Candy Industry March 2011

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Contents

Kristine Collins

Bernard Pacyniak

March 2011

Associate Editor 847.405.4050 [email protected]

Grace Weitz

Editorial Intern 847.405.4077 [email protected]

Kristine Collins

MANUFACTURER PROFILE 14 GOO GOO CLUSTERS’ COMEBACK KID Lance Paine looks to revitalize Standard Candy Co.’s centennial-to-be brand through a series of quality, production and marketing upgrades.

14

INTERNATIONAL SNAPSHOT: PAKISTAN CI 18

18 DESPITE ODDS, CONFECTIONERY CONTINUES TO GROW An overview of Pakistan’s existing confectionery marketplace touches on major players, main product segments and brands as well as prospects for the future.

ALSO IN

THIS ISSUE ...

RC2

Sweet Talk

Associate Editor Crystal Lindell asserts the importance of trade magazines amidst the transition to digital media.

RC4

New Products

RC8

Industry Trends: Snack Bars

Juicy Fruit Juicy Secret, Kukees, Herr’s Hot Sauce-Áavored Potato Chips, Raisels and Welch’s Fruit Snacks are among this month’s featured introductions. Consumers aren’t just looking for a healthy snack bar; they want a decadent tasting one as well.

EDITORIAL Editor-In-Chief 847.405.4004 [email protected]

Crystal Lindell

Volume 176, Number 3

COVER STORY

Publisher 847.224.8944 [email protected]

ADVERTISING North American Sales 847.224.8944 [email protected]

Dee WakeÀeld

European Sales Manager + 44.207.792.3344 (London) Fax + 44.207.792.3331 [email protected]

Diana Rotman

ClassiÀed Sales Manager 847.405.4116 [email protected]

Jill L. DeVries

Corporate Reprint Manager 248.244.1726 [email protected]

Steve Pintarelli

Group Publisher [email protected]

Jennifer Allen

Sarah Zagacki

PRODUCTION Advertising/Production Manager 818.224.8035 x2214 [email protected] Art Director

BNP CORPORATE DIRECTORS Timothy A. Fausch

Publishing

John R. Schrei

Publishing

Rita M. Foumia

Corporate Strategy

Ariane Claire

Marketing

Vincent M. Miconi

Production

Lisa L. Paulus

Finance

Michael T. Powell

Creative

Nikki Smith

Directories

Marlene J. Witthoft

Human Resources

Emily Patten

Conferences & Events

Beth A. Surowiec

Clear Seas Research

RC8

AUDIENCE DEVELOPMENT Amy Schuler Group Audience Development Mgr. Stacey Noocha Multimedia Coordinator Carolyn M. Alexander Audience Audit Coordinator

Postal List Rental E-mail List Rental

LIST RENTAL Robert Liska, 800.223.2194 x 726 [email protected] Shawn Kingston, 800.409.4443 x 828 [email protected]

For subscription information or service, please contact Customer Service at: Tel. 847.763.9534 or Fax 847.763.9538 or e-mail [email protected] or visit www.candyindustry.com.

RC12 Cover Story: Theater chain has just the

ticket for sales

RC 4

4 CANDY INDUSTRY March 2011

Marcus Theatres’ feature presentation is a new “Grab and Go!” display that entices moviegoers and boosts the bottom line.

Printed in USA

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Contents D E PA R T M E N T S OPENING SHOTS

INGREDIENT TECHNOLOGY

8

28

Tools of engagement

Editor Bernie Pacyniak reflects on the growing influence of social media and how combining new technology and “old school” customer service can bolster brands.

Chocolate manufacturers see sustainable cocoa beans, healthier choices and higher prices as emerging cocoa trends.

NEWS & ANALYSIS

12

For Love of Chocolate Foundation Dazzles with Delights

Plus: The United Nations Food and Agriculture Organization (FAO) and Messe Düsseldorf GmbH will hold a SAVE FOOD congress during interpack.

CI 28

Better-for-You Confections

With the steady growth of the candy market, companies have introduced a slew of new fortified products.

RC 8

SUPPLIER SPOTLIGHT

30

SPECIAL REPORT

24

A sustainable future

Chocotech

Increased emphasis on food safety make Cleaningin-Place functions ever more critical.

CANDY WRAPPER

34

Transforming hard knocks into a sweet career

Setbacks for Elyissia Wassung’s mother, and eventually for Elyissia, go on to open a new opportunity for both in gourmet chocolate.

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Opening SHOTS

Tools of engagement By Bernie Pacyniak

M

ost of my colleagues, both within the industry and here at work, know I’m not much of a social media person. I guess it’s because when I’m at work and/or travelling, I’m pretty much in contact with the confectionery world and my own personal world constantly, even at times instantaneously, via e-mail. In doing so, there doesn’t seem to be much time left for “socializing” on the web. Socializing in real time, real life has its more immediate benefits. I recognize, however, that there is an entire brave new world involving social media. As my new associate editor, Crystal Lindell told me, she has XXX number of friends on Facebook (I’m keeping her number secret to preclude any numerical prejudice since this isn’t my field of expertise). Moreover, she’s thoroughly connected to her smart phone. Hence, it was only natural to delegate our social media initiatives to Lindell and our wonderful student intern from Northwestern University, Grace Weitz, who’s also more in tune with Facebook and Twitter than I ever will be. As typecast as I am at being an “old school” editor,” I’m still capable of adapting to technological and cultural game shifts as long as they mesh with personal and professional goals. In fielding this month’s story on Goo Goo Glusters, LLC, it was interesting to hear Lance Paine, the executive vice president and chief operating officer of the company, discuss his plans of using social media to revitalize this wonderful 99-year old brand. 8 CANDY INDUSTRY March 2011

Naturally, in revamping the company’s website, Paine intends to implement Facebook and Twitter strategies. What I found interesting is that he’s also going to actively pursue bloggers, bloggers who have a following, of course. What Paine explained to me is that these bloggers have a significant influence with their following, which can translate into having an impact on brand building. Then there’s the even more instant forms of communication — text messaging and Tweets. As we’ve seen repeatedly in entertainment, and now most recently in the political upheavals in Tunisia, Egypt, Libya, Iran and other countries, they can be extremely powerful tools in swaying public opinion. But in the end, these are just tools. What’s happening here is that — thanks to technology — people are becoming engaged with a colleague, an acquaintance or co-worker about anything and everything. Often, that engagement helps make things happen. Engagement, however, isn’t relegated to texting or tweeting. As Tony Hsieh, ceo of Zappos.com, Inc., one of the speakers at last month’s NCA State of the Industry Conference explains, integration marketing and social media are all well and good, but the old-fashioned telephone remains one of the “best branding devices out there.” In his book, “Delivering Happiness, A Path to Profits, Passion and Purpose,” Hsieh describes how he built his billiondollar company by focusing on customer service. This Millennial entrepreneur

details how unconventional team building techniques rooted in solid business fundamentals can result in extraordinary organizations that are both profitable and joyful. In digesting all of this in my mind, I’m thinking that the fundamentals of really being successful in business, be it in confectionery or anything else, haven’t really changed. One, it’s critical to keep delivering the best value (be it goods or services) to the customer at the right time and right place to their satisfaction; and two, it’s important to keep tracking your business to ensure it’s doing this consistently. Now we have all sorts of new tools out there. I recommend using them in whatever creative ways your young staff can come up with, but don’t forget what you’re using them for — to connect with the customer and keep him or her happy. After all, confections are about delivering happiness. www.candyindustry.com

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News

& A N A LY S I S

One Àne chocolate night Elite chefs and candy makers came together for a sweet time to help raise scholarship money at “For the Love of Chocolate.”

By Grace Weitz

T

akashi, the acclaimed chef and owner of his namesake restaurant, spoke warmly about his miso braised pork belly and Japanese vegetables. Paul Kahan and David Posey — from the acclaimed Chicago restaurant, Blackbird — served elegant garbanzo bean soup with falafel, sumac and pickled Asian pear. The Executive Chef of Vie and newly appointed Executive Chef at Perennial Virant, Paul Virant, chatted with a lady about his foie gras panna cotta. Even Marie Antoinette made an appearance. What brought all of these elite chefs, pastry chefs and even an Displays, such as this mannequin elaborately iconic 18th century French Queen decorated in chocolate, helped create an air of together? A common cause and a extravagance at the Merchandise Mart. All photos passion for food. by: Crystal Lindell About 900 attendees and more Foundation’s director. than 50 celebrated culinary figures In its sixth year, the fete first was packed themselves into the Merchandise created in 2006 by Pacini after being Mart building in downtown Chicago for approached by one of his employees, Lisa the For the Love of Chocolate annual gala Woodrich. Her daughter Abigail had been on Saturday, Feb. 5. born nine weeks early and was in need of Organized by the For the Love of a kidney transplant. Chocolate Foundation, the black tie Pacini said he approached the fundraiser invited chefs and patrons out co-founders of FPS, Jacquy Pfeiffer and for a night of foodie indulgence with all Sebastien Canonne, M.O.F and they came proceeds raised being donated toward up with the idea of a chocolate fundraiser. scholarships for future full-time students The money from that years’ event went of the French Pastry School (FPS). toward assisting the Woodrich family with “Our guests had a great time and it was the medical cost of the surgery. fantastic to see that a good deal of the “Things just kind of fell into place participating chefs and establishment from there,” notes Pacini, who referred were now alumni of the school,” says to this years’ event as phenomenal. Franco Pacini, the For Love of Chocolate 10 CANDY INDUSTRY March 2011

Known for its extravagance, the affair did not disappoint. Human candy canes danced around the cavernous main entrance while a reincarnation of Marie Antoinette—complete with petite parasol—used her abnormally large dress to cover a mobile table full of chocolate gifts. “The woman in the dress,” as Patrick Fahy, pastry chef of Blackbird, referred to her, wheeled around three main areas: Cocoa Candy Land, Cocoa Cuisine and Cocoa Sutra. “We wanted to do something that wasn’t just a regular fundraiser,” explains Pacini. Housed inside a maze of showcase rooms normally used to display kitchen models and cabinet displays, the Merchandise Mart building served for the first time as a whimsical background for the annual gala. Normally, held in the City Colleges building, the venue had to be changed this year after an influx of ticket sales. Koriath notes that 400 people attended the event last year, but that they had to cut of ticket purchases early this year because of the growth in sales. “We thought, ‘What could be another spectacular space that would allow for more people to attend?,’” says Lindsay Koriath, the French Pastry School’s communications specialist. The huge jump in patrons prompted the foundation to look elsewhere for a venue, eventually settling on the stately Merchandise Mart. Koriath notes that the growth in attendance could be attributed to www.candyindustry.com

