are now a mainstay of the category. Change-makers are even available for 99 cents. But retailers should not confuse these with more typical candy items. They are still to be merchandised as the premium items that they are.
Gourmet candy has baby boomer written all over it. Gourmet boxed chocolates, specialty dark chocolates, organic, and functional chocolates/confections (focusing on adult issues of health concerns and the environment) fulfill this still desirable consumer market’s comfort factor and concerns as they gray; while still appealing to their “I’m worth it” attitude.
But they are not the sole special ones. Young professionals and trendsetters, particularly professional, educated women over age 22, have been recently targeted by upscale candy manufacturers.
Where do you not put gourmet confections? With gourmet foods showing up in the strangest, yet successful places—such as car wash counters where customers go to pay—retailers are limited only by their pre-conceived notions of where upscale candy should go within their stores. The most important point to remember is that consumers are pressed for time—especially those looking for quick ways to treat themselves while they run errands. The same customer that might only buy a suit at Nordstrom’s is now very accustomed to buying upscale consumables at the grocery store, and yes, even the car wash. So go crazy with it. See what happens when you put a dangler of upscale chocolate packages in the automotive department. Chances are, many will bite.
Candy-giving holidays used to be the prime times to promote gourmet and premium confections. But now with more consumers indulging in the category on a regular basis, that thinking is no longer a good retail strategy. Sure, there is seasonality to the larger gift boxes and baskets of premium sweets; but it has practically vanished in the smaller sizes that have become most popular today.
A much more effective and slowly emerging trend is to use the Farmer’s Market concept and apply it to seasonal merchandising opportunities in gourmet candy. More dried fruits and nuts, for instance, will be well-marketed in the fall and winter, while cherry and lemon candies will do best in the summer.
American chocolatiers are moving up in status. Many claim that they can make premium chocolate as well as that of any European country. Perhaps even better, they have become masters of putting an American spin on their upscale confection concoctions—such as targeting the American female chocolate consumer with tongue-in-cheek packaging, and playing up “girlie” images and wrappings to this very professional group, which has turned out to be just confident and secure enough in their careers and status to love the more feminine focus.
Expect the category to become even more fine-tuned. For instance, pairing fruit with chocolate has been well-received in recent years, but it was indiscriminate; in the near future it is expected that only the best fruit flavors, such as raspberry and orange, will be included in an upscale line. The wilder flavors, such as pear, will probably fall by the wayside. It is also expected that extremely hot and spicy flavors, such as those that are often more ethnic-appealing, will be replaced by more comforting notes of cinnamon and nutmeg. The bizarre, really obscure flavors will probably fall away. In its place—sweet and salty will gain as a popular confectionery combo.
Organics are expected to play more of a role in the chocolate side of gourmet candy; while new mint items and “tasting” wafers” will dominate the non-chocolate side of things. n
The U.S. Market for Gourmet Chocolate
• Overall sales in the segment have been on the rise in recent years, growing to $243 million at retail in 2003, the latest sub-segment figures.
• 69% of Americans agree that rich, dark chocolate is an upscale, indulgent alternative to standard off-the shelf chocolate varieties.
• The category still has plenty of room for growth if it’s to catch up to its European counterparts; in Switzerland per capita consumption of upscale chocolate is twice that of the American consumer.
• 80% of chocolate consumers prefer portion control pieces; portion control and gourmet candy desires were found not to be mutually exclusive.
Source: Packaged Facts

Merchandising Musts
Think warehouse clubs.
The warehouse club sector gets a lot of credit for getting the gourmet/premium candy category off its feet in this country as a more mainstream confection. Other retail sectors would be wise to copy some of the successful tactics from this channel, namely: featuring limited edition gourmet items every year, gearing up for holiday seasons with holiday-appropriate oversized gourmet gift treats, offering upscale candy gift certificates (pre-packaged by the retailer) as a line extension for customers who want to give upscale treats without knowing exactly what the recipient likes, and sampling gourmet candy during high traffic times, such as weekends before a major gift-giving holiday (Christmas and Hanukkah, Mother’s Day, Valentine’s Day, etc.)
Play up portion-control.
A recent gourmet chocolate study reported by Packaged Facts found that easy-open/re-sealable, portable, single-serve packaged for the confectionery market is a growth market because it provides extra convenience for impulse and grab-and-go eating. It was also noted that another growth market is smaller, bite-size candies that ease second thoughts about consumption: people who would never eat several candy bars in one day might much more readily eat several bite-size chocolates.  Therefore, the trend towards miniaturization and the trend towards more premium and indulgent candies are not mutually exclusive. Retailers need to showcase their offerings in petite premiums.