Looking ahead

Pinch yourself. No, this isn’t an attempt to determine your pain tolerance level. Waterboarding is now definitely a no-no here in the United States. Rather, the pinching is simply an interactive approach of saying we’ve survived the first half of 2009.

After seeing my 401K (A self-paying retirement fund based on investing in financial markets popular in the United States) turn into a 201K, in other words, the value was reduced in half, there was no doubt in my mind that this financial downturn was occurring in my back yard, or rather in my future savings and retirement account.

Luckily, I’m reporting on and writing about the global confectionery industry, which even in the worst of  times, tends to be recession-resistant. Consider the fact that candy continues to be affordable and can deliver joy and comfort to the most beaten-down individual.

This capacity to survive tough times prevailed, despite small, midsized and even multinational companies, having had to deal with retail outlets and customers disappearing, increased ingredient, labor, energy and transportation costs, a drop in consumer buying confidence and a nasty credit squeeze.

So now that you’ve made it to the midpoint (Oh yea, you can stop pinching yourself, sorry), chances are that there’s a T-shirt with the words “I survived the great global recession of 2008-2009” waiting for you.

Granted, there have been several casualties along the way. We all know individuals and companies that have been affected. But overall, the industry has fared much better than other sectors, such as automotive, construction, real estate, the list goes on.

What’s critical right now is to re-invigorate one’s resources to take advantage of the eventual recovery. Don’t think we’ve turned the corner? I’m sure there are economists out there that will agree with you. And perhaps the fundamentals aren’t all in place to say we have.

Still, it’s important for all of us to think that we have….have turned the corner.

This “hunkering down” mindset can take its toll on productivity, creativity, mental and physical state of being. It’s hard to be innovative when you’re depressed and angry, or worse yet, feeling powerless.

So what makes me think that just because it’s June 2009, that we’re no longer just threading water to save ourselves from drowning? First, I have seen my 401K funds begin to stage a comeback. Holding steady seems to have worked, although there’s still a ways to go before I can say I’ve recouped my savings back to pre-September 2008 levels.

Second, there are companies such as this month’s cover story, Ferrara Pan Candy Co. (and others), that are committed to future growth, investing $20 million during a time when most are slicing and dicing costs as much as they can.

Third, a recent Nielsen Global Consumer Confidence Survey conducted in April notes that while consumers are still focused on fiscal responsibility, there is pent-up demand for life’s little indulgences, such as dining out, entertainment, vacations. Spending on such indulgences only bodes well for the economy in general, and confections in particular.

Another survey from EquiTrend notes that consumers have stayed loyal to tried and  true brands, many of them being iconic confectionery brands: M&M’s plain candy, Hershey’s Kisses, Reese’s Peanut Butter Cups, Hershey’s Milk Chocolate Candy Bars, and M&M’s Peanut Chocolate Candy.

And speaking of brands, Jason English from J.P. Morgan Securities in his presentation at last month’s All Candy Expo, pointed out that companies who maintained sales & marketing efforts during the 1980s recession grew 275% in the first five years after the downturn as opposed to those that cut sales and marketing efforts, which grew only 19% during the same time period.

My final proof regarding a turning point: G&J Holdings LLC purchased the domain name Candy.com for $3 million. Joe Melville and Greg Balestrieri, ceo and vice president, respectively of Melville Candy Corp. in Weymouth, Mass., comprise G&J Holdings LLC.

Obviously, they are bullish on the future, confident that their investment in an online domain involving all things candy will pay off. Just a side note: The $3 million price tag is the second highest price paid for a domain name in 2009, exceeding only Toys.com, which Toys R Us plucked down $5.1 million. ‘Nuff said.