The whimsical event included such themed characters as a costumed Marie Antoinette serving desserts to patrons.

an expansion in their marketing efforts. “We’ve just increasingly been trying to get the word out to people,” says Koriath. “This is a fabulous event, an amazing culinary experience.” Patrons like Sue Klaus, who have attended the bash for three years straight, found the new setting quite remarkable. “They’ve really blown it up and expanded it. It’s very impressive,” says Klaus. Despite the excitement over the new venue and wealth of entertainment, the night’s spotlight fell on the food and desserts. Chocolate offerings ranged from a

sea salt caramel and nougat in dark chocolate created by Chris KadowDougherty, founder of Whimsical Candy, to a Verrine from Blackbird Pastry Chef, Patrick Fahy. The layered dessert included eight different parts, but was mainly composed of butterscotch cream, caramelized white chocolate streusel, dark chocolate mousse, and blood orange gelee. Confections, however, weren’t the only highlights. The Cocoa Cuisine section featured savory food from sumptuous butternut squash gnocchi by Chef David

Danielson to a succulently fresh fluke tartar from Merlin Verrier, the executive chef of Graham Elliot and Grahamwich. “I always try to keep things simple,” explains Verrier. “We try to serve things that are raw, bright and acidic.” To go along with the fish Verrier delicately paired shaved fennel, pink peppercorn, and Meyer lemon. Throughout the mingling of delicacies and people a common thread permeated — a sense of community and cause. “These are my people,” said KadowDougherty, a graduate of the FPS. “This is like coming home.”

A myriad of chocolate and sugary confections highlighted the annual gala, which was attended by more than 50 celebrity chefs and candy makers.

www.candyindustry.com

March 2011 CANDY INDUSTRY 11

News & Analysis

Save Food initiative launched at interpack

T

his year, the United Nations to range from 20 to 75%, depending Food and Agriculture on the type of food,” explains Robert urbanization, food development and Organization (FAO) and Messe van Otterdijk, FAO officer for SAVE marketing, logistics and agriculture. The Düsseldorf GmbH will pool FOOD. “The total quantity could be as program encompasses keynote speakers, their international resources to discuss high as 1.2 billion tons. In developed debates, panel discussions and best the problem of food losses and practice presentations. “Between now and 2050 the world possible solutions with experts As Van Otterdijk points from industry, politics and society. out, “We have to seek possible population is expected to grow by This longer-term initiative is based solutions along the entire 50% to 9 billion. All of this growth will food value chain – from farm on three country studies by the FAO, the results of which will be be urban, and most of it in develop- to fork – and with as much presented to the public for the first attentiveness as possible.” time at the SAVE FOOD congress in ing countries... Economic developSector-specific knowledge, Düsseldorf, Germany. international networking ment and investment are needed The SAVE FOOD initiative, and the ability to showcase to improve the situation and get the subjects worldwide – these which will be held during interpack on May 16-17 at the are the skills that Messe food from the farmer to the cities.” Fair, highlights the extent of, Düsseldorf GmbH wishes to - Robert van Otterdijk, FAO ofÀcer, SAVE FOOD contribute to the initiative. and reasons for, global food losses and intends to show — Werner M. Dornscheidt, among other things — the contribution and industrialized countries the food Messe Düsseldorf GmbH’s ceo, explains. that packaging types can make toward loss is about 300 kg per capita per year, “As a trade fair company with global safeguarding foods. which is mostly wasted at the consumer operations, we — including myself To this end, the congress is bringing level. Therefore awareness raising and personally — are aware of the markets together stakeholders from the food behavioral change is highly necessary. and problems of the countries in and packaging industries, retail, politics, “Between now and 2050 the world which we do business,” he says. “As the administration, research and nonpopulation is expected to grow by 50% to organizers of interpack, the world’s most governmental organizations in Düsseldorf. 9 billion,” he adds. “All of this growth will important trade fair for the packaging Within the framework of the congress, be urban, and most of it in developing sector and related processing industries, the FAO will be presenting three new countries. Now in the countries most we have the necessary knowledge of the studies founded on surveys currently food losses occur at production level, as industry, the people in charge and the being conducted in developed, developing a result of underdeveloped production, necessities locally.” and transition countries. conservation, packaging and marketing The accompanying exhibition at the One study investigates the reasons practices as well as inadequate storage, SAVE FOOD pavilion on the interpack for and extent of food losses in developed transport and other infrastructure site is intended to broaden access to countries and estimates the degree to facilities. Economic development and the congress themes and to the FAO which the type of packaging can remedy investment are needed to improve the studies. Among other things, it will show the problem. Another study is concerned situation and get the food from the farmer the best practices of companies and with the same subject in less developed to the cities.” associations in the fight against global countries. The third study aims to quantify In the course of two days at the SAVE food losses. In exemplary fashion, the the investment is needed to ensure an FOOD congress, experts from all regions adjoining Food Court is pursuing a adequate supply of food packages locally of the world will refer to the results of the sustainable catering strategy. in these countries. FAO studies and discuss such subjects as For more information, visit www. “World-wide food losses are estimated the global food supply, supply security, save-food.org. 12 CANDY INDUSTRY March 2011

www.candyindustry.com

Manufacturer ProÀle Lance Paine, executive vice president and coo of Goo Goo Cluster, LLC, looks to restore the Goo Goo Clusters brand back to prominence.

Goo Goo Clusters’

Comeback Kid

Lance Paine looks to revitalize Standard Candy Co.’s centennial-to-be brand through a series of quality, production and marketing upgrades. In doing so, customers and consumers will be reminded of how good a Goo Goo Cluster really is. By Bernard Pacyniak

I

t was the late 19th century British novelist Edward Bulwer Lytton who came up with the metaphor of “forcing a square peg into a round hole.” Although rarely used today, the idiom used to be a battle cry for individualism versus conformity several decades ago. In Standard Candy Co.’s case, the square peg round hole analogy could mean the revitalization of one of this nation’s oldest brands – Goo Goo Clusters. Developed in 1912 by Howard Campbell, the round mound of caramel, marshmallow, fresh roasted peanuts and pure milk chocolate claims to be the world’s first ever combination candy bar. Moreover, it defied conformity — and traditional wrapping machines — by being shaped as an irregular round piece. That, coupled with a wonderful mix of quality ingredients, quickly made it a local and eventually a national favorite for years to come. Despite the onslaught of automation and technology during the 20th century, Goo Goo Clusters remained a production manager’s challenge. As Neal Spradley, vice president of Nashville-based Standard Candy Co., relates, when Jimmy Spradley, Neal’s brother acquired Standard Candy Co. in 1982, the preparation and processing time took about five days, despite using an automated starchwww.candyindustry.com

At a Glance Standard Candy Co.

moulding machine to produce the marshmallow centers. “Our goal was focused on speeding up the process, reducing it from five to three to two days to even 24 hours,” he says. In the end, in today’s highly competitive world of candy bar production, the costs associated with producing Goo Goo Clusters didn’t leave much room for profit margins in a retail arena focused on low-cost treats. In the interim, Standard Candy Co. formed a new contract manufacturing subsidiary, Standard Functional Foods in 1999. Gradually, the emphasis moved away from branded products, such as Goo Goo Clusters and Cumberland Ridge Pecan Rolls. At its peak in the early 1980s, Goo Goo Cluster sales approached $30 million across a broad range of retail outlets throughout the United States. The volume, nevertheless, failed to reflect production and marketplace challenges. Retailers sought inexpensive candies. Despite ongoing improvements, the starch moulding marshmallow process didn’t deliver sought-after efficiencies. Moreover, the contract manufacturing side of Standard Candy’s operations continued to grow. “Sales started to slip and there was little attention paid to the brand,” explains Jimmy. “Contract manufacturing took over.”

Headquarters: Nashville Subsidiaries: Goo Goo Cluster, LLC, Standard Functional Foods Co. Sales: $100 million (Candy Industry estimate) Employees: 700 Plant: 100,000 sq. ft; five production lines Warehousing: 150,000 sq. ft. Brands: Goo Goo Cluster Management team: (Standard Functional Foods Group) Jimmy Spradley, ceo; Tom Drummond, president; Neal Spradley, vice president; Bill Hood, vice president – operations; Dennis Adcock, v.p. of administration; Bryan Lewis, director of business development. (Goo Goo Cluster, LLC): Jimmy Spradley, ceo, Lance Paine, executive vice president and coo.

Enter Lance Paine. Formerly with La Brea Bakery and SLJ Desserts, Paine had extensive experience in bakery food marketing. Having sold his interest in SLJ Desserts, Paine was searching for another opportunity. An investment banker suggested a breakfast meeting with Jimmy. The two met in May and quickly found common ground, which led to Paine developing a business plan for the revitalization of Goo Goo Clusters. March 2011 CANDY INDUSTRY 15

Manufacturer ProÀle Goo Goo Cluster, LLC was formed as a subsidiary of Standard Candy Co. Paine became its executive vice president charged with bringing the gloried candy brand back. As Paine notes, “Goo Goo Clusters had become somewhat of the red-headed stepchild. Both Jimmy and I thought that if it was treated as a contract customer by the company, that would change the way the brand was viewed internally. “It’s important to remember that

Goo Goo Clusters are a quality (From top to bottom) The 13 rows of Goo Goo product, and that it’s made in Cluster base head toward a guillotine cutter. America,” he continues. “The An operator positions the pieces for an initial company was selling this at chocolate bath, followed by a seeding of pecan pieces. The squares received another generous a discount, forgetting what it bath of milk chocolate, changing shape into costs to make this product.” rounds as they head toward Ànal cooling. It was quickly apparent to Paine that customers needed to be reminded of how high quality Goo Goo Clusters actually were. In addition, to ensure a broader acceptance of the product amongst consumers and customers, a review of the ingredient label delivered a clear upgrade. “We no longer use vanillin; we simply buy better chocolate,” says Paine. “In the past, we used pecans with wheat germ. Today, it’s all fancy pecan pieces. “Also, keep in mind that this company has been making Goo Goo Clusters for nearly 100 years. It’s been people from middle Tennessee putting their blood, sweat and tears into the product. We want to celebrate this fact more.” Given that the brand will celebrate it’s 100th anniversary next year, the timing’s ideal to kick off such a campaign. But to ensure that the marketing push dovetailed with a targeted sales effort, it was critical that production challenges be addressed. And this is where the square peg round hole analogy comes into play again. By (From top to bottom) Marshmallow mass capitalizing on existing comes off a cooling drum. Operator slab bar technology, Francisco Amaya cuts out a sample piece the company was able to perform a weight test. Caramel comes off to convert a laborInstead of waiting on the production a second cooling drum and becomes the intensive, batch process into a of marshmallow centers, marshmallow second layer of the Goo Goo Cluster base. After compression and further cooling, the highly efficient, continuous slab mass cooked in the kitchen is poured into mass is cut into 13 rows. line production process. a hopper that feeds a Lloveras BK bar line.

