Consumers still sweet on chocolate candy

While it's tough to be an indulgent food in a health-conscious society, chocolate candy is still seeing growth in a few key segments. While the category is finding its balance between satisfying a loyal base of consumers looking for a guilty pleasure and an increased national focus on healthy eating, new segments are emerging. Unreal, for example, is a preservative-free, natural chocolate with 25% less sugar than traditional chocolates.

Portion control is also a focus, but it's re-sealable bag chocolates, not portion-controlled packages, that are generating growth, according to Mintel. Larry Lupo, VP of sales for convenience and drug channels at Mars Chocolate North America, called bite-size unwrapped chocolate "a major trend." "These bags offer convenience and portability, and they're easy to share," he said.

The seasonal segment also offers growth opportunity. According to Mintel's research, nearly three-quarters of chocolate consumers think seasonal chocolates are a fun way to celebrate the holidays; another 45% think that there should be seasonal chocolates available for more holidays.

"The opportunity to continue expanding the seasonal chocolates market is there, but chocolate companies need to be able to offer consumers more choices without raising prices," the study said. Lupo said that seasonal confectionery sales continue to grow at Mars, especially seasonally-themed singles. This year, Mars will introduce Snickers Peanut Butter Pumpkins for Halloween, Twix Santas for Christmas and Twix Hearts for Valentine's Day 2014.

Drug stores, according to a recent study from National Confectioners Association, have the biggest opportunity to pick up "channel leakage" sales when consumers stray from their primary source, especially when drug retailers keep their prices competitive. More than 40% of respondents in a recent NCA survey said they purchased candy at another channel due to lower prices. Value ranked higher than both convenience and variety when it came to tempting consumers to purchase at another channel.

Since impulse is such a large part of the category, tempting consumers is vital. To capture shoppers' attention when they enter a drug store, Mars developed a new Basket Entry Rack, a free-standing display that holds three shelves of candy above a stack of shopping baskets. The same rack can be placed along the path to purchase or at the pharmacy to drive additional sales.

The article above is part of the DSN Category Review Series. For the complete Candy Buy-In Report, including extensive charts, data and more analysis, click here.