16 CANDY INDUSTRY March 2011

www.candyindustry.com

The marshmallow base comes off a cooling It also meant a better product, one that “Candy is such an experiential thing; drum and travels along a non-stick belt. would be supported by an ever-widening it has a life force beyond the candy aisle,” A caramel layer is then added to the base, marketing campaign. Both customers he adds. afterwhich the two layers are compressed backed the strategy. To build on that life force, Paine has and chilled before they are slit into 13 rows. First, as Paine explains, the marketing moved to tweaking the graphics associated Once the rows gradually separate, effort will focus on home turf. As he with Goo Goo Clusters. First, the logo was they move toward a guillotine cutter that points out, the city gets 10 million visitors stylized slightly to contemporize it. produces 2-in. squares. The squares are each year. The packaging also is getting a face lift, aligned and then head toward the first of Thus, this March, at the Nashville moving from a photograph of the product two enrobing units. International airport, there will be ads for to an illustration. Once a layer of milk chocolate is Goo Goo Cluster by the baggage claim area. It’s not exactly a “retro” look, or a return deposited, squares continue forward Paine currently is looking at initiatives to nostalgia, Paine says. Rather, it’s simply passing under a nut seeder. The seeded nut to get Goo Goo Cluster sponsorships in more reflective of the brand’s heritage. squares begin to take a rounded shape as LP Field, home of the Tennessee Titans By year’s end, the film used for the new they move toward the second enrobing unit. pro football team, and Herschel Greer packaging will be 100% compostable with The second chocolate bath “rounds” a matte film finish. Even the cartons will Stadium, home to the Triple-A baseball out the square cluster before a prolonged be made from uncoated stock. team, the Nashville Sounds. march in the cooling tunnel. After cooling, the clusters head toward one of three flow-wrapping machines, each capable of handling 200 units per minute. As Neal relates, it took about a year to fine-tune the production of Goo Goo Clusters on a slab line. One of the challenges the production team faced was making squares into round mounds. But thanks to “pliable ingredients,” the team resolved the issue. The Goo Goo Clusters travel toward one of three Áow-wrapping The biggest test, machines, each capable of handling 200 units per minute. however, involved comparing old-style Goo Goo Clusters to slab bar-produced pieces “We’re also purchasing Renewable The program will gradually expand “It had to be a side-by-side Energy Credits,” he says. Renewable south as the company begins to focus on comparison, one whereby you couldn’t tell Energy Credits (RECs), also known Southern supermarket and drug store the difference,” he says. as green tags or renewable energy chains to re-introduce Goo Goo Clusters Suffice it to say that the new-method certificates, are tradable, non-tangible into the mainstream. Goo Goo Clusters passed the test with energy commodities that represent proof In April, a new website will debut for aplomb, both from blind tastings as well that 1 kiloWatt-hour of electricity was Goo Goo Cluster. Here too, Paine looks to as efficiency requirements. Today, the generated from an eligible renewable generate excitement through social media company produces about 30,000 clusters energy resource. In this instance, the initiatives, one of which involves bloggers. an hour. company is purchasing kiloWatt-hours “We’re looking to include bloggers During this same time frame, Paine generated from a wind farm in Texas. who have high Klout scores [Klout is a continued to work on expanding the sales Interestingly, all of these initiatives measurement of influence derived from and marketing reach. — better quality, a cleaner ingredient Facebook and Twitter],” he says. “Take As he explained, it was important to statement, compostable film, a smaller for example, Beth Eats [www.eat-drinkreach out to existing customers — Cracker carbon footprint — represent part smile.com]; there are people that trust Barrel (600 restaurants) and Tractor of the new sustainable American her implicitly.” Supply Co. (1,000 stores) — and explain corporate culture. As a result, Paine is investigating the the positioning shift. The upgrading of For Goo Goo Clusters, LLC, it’s also the idea of sponsoring bloggers to get the ingredients necessitated a price increase. beginning of a sweet comeback. word out about the confection. www.candyindustry.com

March 2011 CANDY INDUSTRY 17

International SNAPSHOT

Pakistan

Despite odds, Pakistan’s confectionery industry continues to grow The author provides readers with an overview of Pakistan’ss existing confectionery marketplace, touching on major players, main product segments and brands as well as prospects for the future. By Saif Dewan

D

espite the country’s economic and political woes, Pakistan’s confectionery and chocolate industry has enjoyed an emerging and growing trend in the recent past. Nevertheless, that performance pales compared to other countries within the Asia-Pacific region. The industry has grown at an average annual rate of 6.5 to 7.5% between 20022008. Domestic brands dominate the market accounting for more than 85% of total value sales of the industry. The industry as a whole can be divided between two broad sectors: Branded (highly organized segment) and generic (an unorganized segment). The branded segment features nine prominent, active players in the competitive landscape. However, 80% of this segment’s share is controlled by the five companies listed in Fig. 1. A complete breakout of players in the segment is shown in Fig. 2.

The branded marketplace The branded confectionery and chocolate market is highly price elastic and growing with the bulk of sales 18 CANDY INDUSTRY March 2011

Fig.1: Major Branded Confectionery Companies mpanies in Pakistan Company

Product lines

Brands

Hilal

Candy, Bubble, Jellies,

Ding Dong Bubble, Fresh

Chocolates, Beans,

up, Tulsi, AamRus, Kopra,

powder Drinks, Supari

Limopani

Ismail

Jellies, candies, lol-

Chillimili, Fanty, Now, Bisconi

Industries Ltd.

lypops, Chocolates,

Chocolito, Cocomo, Snack

(Candyland)

Biscuits, Snacks etc.

city, Sonnet

Jellies, candies,

Spacer, Dolphin Jellies, B.P

lollypops, Choco-

Lollies, Dream Chocolates etc.

B.P sweets

lates, Biscuits, Bread,

Est. Annu. Sales

Share %

3.5 billion

26%

2.8 billion

21%

1.7 billion

13%

1.5 billion

11%

1.20 billion

9%

0.8 billion

6%

0.70 billion

5%

0.70 billion

5%

0.50 billion

4%

13.4 Billion PKR*

-

Snacks etc. Cadbury’s

Chocolates (Countlines

Dairy Milk Chocolate, Éclairs,

and Moulded) Toffees,

Softmint, Velvet

Chewable mint candies Kidco

Mayfair

Bubbles candies, lolly-

4ever, Centro-bubble, Lollies,

pops, Chocolates etc.

Punch, Chox

Candies, Toffees,

Creamers, Amrood, Éclair, Cafe biscuit

Mitchell’s

Groceries ( Squashes,

Milk Toffee, Fruit BonBon,

(only Con-

Jams, sauces, Choco-

Butter Scotch, Jubilee,

fectionery &

lates- Moulded and

Golden Hearts

Chocolates)

Countlines , Toffees and candies

DanPak

Sweet Hills

TOTAL

Bubble Gum, Lolly

Chini mini, Fresh’ O bubble,

Pops, Candies

Choco Bisco, Milko Sip

Candies, Toffees

Dr. Milk, NutKut, Love, Cow

-

-

* $1 equals 85 Pakistani rupees.

www.candyindustry.com

International Snapshot

alternative with the country’s coin currency denomination. It would be interesting for SweetHills, 4% the readers to learn that such DanPak, %5 moves, however, have always Mitchell’s, 5% proved to be a “bitter pill” Hilal, 26% for the industry as it brought Mayfair, 6% immense resistance from consumers and trade. Kidco, 9% In some of the cases the Candyland, 21% decline in sales stemming Cadbury, 11% from the price increase was B.P, 13% so huge that it forced the leading brands to roll back the price increase. Even then, they were not able to retrieve their original volumes again. concentrated in mid-price range products. Mitchell’s Milk Toffees and Kidco’s Urban markets account for the major 4ever products are classic examples. share and also for a higher penetration To avoid and defer this situation, rate. Various retail price points exist within pro-active companies in Pakistan’s the mass market segment of chocolates confectionery industry have adopted hovering between the 3 to 25 Pakistan three kinds of strategies that are aimed rupee (PKR) price. at maintaining trade margins: In sugar confectionery most • Reduce either the number of confectionery count good items fall into units per pack, unit size and/or the retail price segment of Rs. 0.50-1.00. packaging to reduce cost. (Rs. is the official designation for rupees). • Alter product quality by reducing Major efforts by industry giants to quantity and/or quality of introduce confectionery units priced at Rs. expensive raw materials. 2 have been in vain so far. • Use less expensive substitute However, Rs. 2 and 3 are popular ingredients as a replacement of price points for lollipops and chocolates. expensive raw materials. The industry has faced a “coin-barrier” Distribution Dictates issue in sugar confectionery products Selling Strategy at least three times during the last About 70-80% of all sugar confectionery three decades when all key players and chocolate sales are generated through unanimously agreed to increase their the wholesale channel. Almost all, but products’ price because of escalating especially Hilal and B.P, rely heavily on the prices of raw materials (first from 25 wholesale channel to generate the bulk paisa to 50 paisa — in mid 80’s, than of their total sales. To support their sales 50 paisa to Rs. 1 — in mid 90’s and through this channel, lastly from Rs. 1 to Rs. 2-in late 2008). they advertise heavily on The confectionery companies were electronic media to create compelled to raise their prices brand pull for their brands by 100% because and subsequently force there was no retailers to buy these brands from wholesale. The underlying reason behind limited coverage in the retail sector by these two companies is they do not have premium priced items that could yield sufficient revenues to make retail distribution viable for their

Fig. 2: Market Share (%) 2008-9

20 CANDY INDUSTRY March 2011

Pakistan At a Glance The Islamic Republic of Pakistan is a medium-sized, densely populated country with more than 170 million people living in 796,095 sq. kilometers. With respect to population and area, Pakistan ranks seven and 43, respectively, among the nations of the world. It is located in southern Asia, bordering the Arabian Sea, between India on the east and Iran and Afghanistan on the west and China in the north. During 2004-07 GDP growth hovered between 6-8%. Inflation remains the top concern among the public, jumping from 7.7% in 2007 to 20.8% in 2008, primarily because of rising world fuel and commodity prices. In addition, the Pakistani rupee has depreciated significantly as a result of political and economic instability.

distribution partners. As a result, they have limited coverage in the traditional retail sector. Since these companies themselves do not emphasize retail penetration, their distributors also take an escape route and adopt the way of easy selling through wholesalers. However, there are companies like Cadbury, Candyland, Mitchell’s and Mayfair that are fully aware of the importance of retail penetration. Hence these companies pay due importance and attention to retail coverage and subsequently allocate resources for the retail sector. As stated earlier the emphasis of Hilal and B.P has always been focused on building consumer pull through mass media advertising (mostly through www.candyindustry.com

Roadtex is a proven LTL transportation provider, specializing in refrigerated confectionery products and nutritional supplements. We are also a proud member of the National Confectioners Association. • Nationwide 17 terminal network with dispatch open 24/7, 365 days a year • Specific on-time to RAD deliveries with a 98.5% On-time Performance Level and the reporting to help you better manage your business • Mass Merchant deliveries at any time day or night is our specialty – “Your One Source for Scorecard Improvement” • No sailing schedules required, we service your needs by giving you the flexibility to ship to all 48 states any and everyday • Custom EDI 214 & 210 reporting • Custom reporting created to your specifications • Custom pricing to fit your budget • All shipments are temperature protected based on your requirements • Weekend pickup-ups and deliveries provided • Critical expedited service available to save that customer

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International Snapshot

Brands and segments television) and pushing their brands through a wide-spread network of distributors and wholesalers throughout the nation. This combination of “push & pull” has proved to be a successful tool in their cases because the nature of their brands also support this strategy as they manufacture mass market products priced at Rs. 1, 2 and beyond. This pricing strategy makes their products equally popular in rural and urban towns among middle and lower middle class. Because of this strategy, B.P and Hilal enjoy the benefits of a wide-spread distribution network in 300-plus towns and more than 350 distributors nationwide (as they have more than one distributor in some towns). They always try to adopt a cost leadership strategy and generate revenues through high volumes of sales. Frequent launches, re-launches and re-introductions of old brands with slight modifications, withdrawals, adjustments in packaging, product designs and even recipe changes are a common phenomenon for these two major companies’ brands. On the opposite end, companies such as Cadbury’s , Candyland and Mitchell’s believe in establishing brands and brand equity and, therefore, emphasize quality as their top priority. Though retailer margins vary from company to company and product to product, the generally acceptable margin in local items for retail trade ranges between 15 to 25%. It is lower for fast-moving brands and higher in the case of slow-moving items.

Drivers and challenges Until the mid 1980’s chocolates were supposed to be the domain of the upper and upper-middle class segments in Pakistan. In 1983 Mitchell’s Jubilee was launched for first time in the Pakistani market at Rs. 3.50 per bar. Due to its attractive packaging, quality, affordable price and focused media support, the brand received un-matched consumer reception and became a success story in Pakistani industry. The brand is still very popular among less affluent consumers and available in three different price points at Rs. 2, Rs. 5 and Rs. 10. In early 2000 Cadbury’s introduced quality products with affordable price. The launch of Dairy Milk (Rs.5/-), 5 Star (Rs.5/-), Velvet (Rs.5/-) and Perk (Rs.3) with attractive dispensing-chillers was the turning and revolutionary 22 CANDY INDUSTRY March 2011

The following provide a snapshot of the most popular brands in various product segments:

point for making chocolates the choice for every one. The role of Cadbury in expanding the chocolate market in Pakistan will become a primer on how to penetrate and grow a fledging segment in an underdeveloped economy. The most common challenges to this industry are soaring prices of raw material, high excise and import duties on raw material, high entry barrier because of strong monopolistic competition and the influx of cheap imported brands through gray-channels.

Trends Driven by marketing initiatives, consumer preferences are speedily changing in favor of chocolates. Independent retailers and wholesalers are still the largest channel contributors. However, the role of international modern retailers (Makro, Metro and Hyper Star) is growing at the increasing rate. Foreign or imported brands are successfully targeting the lucrative premium segments in urban areas.

ABOUT THE AUTHOR Saif Dewan has 14 years’ experience in sales, marketing and distribution management. He has been associated with Pakistan’s leading companies, including Mitchell’s and B.P Sweets where he worked at strategic management positions. Dewan is currently employed by Muller & Phipps Pakistan (Pvt.) Ltd., as a business development manager.

Hard-boiled (candy): Price range 0.50 paisa -Rs.1: Fanty (Candyland), AamRus (Hilal), Choran Chatni (Hilal), Kopra (Hilal), 4ever (Kidco), Butter Scotch (Candyland) and (Mitchell’s), Amrood (Mayfair), Creamers (Mayfair) and Fruit Bonbons (Mitchell’s). Soft-boiled (Toffees): Price range 0.50 paisa-Rs.1: Spacer (B.P) – a brand of 450- 500 million PKR, Milk Toffee (Mitchell’s), a brand worth over 250 million PKR and Éclairs (Cadbury’s) can be ranked top three among others in this category. As of today, there hardly exist any 50 paisa confectionery count goods. Most have been switched to Rs.1 price point. Lollypops: Price range Re. 2Rs. 3/-: twin-lolly (B.P), Paint n Pop (B.P), Kidco Pop (Kidco), Funny Bunny (Candyland) are popular among consumers. Enrobed Chocolate: Price range Re. 1- Rs. 5/- : Jubilee (Mitchell’s), 5 Star ( Cadbury) Perk (Cadbury’s), Now (Candyland), Dream (B.P), Choco Dip (B.P), Kat Kat (B.P) Unitee (Mitchell’s), Sonnet (Candyland), Luxuree (Mitchell’s), Chox (Kidco) and Paradise (Candyland). Moulded Chocolate: Price range Re. 2- Rs. 10/- : Dairy Milk (Cadbury’s), Cone (B.P), Mr. Bear (B.P) Twin Rabbit (B.P), Golden Hearts ( Mitchell’s), Velvet (Cadbury’s). Bubble: Rs. 1: Ding Dong (Hilal) in Rs. 1 and recently launched in Rs. 2 as well. The brand has worth about 1,000 million PKR, Fresh Up (Hilal) – retail Rs.5/-, Tiger (Mayfair) and Kidco Bubble, Centro (Kidco).

www.candyindustry.com

Sweet TALK

Trade Publications Still Vibrant Even as the digital age takes over, trade magazines and their content still are important. By Crystal Lindell Associate Editor

H

i. My name is Crystal Lindell and I work for a print magazine. Yes, print as in, “on paper.” The publication has a website (two actually), and a Facebook page and a Twitter account, but at the heart of our work is our monthly print publication. Long story short, I rely on dead trees and snail mail for my paychecks each month (which makes me a little crazy), but I believe in what we do here. Short story long, we’re doing just fine. I hear all the time that publishing is dying and journalism is on its last breath and print publications are [insert random cemetery analogy]. I receive sad, knowing looks from people when they find out I’m in “the business” that seem to scream “your industry is going to be in a virtual obituary section soon!” But, we have 13,501 readers. Those readers don’t grab our publication off the racks at the grocery store or the coffee table at the dentist office. They are far from random, and we like it that

way. We’re not trying to reach the world, we’re just trying to reach the industry, and we do a great job. They turn to us because we’re one of the few places to turn for industry news, new products and information on how other retailers and manufacturers are doing their thing. It’s like a convention in a book — every single month.

put it in Candy Industry though, every single reader believes it’s relevant. At the end of the line, it comes down to specific content for a specific audience. Do I believe that in the future everyone in the candy business — from the woman buying the chocolate to the guy setting up the displays — will be reading our work on some sort of electronic device (which may or may not include infiltrating dreams through special sleep eye contacts/ear phone concepts)? Yes. I really do. I also love the digital platform for my work. I love the concept of displaying 23 pictures because all 23 are the best and ink is free online. I love being able to link to past articles and outside websites so readers can get more information. And, I love publishing work whenever the mood or the news strikes. So, I look forward to that future. For now though, I’m not worried about print product dying because even if it did, I know we’d survive. It’s our content that’s important after all — both to you and to us.

“They turn to us because we’re one of the few places to turn for industry news, new products and information on how other retailers and manufacturers are doing their thing.”

RC2 RETAIL CONFECTIONER March 2011

As a side perk, it also ends up making the publication a great place for advertisers to reach a specific segment of the world. If you want to tell candy retailers you have a new packaging concept or confectionery manufactures you have a new logistical system, you can’t just place an ad in TIME magazine or even the Wall Street Journal. Too few readers would be interested. If you

www.retailconfectioner.com

New Products M&M’S Brand Star Wars Novelty Candy Mars, Inc., McLean, Va. www.candyriÀc.com 502-893-3626

Welch’s Fruit Snacks

Promotion In Motion, Closter, N.J. 201-784-5800 www.welchsfruitsnacks.com

Welch’s will add a twist to its popular Fruit Snacks brand with the launch of Tangy Fruits. The new sweet and tart treat will feature six different burst-in-your-mouth flavors including Tangerine, Lemon, Pink Grapefruit, Cran-Grap, Cherry and Green Apple. Like all other Welch’s Fruit Snacks, Tangy Fruits will be made with real fruit and fruit juices and contain 100% of the daily value of vitamin C and 25% of vitamins A and E. The item also is fat-free, gluten-free and preservative-free. The product will be available in grocery stores, convenience stores, movie theaters and other locations. Ingredients: Juice from concentrates (grape, pear, peach, and pineapple), corn syrup, sugar, modified corn starch, fruit purees (apple, grape, tangerine, grapefruit, cherry, lemon and cranberry), gelatin, citric acid, lactic acid, natural and artificial flavors, ascorbic acid (vitamin C), alpha tocopherol acetate (vitamin E), vitamin A palmitate, sodium citrate, coconut oil, carnauba wax, red 40, yellow 5 and blue 1. Gluten Free. S.R.P.: (10-count box) $2.99 RC4 RETAIL CONFECTIONER March 2011

M&M’S soon could help the force be with you. Candyrific now has Star Wars inspired candy products — like a Lightsaber that actually glows blue. The dispenser, which instantly becomes ready for battle when you press a red button on the side, features M&M’S characters duking it out with Lighsabers. When you open it up, you’ll find a bag of FUN SIZE M&M’S. The Star Wars-inspired line also includes a M&M’S Brand Star Wars motorized fan, a Star Wars Coin Bank and a M&M’S Star Wars dispenser, all of which also come with FUN SIZE bags of the treat. Ingredients: (Lightsaber) Milk chocolate (sugar, chocolate, cocoa butter, skim milk, milkfat, lactose, soy lecithin, salt, artificial flavors), sugar, corn starch, and less than 1% of the following: corn syrup, dextrin, coloring includes blue 1, lake, red 40 lake, yellow 6, red 40, blue 1, blue 2 lake, yellow 6 lake, yellow 5 lake, blue 2), and gum acacia. Product is kosher. Allergen information: Contains milk and soy products. May contain peanuts. S.R.P. (Lightsaber): $3.99. It features a .53-oz FUN SIZE bag of M&M’S.

Kettle Cooked potato chips Natural Snacks, Addison, Ill. www.naturalsnacks.com 630-628-0211

Natural Snacks, LLC has a new line of Kettle Cooked Potato Chips meant to be a healthier alternative to the conventional kettle chip. The snack, sold in single-serve packages, comes in five flavors, including: Lightly Salted, Unsalted, Honey BBQ, Jalapeno, as well as Sea Salt and Balsamic Vinegar. The chips, a part of the Michael Season’s brand, feature 40% less fat and low sodium. Also, like all of Season’s products, i ificial i l colorings, l i they are all-natural, and contain no preservatives, no artifi no artificial flavorings, no hydrogenate or partially hydrogenated oils, no MSG, no wheat and no gluten. Ingredients: (Sea Salt and Balsamic Vinegar) Potatoes, sunflower oil, sea salt, maltodextrin, dry vinegar, sugar, lactose, dry balsamic vinegar, dry molasses, citric acid, canola oil and natural flavor. Contains: Milk. S.R.P.: (5-oz bags): $2.99, and (2-oz. bags): $1.19 www.retailconfectioner.com

Juicy Fruit Juicy Secret

Editor’s Choice

The Wrigley Company Chicago, Ill. www.juicyfruit.com 1-800-974-4539

The makers of Juicy Fruit have a secret, and it’s got 50% fewer wer rks the calories than their regular gum. Juicy Fruit Juicy Secret marks ick first time Juicy Fruit is available sugar-free in its original stick t form. The gum tastes and smells just like the original Juicyy Fruit. es It currently comes in a traditional flipth open package with pped individually wrapped pected sticks, but it’s expected n pellet to be available in ks form in Big-E-Paks later this year. Ingredients:

Sorbitol, gum base, glycerol; less than 2% f Hydrogenated d d starch h hydrolsate, h d l of: natural and artifical flavors, aspartame, citric acid, malic acid, soy lecithin, mannitol, fumaric acid, acesulfame K, BHT (to maintain freshness). Phenylketonurics; Contains Phenylalanine S.R.P.: (15-stick Slim Pack™) $1.19

Kukees

Herr’s Hot Sauce-Áavored Potato Chips Herr Foods, Inc., Nottingham, Pa. www.herrs.com 1-800-63-SNACK (76225)

Herr Foods and TW Garner Food Co., the Winston-Salem, N.C.based producer of Texas Pete hot sauce and chili sauce, have created Herr’s Hot Sauce Flavored potato chips. Herr’s Ripple potato chips are doused in Texas Pete hot sauce to deliver a three-pepper zing. Ingredients: Potatoes cooked in vegetable oil (contains one or more of the following: corn, cottonseed, soybean, sunflower), maltodextrin, sodium diacetate, hott sauce (aged cayenne red peppers, vinegar, salt, garlic), salt,, spice, monosodium glutamate, sunflower oil, paprika, natural flavoring. S.R.P.: (1-oz. bag ) 35 cents; (1.875-oz. bag) 99 cents; (8-oz. bag) $2.99; (10-oz. bag ) $3.99 www.retailconfectioner.com

Kukees LLC, Sherman Oaks, Calif. www.Kukees.com 310-426-0440 A California baker has created a cookie so exceptional, it has to be spelled differently. “Kukees” are fresh cookies that come in a variety of gourmet flavors, such as cranberry turtle, peanut butter banana and pumpkin white chocolate. Shaped like mounds of dough, and at three ounces each, they’re roughly the size of a cupcake. The fresh ingredients shine through, such as in the dark chocolate cherry, which features chunks of dark chocolate and dried cherries. The company currently offers nationwide dropship delivery in its Kukee gift boxes, and local bulk wholesale delivery. They also are in the final stages of perfecting wholesale bulk delivery nationwide. Ingredients: (Dark Chocolate Cherry Kukee) Butter, eggs, vanilla, baking powder, baking soda, kosher sea salt, white sugar, brown sugar, all purpose flour, oatmeal, dark chocolate chunks, cherries. S.R.P.: $39 plus shipping. The Kukee box is 7x7x12 inches and weighs around 4 lbs. Each Kukee is 3-oz. — Crystal Lindell

March 2011 RETAIL CONFECTIONER RC5

New Products

Raisels

National Raisin Company, Fowler, Calif. www.raisels.com 1-800-874-3726

Raisels are the newest twist on sun-dried grapes. They’re golden raisins coated with sour flavors, like Sour Peach Pucker and Sour Lemon Blast. The makers claim they’re a healthy alternative to candy, cookies and gummy fruit treats because they feature 100% of the U.S. recommended daily allowance for vitamin C, are fat free, cholesterol free and have no high fructose corn syrup and no sodium. They’re packaged in traditional raisin boxes, and are sold in six-pack retail units designed for horizontal and vertical display. Each box also has a joke on the back, such as “What did the boxing Raisel ask for at the barber’s? An upper cut!” Ingredients: (Sour Peach Pucker) Golden raisins, sugar, natural flavor, citric acid, ascorbic acid (vitamin C), sulfur dioxide. S.R.P.: $1.99 for a six-pack brick containing six 1.25-oz. (35 grams) cartons

Fruity Pebbles Treats Post Foods, LLC, St. Louis, Mo. 1-800-431-7678 www.postcereals.com

A fun and convenient snack, New Fruity Pebbles Treats brings Fred Flintstone, Barney Rubble and the rest of the Flintstones gang to life. Post has combined delicious fruity flavor with your favorite Flintstones characters, wacky colors and a marshmallowy texture. The bars have only 90 calories and six essential vitamins including vitamin A and vitamin D. Additionally, the treats are gluten free and contain no high fructose corn syrup. Ingredients: Toasted rice cereal [rice, sugar, salt, red 40, nacinamide, reduced iron, zinc oxide (source of zinc), tumeric oleoresin (color), yellow 6, yellow 5, blue 1, vitamin B6, thiamin monoitrate (vitamin b1), vitamin a palmitate, riboflavin (vitamin b2), blue 2, folic acid, vitamin D, vitamin B12], marshmallow [corn syrup, sugar, gelatin, natural and artificial flavor], fructose, sugar, hydrogenated vegetable oil [coconut and palm kernel oils], partially hydrogenated palm kernel and palm oils, dextrose, glycerin, soy lecithin, whole milk solids, reduced mineral whey powder, nonfat dry milk solids, natural and artificial flavor, salt. S.R.P.: (6.2-oz box with 8 treats): $2.49

Stars & Stripes Cotton Candy Taste of Nature, Santa Monica, Calif. 1-310-396-4433 www.candyasap.com and www.sharicandies.com

Expanding on their current lineup of treats, Taste of Nature has added an American-themed confection to their list. Hitting shelves in time for spring, the Stars & Stripes Cotton Candy is a play on Taste of Nature’s popular Cotton Candy Swirlz, originally introduced as a mylar bag cotton candy in the late 1990’s. The product features the dual flavors of cherry and blue raspberry to mimic the red and blue colors of the American flag. Additionally, Stars & Stripes Cotton Candy is cholesterol-free and fat-free. Ingredients: Sugar, artificial and natural flavors, artificial colors (including fd&c blue 1, red 40, yellow 5, yellow 6). S.R.P.: (3.5-oz. bar) $1.99 to $2.49.

For more new products, visit www.retailconfectioner.com. There, you also can subscribe to our free e-newsletter, sweet & healthy, which features a “sweet of the week.” RC6 RETAIL CONFECTIONER March 2011

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Industry TRENDS

Nutritional Indulgence Consumers aren’t just looking for a healthy snack bar, ar, they want a decadent tasting one as well. By Grace Weitz

C

herry chocolate bliss, chocolate caramel mousse, s’mores, white chocolate macadamia nut and marshmallow nutslide — not a list of flavors usually associated with the words “nutrition bars.” But, as the nutrition and snack bar sector continues to grow — albeit much slower than before — companies have turned toward providing customers with more indulgent flavors. The top flavors are still things such as chocolate and peanut butter, says Bill Patterson, a senior analyst at Mintel, a Chicago-based research firm. “It’s almost like we have this interest to have bars that are nutritionally healthy and good for you and, on the other hand, we do want to indulge ourselves a little bit,” he explains. According to a March 2010 study on cereal and snack bars from Mintel, the cereal and snack bar sector grew 50% in between 2005 and 2010. While Patterson

says category growth will not be as dramatic during the coming years, he still expects the nearly $1.7-billion market to rise 7-8% during the 2010-2015 period. Continued growth will be fueled by companies who target what consumers want — a nutrient-rich, portable snack that also tastes good. People still want their snack bars to be nutritious, but above all they crave a delicious treat in “gourmet dessert flavors.” “One thing we see across the board is people rarely want to give up taste even if they’re trying to eat good,” notes Patterson.

understand the consumer and approach them in a very targeted way, says Patterson. Clif launched a slew of new products in 2010, including adding a chocolate-dipped coconut and chocolate chunk offering to their LUNA line and a mint chocolate chip Gourmet Dessert Flavors and chocolate type to their new LUNA Companies, such as Clif Bar & Co. — PROTEIN line. which in the past year overtook General “The variety of new chocolate flavors Mills’ (GM) FiberOne amongst wellness provide women more options to get bars, and stands as the No. 2 company the nutrients they need like vitamin D, behind GM in nutrition bars overall — calcium, folic acid and iron — while have successfully adopted this approach. satisfying chocolate cravings in less than With nearly $117 million in dollar sales 200 calories,” says Michelle Ferguson, the over the past year, what Clif does so well, is executive v.p of marketing for Clif Bar & Co. According to Patterson, Clif focuses on niche (Latest 52 weeks ending Jan.23, 2011) targeting, producing Dollar Sales Dollar Sales % Unit Sales Unit Sales % their bar for a specific Rank Brands (in millions) Chg. Vs. Yr. Ago (in millions) Chg Year Ago type of consumer. 1. General Mills’ Fiber One Nutritional Bars 158.1 9.80 56.7 13.06 “Our experience 2. Clif Nutritional Bars 117.0 45.26 69.8 34.82 tells us that we will 3. Kellogg’s Special K Protein Nutritional Bars 92.6 29.05 35.0 27.59 continue to attract 4. Zone Perfect Nutritional Bars 68.1 6.76 30.5 1.65 customers as long 5. Clif LUNA Nutritional Bars 57.6 37.07 35.1 31.14 as we keep making healthy foods that Total, including brands not shown 1.2 (billion) 15.31 100.00 people enjoy or have specific needs for, Total US FDMxC (Supermarkets, Drugstores, Gas/C-Stores and Mass Market retailers excluding Wal-Mart). Source: Symphony/IRI Group, a Chicago-based market research Àrm. such as our sports and

Top 5 Nutritional/Intrinsic Health Value Bars

RC8 RETAIL CONFECTIONER March 2011

www.retailconfectioner.com

nutrition products,” says Ferguson Other major players in the nutrition bar segment also have upped their flavor offerings. Abbott Nutrition, which produces the ZonePerfect brand and registers fourth overall amongst nutrition bars according to Symphony IRI, introduced their Cookie Dough line of bars last year. Available in chocolate chip, peanut butter and oatmeal raisin flavors, they contain 170-190 calories per serving and are a “good source” of 17 vitamins and minerals as well as an “excellent source” of protein. Another mainstay amongst the market, Kellogg, also unfolded their own new decadently flavored product — a chocolaty peanut butter version of their FiberPlus Antioxidant Chewy Bar.

Fiber for Fodder Though snack bars are concentrating on flavor, companies haven’t forgotten the raison d’etre for this segment — nutrition. According to figures from Mintel, 61% of consumers say they eat energy bars for

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overall health and wellness, with about half saying they eat them as fuel before exercise. The highest claim of new product launches, says Patterson, go to items that are kosher, higher in protein and fiber, all-natural and organic. To go along with those figures, a Cereal & Energy Bar report from As the nutrition and snack bar industry continues Innova Market Insights indicates to grow, customers are reaching for bars that are that in the U.S. market, allergy-free high in protein and Àber, all-natural and organic. and clean-label bars dominate, with more than 30% claiming to be doubled-layered fruit and nut bar, are also “allergy-free” and more than 25% touting a all-natural and include one serving of fruit. “gluten-free” claim. Mainstays such as General Mills and “People are continuing to look for Nestlé also have hopped on the bandwagon. healthier fare,” says Ferguson. “Demand is GM created Wheaties Fuel bars in the early growing for gluten-free snack options as well part of the year. Co-developed with five of as more organic snack options in general.” today’s elite athletes, each contain 15 grams Clif jumped on board this trend with of protein and 100% of the daily value of five two additional offerings in 2010 — CLIF B vitamins. Nestlé’s PowerBar rolled out a CRUNCH and CLIF C bars. whole new line as well. The PowerBar Pure The CLIF CRUNCH bars are 70% & Simple Long Lasting Energy Bar is an organic with 4g of protein and one serving all-natural snack with high-protein, whole of organic whole grains. CLIF C bars, a new grain and fiber content.

March 2011 RETAIL CONFECTIONER RC9

Industry Trends

Even the smaller companies are taking advantage of these new market trends. EatStrong, a health and wellness company, recently released its own line of all-natural energy bars in February. The bars combine finely crushed flax, sunflower and hemp seeds with omega-3, omega-6 and whey protein, a protein that rapidly absorbs into the blood stream. “They are the one bar you can pick up and not think, ‘this would be perfect if only it did/did not have xyz,’” says Sop Sophie Pachella, the ow owner of EatStrong.

A Less L Indulgent Future Fut The list of new T laun launches offering hea healthful benefits stre stretches on, but eve with these new even pr products, an August 20 study on snack 2010 ba in the U.S. from bars

Euromonitor notes that high-protein and high-fiber bar products, though they’ve been popular in the past, will see very little innovation in the coming years. “Scientific advancements in snack bars, such as high protein and high fiber, are running their course, and will offer limited incremental growth into the forecast period,” says the Euromonitor report. Patterson expects more targeted, niche activity, like that of Clif Bar, to be the way forward. Bottom line, says Patterson, is that the bars succeeding are the ones with a more indulgent platform. High-protein, high-fiber, all-natural and organic bars will always be important, but it is very unlikely that people will give up taste for the sake of nutrition especially as they look to cut back on buying snack bars. “Everyone loves chocolate,” says Ferguson. “Nutrition bars are no exception.” And, with the industry’s track record, it’s not likely companies will quit anytime soon.

A man with a nutrition p plan A bike ride and an energy bar were the bottom of the pyramid for this Calif.-based energy bar company. pany. During his jaunt, owner Gary Erickson took a bite te out of another energy bar and thought hought to himself “I could make a better bar than this.” Two years after his revelation, in 1992, Erickson created the Clif Bar. Now, with more than 19 different Áavor offerings and eight different types of bars, the Clif test kitchen is always innovating. “Our focus on organic and natural ingredients has proven to be a smart business decision that our customers have rewarded us for,” says Michelle Ferguson, the executive v.p. of marketing for Clif Bar. “Part of our innovation philosophy is always trying new Áavors and textures.” According to Ferguson, Clif hopes to unveil 10 new Áavors and products by the summer.

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Retailer ProÀle

(From left to right) Bob Menefee, v.p. of advertising, marketing and concessions for Marcus Theatres; Carolyn Cunningham, a general manager for the chain; and Jim Janssen, a district director for the chain, hold some of the their most popular concessions.

Theater chain has just the ticket for sales Marcus Theatres’ feature presentation is a new ‘Grab and Go!’ display that entices moviegoers and boosts the bottom line. By Crystal Lindell

M

oviegoers at the Marcus Theatre in Sturtevant, Wis., are met with an expansive lobby that overflows with traditional elegance — a grand piano anchors the scene, dim mood lighting hangs from the ceiling in a multi-circle design and plush furniture dots the landscape. But after they get their tickets to the

RC12 RETAIL CONFECTIONER March 2011

show and pass through the old-fashioned lobby, they reach a concession stand notable for its slew of new concepts. Cotton candy hangs on a stand on the counter, the confections are displayed on impulse-like racks in front of the traditional glass candy case and White Castle hamburgers are on the menu. Although popcorn and soda — which account for more than half of vending

sales for Marcus Theatres — are the traditional money makers for theater chains, owners are starting to see how much potential profit there is in other items.

Love affair with candy Moviegoers have had a long love affair with holding a box of candy while watching the latest films. “Everybody knows that movie theater www.retailconfectioner.com

candy is better than any other candy,” notes Jim Janssen, a district director for the chain. Bob Menefee, Marcus Theaters Cooperation’s vice president of advertising, marketing and Left: A traditional glass candy display sits in concessions, says the concession stand at the Sturtevant, Wis., Marcus Theatre. Right: A new “Grab and Go!” candy makes up about 10 to display sits in front of the counter, inspiring 15% of his chains’ vending more impulse concession purchases. sales — a figure that’s been modestly growing over the last few years. “The larger size, Tastes have evolved though. Former that was all about favorites such as Snow Caps and Good and separation from the Plenty don’t have the draw they used too, retail grocer,” he explains. having been edged out by candies such “That was a way to separate as Skittles and Sour Patch Kids, which, are ourselves [and] there was also a way to among their top sellers. Some traditional check carry-ins... and we were also able to movie treats, such as Twizzlers, still hold increase the average sales transaction by their own, though, and also are among the selling a larger item.” top 10 sellers. Even so, Janssen admits that candy Menefee explains that the famous haven’t always been in the spotlight. movie theater boxes for treats are based “Our highest profit item is popcorn,” he partly on the fact that moviegoers usually explains. “As a theater manager, that’s where want to share their candy, and bite-sized I put the focus, on popcorn and soda.” pieces make that easier. At the same time, But now, the chain’s most recent intraditional candy bars tend to be coated novation is anchored in the idea of selling with something that melts very quickly. more candy. Also, many patrons like to mix their candy “Grab and Go!” with their popcorn, and the smaller pieces The Milwaukee, Wis.are more conducive to that. based theater chain — which As for the package itself, Menefee says operates nearly 700 screens at it’s intentional as well.

locations in Wisconsin, Illinois, Minnesota, Ohio, North Dakota, Iowa and Nebraska — most recently started testing “Grab and Go” concepts at 16 sites. They rolled it out in November after noticing the trend at other theater locations, Menefee says. Some, like the one in Sturtevant, Wis., feature floor racks, which come out from the counter and have rows of candy ready for customers to grab before they get up to the attendant to make a purchase. Others have “Grab and Go” racks right on top of the counter. Menefee said initial reports indicate that the concepts are working. “It’s that impulse,” he explains. “See it. Touch it. Oops, I think I better buy it.” And, the concept doesn’t end with candy. Other locations feature refrigerated display cases with water, juices and energy drinks, while still others have an ice cream dispenser installed in front of the vending stand. Although the company doesn’t have

Left: An elegant lobby greets moviegoers at the Sturtevant, Wis., Marcus Theater. Right: Concession stand employee Josh Servie scoops popcorn for a customer.

www.retailconfectioner.com

March 2011 RETAIL CONFECTIONER RC13

Retailer ProÀle

all the data yet, Menefee did note that the counter candy racks haven’t been as successful as the stand-alone racks that pop out. “When you get to the counter, having stood in line for a few minutes, you pretty well have decided what you’re going to get, and we have candy display cases right there that have the same items that are in the counter racks, so why do I reach to the counter rack when I can ask the attendant to get it for me?” Menefee explains. He adds, “[With] the floor racks, people are encountering them before they get up to buy... so as they’re approaching, they’re taking a look and saying, ‘The Milk Duds. Ya, I think we’re going to do that.’” Janssen says the candy somehow looks more real when it’s out on the rack near the customers. Menefee agrees. “There’s no question, at least in my mind, if I’m a patron, that’s there to sell,” he says of the candy racks. “Is that item in the candy case, is that there to sell? There’s that mental thing that they have to go through.” Carolyn Cunningham, general man-

ager for the Sturtevant location, said it’s also enticing for children. “It comes out so far from the concession stand that kids are running up and they’re grabbing it,” she says. “The minute the kid grabs it, the parent says yes.” So far, the only draw back to “Grab and Go” is that the current concession stands aren’t designed for it, Menefee says. For example, at the Sturtevant location, the racks block the glass cases of their top seller — popcorn. “We think that’s kind of obtrusive,” he admits. “That’s not really pretty what we’re doing.” He says it’s likely that if the concept takes off, the company would look to better incorporate it during remodels and new construction. One idea would be to take the space where the current glass candy display cases are and put an insert into that, which would come out 12 to 18 inches. “[We’d] hope that that could be as effective as what we’re doing with the racks,” Menefee says. When the concept first was introduced, he says owners and managers were concerned that it could lead to more theft. “People just have pre-conceived notions... that we have to work through,” he says. “And in the case of shrink, we’re actually measuring that... and there’s no noticeable shrink.” The foundational inspiration for the “Grab and Go” concepts seems to be the impulse lanes at grocers and c-stores. Janssen says that they didn’t think to mimic impulse checkout sooner because they spend so much time thinking about popcorn. “Everything is obvious after Marcus Theatres operates nearly 700 screens you do it,” he says. “It just across the Midwest. (Photo provided by never occurred to us for the Marcus Theatres). longest time.”

RC14 RETAIL CONFECTIONER March 2011

Along those same lines, Menefee says movie theaters look at candy retailing different than a typical grocer or c-store. “I believe when people go to the grocery story, they go to buy groceries, and they pick up snacks,” he says. “When they come here, they’re looking for treats.”

Other concessions One of those treats will always be popcorn. Menefee says the company looks for kernels that expand a lot when they pop and taste great. He adds that most of his chain’s locations don’t feature self-serve butter stations — a newer trend — because many moviegoers like customized popcorn with butter and salt in the middle. That’s only feasible when the concession stand workers do it. Another salty snack that’s edging its way into the concession stand is the pretzel. At Marcus Theaters, Janssen said they tried to sell whole pretzels, but that didn’t take. So now, they sell pretzel bits, which like box candy, are easier to share and more fun to eat throughout a movie. Other non-traditional items that have found their way on to the menu include White Castle hamburgers and Lavazza Coffee. At some Marcus Theatres, concessions stands even sell ice cream, which Cunningham says a lot of people order to-go after they watch the movie. Cotton candy, which the chain introduced about six or seven years ago, also has been a big seller for the company, Menefee says. Now, it hangs on racks right on top of the counter, ready to sell. “We let the customer speak to us,” he says. “Their purchases are going to guide us, along with the supplier community.” Although the list of the treats at the concession stand will never change as quickly as the list of current movies, the chain’s ability to keep up with new concepts will no doubt help Marcus Theatres stay just as relevant as the new releases. www.retailconfectioner.com

BITS

&

PIECES

Top 5 Gift Box Chocolates (Latest 52 weeks) Brands

Dollar Sales Dollar Sales (in millions) % Chg. Vs. Yr. Ago

1. Russell Stover 2. Whitman’s Sampler 3. Hershey’s Pot of Gold 4. Queen Ann Gift Box 5. Ferrero Prestige Total, including brands not shown:

$91.4 $34.5 $21.1 $15.1 $12.1

5.13 1.85 (20.79) (4.89) (8.66)

$224.7

0.86

Dollar Share Unit Sales of Type (in millions) Chg. Vs. Yr Ago 1.65 18.7 0.15 7.1 (2.56) 4.3 (0.41) 8.6 (0.56) 1.5 -

48.2

Total US FDMxC (Supermarkets, Drugstores, Gas/C-Stores and Mass Market retailers excluding Wal-Mart). In addition to excluding Wal-Mart, the FDMxC data also does not include sales at Club Stores or Liquor Stores. Source: SymphonyIRI Group, a Chicago-based market research Àrm.

Japanese designer driven by chocolate Luxury chocolate manufacturer, Q-Pot, has released a unique version of the Mercedes-Benz Smart car in Tokyo that’s sure to get anyone’s sweet tooth tingling. First displayed at the International Fashion Fair, the mainly brown car features a pattern of chocolate bars. Q-Pot’s designer Tadaaki Wakamatus created the whimsical vehicle to help honor the Japanese Valentine’s Day traditions. In Japan, it is customary for the women to give gifts of chocolate to their husbands, boyfriends and male family members on Feb. 14. “I designed this car hoping that not only men, but also women would drive this car and spend sweet time at the wheel,” Wakamatus, a chocolate lover himself, told AP Television. Orders for the limited-edition car could only be placed from Feb. 2 to March 13, a day before the so-called “White Day.” On this day in Japan, men return the favor, giving their own gifts to female family members and signiÀcant others. Although Mercedes-Benz, a division of automotive company Daimler AG, ofÀcially had nothing to do with the creation of this car, the company wasn’t surprised that Wakamatus choose the Smart car as the canvas for his creation. “Smart symbolizes — and is — an alternative solution to four-wheel mobility and has attracted public recognition as such ever since it appeared on the scene roughly 12 years ago,” says Josef Ernst, who works in the communications department at Daimler AG. Purchasing this expressive holiday gift was not cheap, though. While the original Smart car is priced around $22,439 the chocolate-themed car costs $28,780.

Caught on the Web Find the latest in new products, promotions, commercials, games and other interactive resources on these clever URLs, and check out the next issue of Retail Confectioner for more websites worth visiting.

www.landoÁicorice.co.uk

RC15 RETAIL CONFECTIONER March 2011

Chicago chocolatier brews up treats Beer? Good. Candy? Good. Beercandy? Awesome. TrufÁe TrufÁe, a Chicago, Ill.based chocolatier, has created a line of beer-Áavored treats, including: beer and pretzel brittle bits, beer and pretzel trufÁes, beer and pretzel marshmallows, beer and pretzel caramels and beer and pretzel brittle. “I love the combination of salty and sweet... and I’m a huge baseball fan,” says Nicole Greene, TrufÁe TrufÁe owner. “So, it all sort of came together in my head one day.” The beer and pretzel trufÁe — a milk chocolate ganache combined with American chocolate stout, enrobed in milk chocolate and rolled in crushed salted pretzels — was her Àrst creation. Her latest treat, a beer and pretzel marshmallow, combines a thick house-made beer marshmallow dipped in milk chocolate with beer on top and pretzel brittle bits. The company uses Rogue Chocolate Stout, a craft beer, for the entire collection. “You get the saltiness from the pretzels, [and then] with the beer, you get lovely maltiness and a little bit of a touch of bitterness” she explains. “It stimulates every single taste bud.” For more information, visit www. trufÁetrufÁe.com.

www.m-ms.com/us

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Innovations for a better world.

Special

REPORT

A healthy duo: fruits and functional ingredients With the steady growth of the candy market, companies have introduced a slew of new fortiÀed products. By Grace Weitz

H

ealthy candy? Sounds like an oxymoron. Not only does it exist, but it has been successfully growing through a stream of new product launches focusing on nutritional value. According to Euromonitor, sales of fortified/functional confectionery products topped $930 million in the U.S. alone in 2007, indicating a 39% growth during

the previous five-year period. Additionally, sales in the global chocolate market have risen 3% since 2008, clocking in at an estimated $17 billion, and the non-chocolate confectionery market continues to expand, posting a 28% growth in total U.S. sales in a nearly $5.6-billion market, according to a report from Mintel, a Chicago-based research firm. With both these markets ripe, com-

Sales and forecast of non-chocolate confectionery Year

Dollar Sales (in billions)

Dollar Sales % Chg.

Index (2005 = 100)

Index (2010 = 100)

2005

4.3

-

100

78

2006

4.3

1.7

102

79

2007

4.5

3.1

105

82

2008

4.7

3.4

108

85

2009

5.2

9.7

119

93

2010 (est)

5.5

7.7

128

100

2011 (est)

5.8

5.1

135

105

2012 (fore.)

6.1

4.9

141

110

2013 (fore.)

6.4

4.7

148

115

2014 (fore.)

6.7

4.6

155

121

2015 (fore.)

7.0

4.4

161

126

Total U.S. retail sales of non-chocolate confectioner, at current prices, 2005-15 Source: Mintel/based on SymphonyIRI Group InfoScan® Reviews; U.S. Census Bureau, Economic Census and Annual/Monthly Retail Trade Survey

24 CANDY INDUSTRY March 2011

panies are turning their attention down fresh avenues to create what the consumers want — better-for-you candy.

A Fruitful Sector The latest innovation in the nonchocolate confectionery sector lies in one of nature’s purest ingredients — the fruit. According to a non-chocolate confectionery study published in October 2010 by Mintel, 45% of consumers are attracted to labels reading “made with real fruit juice.” “That [phrase] actually ranked higher than other claims like low-fat, sugar-free or reduced-calorie,” says David Browne, a senior analyst with Mintel. The report indicated that the non-chocolate confectionery market has been driven by aggressive product innovation. Browne explains that, as of late, companies have begun including real fruit juice and even some higher vitamin C content into their items in response to consumer demands. “It is very conducive to the product innovation and the formulation of the product,” says Browne, who mentioned several different companies embracing this trend. Confectionery brands like Willy Wonka, who already produce fruity non-chocolate candies, have explored the possibilities of including real fruit juice. Their newest products, Sluggles and www.candyindustry.com

Sour Puckerooms, run under a line titled Garden Variety and contain 25% real fruit juice. Meanwhile, Tasty Brand Inc makes an organic fruit gummy that also has a claim of 100% of the daily value of vitamin C. Continuing along the fruit theme, Browne has noticed another tentative trend — super fruits. The goji berry, the acai berry, pomegranate and even the cranberry have proven rich in antioxidants and health benefits, making for a perfect addition to a better-for-you confection. Interestingly enough, though, even with all the hype surrounding super fruits, very few sugary treats have been released with these ingredients as the star. “One of the caveats…whether it’s acai berry or pomegranate, they’re quite intense flavors and by themselves they’re not very pleasant — they’re very sour,” says Browne, who indicates that the best way to include super fruits in confections is through combining it with other flavors. He also explained that the high expense of super fruits deters companies. Products with super fruits are marketed toward higher-end grocery stores such as Trader Joes and Whole Foods, meaning that “perhaps the specialty gourmet market hasn’t really translated into the mainstream,” says Browne.

Gum Although real fruit juice has fueled most new product innovation, fortified gums and mints actually compose most of the better-for-you confectionery category, focusing on everything from cavity prevention and teeth cleaning to vitamin content and most recently, energy. Philippe Levresse, Roquette’s project manager for technology & applications development, surveyed recent launches, noticing that 4% of new products claiming to possess vitamins and minerals were released in the form of chewing gum. Products such as Kraft’s new Stride SPARK, which established itself in the market in February. The new gum contains 25% of the recommended daily value of vitamins B6 and B12 — nutrients known for helping release energy in the body. “We conducted consumer research that found Americans are looking for www.candyindustry.com

products that not only taste great, but also suit their everyday on-the-go lifestyles.” says Melissa Batchilder, the corporate affairs manager at Kraft Foods. “In response, we created Stride SPARK.” Although Kraft hopes to be successful with their latest item, according to Mintel, functional gum and mint products have not been met with a tradition of success. Wrigley’s Stay Alert gum and Surpass antacid gum folded after disappointing performances. “The vast majority of purchases of these types of products are impulsive,” says Browne. “The consumer that makes these sometimes split second decisions are operating with other priorities in mind as far as flavor and the right price point. Some of these functional [gum] offerings, while they’re good and perhaps even nutritionally somewhat substantial, they are sometimes more expensive,” notes Browne.

Choco-ful of Nutrients Fortified gummies and gums aren’t the only beneficial confections on the market. According to the National

Confectioners Association’s (NCA) 2009 Industry Trend Report, three drivers control the better-for-you industry — portion control, fortified products and healthy chocolate, with 45% of experts noting an emerging trend toward healthier chocolate options. The premium/gourmet chocolate, organic chocolate and dark chocolate market has grown 30% over the last two years due in part to the copious amounts of studies released regarding dark chocolates’ healthy side effects. Born from the fruit of the cocoa tree, Theobroma cacao, chocolate is actually made from cocoa seeds. Because chocolate is a plant-based food it contains many of the same nutrients as other plant-based foods, including flavanols. Flavanols are part of a group of chemicals known as polyphenol antioxidants that have been show to have positive effects on blood pressure, enhance flexibility of blood vessels, insulin sensitivity and glucose tolerance as well as support cardiovascular health. Companies such as Barry Callebaut have expounded on the natural properties March 2011 CANDY INDUSTRY 25

Special Report

of chocolate with their specialty line of ACTICOA Chocolate — released in the U.S. in July. ACTICOA contains a high concentration of cocoa flavanols — three times the flavanol content of typical dark chocolate — and helps to restore a balance between antioxidants and free radicals. “Today, medical experts and nutritionists underline the importance of integrating delicious and fun eating moments in a balanced diet,” says Barry Callebaut’s Chief Innovation Officer Hans Vrien. “Chocolate fits the bill perfectly and the rise of functional chocolate has brought the two worlds together.” While sugar-free options and dark chocolate have become popular, companies are going even further and adding additional nutraceuticals such as omega 3, probiotics and vitamins to their bars and truffles. “Chocolate is a phenomenal carrier when it comes to delivering omega-3, calcium and probiotics into your body,” says Barry Gasaway, v.p. of marketing for Maramor Chocolates. “The chocolate has an absorbing quality that some other foods don’t that help [functional ingredients] absorb into the bloodstream.” Maramor currently carries three different products in its functional chocolate line — a dark chocolate truffle with calcium and vitamin D3, a premium dark chocolate bar with probiotics and a premium dark chocolate bar with omega-3. Beginning first with the omega-3 version three years ago, Maramor hoped to capitalize on what their company thought would be a long-term trend. “We looked at [the low-carb fad] and we looked at functional chocolate and we thought one was a fad and one was more of a lifestyle change,” says Gasaway. He highlights that consumers want not only a snack, but a way to get vitamins and minerals into their body daily. He explains that nutritionists prefer the human body receive what it needs directly from food sources as opposed to a pill. Furthermore, “there is capsule fatigue out there,” says Gasaway. People no longer want to take 20 to 30 pills a day, but instead hope to substitute that supplement with an actual snack. Once consumers make a decision to 26 CANDY INDUSTRY March 2011

add functional ingredients, such as probiotics into their daily diet, they have to decide what food sources to use. Products such as In terms of proMaramor’s Premium mium biotics, Gasaway Dark Chocolate e with explains those Probiotics are just ust one can be found in example of the e growing trend of anything that functional chocolates. colates. is fermented — such as yogurt. To get the daily value needed, however, a consumer would have to eat four cups of yogurt, which creates a calorie issue. “So then you’ve got to find a better source. That is where chocolate becomes an outstanding carrier for probiotics because I can give you [your daily dose] in y seen half an ounce of a food traditionally as an indulgence,” says Gasaway. While he believes Maramor has successfully created these nutrient-rich treats, the major problem lies with trying to convince a weary consumer about the healthy benefits of chocolate. “The biggest hurdle… is to try and overcome the false information that chocolate is not good for you,” says Gasaway Maramor sees education as the root. In order to get the correct information out into the airwaves the company has gone into full-force marketing mode. Expanding their Internet site to include studies on the benefits of chocolate is just the start. Maramor also has created a Facebook page, manned a Twitter account and eventually will be installing a YouTube channel to help spread the word. Live demonstrations and work with specific Whole Foods stores are other ways Maramor is trying to enlighten the public’s knowledge of chocolate. With the industry continuing to grow, Gasaway says Maramor doesn’t want their line of functional products to stop at just three. The company will return to chocolate’s inherent goodness with its upcoming product. They plan to start producing a tablet with a cream-like center or maybe even an almond cluster to be used in a chocolate extremely high in polyphenols — those chocolate fighters that like

radicals to neutralize free radicals. “We see the field growing,” says Gasaway. “Why wouldn’t you want to eat something that tastes good and has an added value for you?” Product placement also can be a challenge for manufacturers, who aren’t sure whether to place their items in the candy or health aisle. Browne says he sees this problem, but expects it to dissipate, pointing out that gum products, even the premium, functional ones, have already begun to be merchandised together.

A Flourishing Future With all of these issues, bigger companies often are deterred from exploring the better-for-you sector. Browne highlights brands like Skittles, Starburst and Jolly Rancher that haven’t really pushed the nutritional envelope because they’re afraid of jeopardizing the reputation of an already strong brand. Regardless, this segment is prime for continued expansion. With a sound market and multiple different avenues showing in a still underdeveloped market, Browne says there is a lot of positive outlook going forward. “I think these better-for-you products are really a trend of interest to consumers across a lot of different demographics — ages, races, etc,” says Browne. “This market has the opportunity to explore products that meet those needs.” www.candyindustry.com

COMMAND DEMAND

Enhance your nutritional appeal

Boost your healthy profile Encourage a natural attraction

© 2011 Almond Board of California. All rights reserved.

Appeal to the hearts of millions

Connect with healthy consumers

Tap into a demand that’s going nuts

AND YOU THOUGHT YOU WERE JUST ADDING ALMONDS.

A lot goes in with a little almond. Start with 13 essential nutrients and a reputation for helping people maintain healthy cholesterol levels. Add in the fact that almonds are the number one nut introduced globally.* And finish with a tastier, crunchier creation that’s sure to appeal to millions in search of healthier products. Blend it all together and you’ve got the recipe for success. Good news about good fat: U.S. Dietary Guidelines recommend that the majority of your fat intake be unsaturated. One serving of almonds (28g) has 13g of unsaturated fat and only 1g of saturated fat. Scientific evidence suggests, but does not prove, that eating 1.5 ounces per day of most nuts, such as almonds, as part of a diet low in saturated fat and cholesterol may reduce the risk of heart disease. *Mintel Global New Products Database and Sterling-Rice Group, Global New Product Introductions Report, 2008.

Ingredient

TECH NOLOGY

A sustainable future Chocolate manufacturers see sustainable cocoa beans, healthier choices and higher prices as emerging cocoa trends.

By Crystal Lindell

Experts expect crop sustainability efforts to be the next big trend.

I

n the future, even a plain chocolate bar won’t be a plain chocolate bar. Rather, it will likely feature a label exclaiming that a third party certified it as sustainably grown; it will be about 70% cocoa, and it’ll probably cost you more than whatever you’re paying now. As the chocolate world changes, makers and consumers alike are looking at a future with increased sustainability efforts and different flavors, while keeping a watchful eye on prices.

Sustainable Cocoa Blommer Chocolate Company’s Director of Cocoa Kip Walk predicts that the next big thing in chocolate is going be sustainability efforts, which the United Nations World Commission on Environment and Development in 1987 defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Walk says it’s an offshoot of consumers expecting sustainability from other products, such as coffee and produce. “I think this is probably the biggest trend the industry’s seen in a long time,” he says. “Major brands are really helping to drive it, and I think it’s the major retailers having a high expectation of what 28 CANDY INDUSTRY March 2011

you’re putting on the shelves.” In fact, major companies such as Cargill and Mars Inc. are even being recognized for their work in this area. Late last year, Mars won the U.S. Secretary of State’s 2010 Award for Corporate Excellence for its efforts to help cocoa farmers in Ghana. The company has pledged to certify its entire cocoa supply — 250,000 tons a year — as sustainable by 2020. Meanwhile, in January, the U.S. Chamber of Commerce recognized Cargill for its work to improve livelihoods for cocoa farmers and their families in Africa, Asia and South America. Courtney LeDrew, marketing manager for Cargill Cocoa and Chocolate, explains

that there is a growing demand for certified cocoa beans. “Consumers want to know more about where their food is coming from and how it’s produced,” she notes. “Chocolate manufacturers, in general, are concerned about the well being of the cocoa farmer and of sustainability in general.” Walk notes that U.S. consumers have been slower to catch on to this trend than others in Europe and Canada. However, he expects that as more products tout their sustainability certification, American consumers will naturally start to expect it on even more of the things they buy. “It is going to become more of an awareness issue,” he explains. “The www.candyindustry.com

consumer is going to start getting exposed more and more.” Walk says he doesn’t know if shoppers will be willing to pay more for sustainable chocolate, but notes that they have been willing to pay more for other sustainable foods.

Higher Prices, Healthier Choices Unfortunately, shoppers may be asked to pay more for their chocolate regardless of whether or not its certified as sustainable. Walk says fundamental market conditions and political unrest where many cocoa plants are grown have contributed to the prospects of higher prices. He says there’s hope on the horizon, but nobody should expect a metric ton of cocoa, which currently is about $3,600, to be as cheap as it used to be. “I think the market is over inflated right now because of the nervousness,” he explains. “Will we return to $1,500 cocoa prices? No, I don’t believe we will. [Instead, the climate] will keep prices north of $2,000.” One way to lure consumers into buying even more expensive chocolate products is by touting the health benefits Manufacturers are keeping an eye on cocoa of the food. prices, which have increased because of Walk says dark chocolate political unrest. Photo provided by Cargill. has become a stable force in the market, a trend he attributes to the fact that consumers see it as healthier Niches Encourage than a regular chocolate bar. Experimentation “That’s an interesting segment though, One trend that Walk sees loosing steam because I see that potentially as a growing is origin flavors — whereby chocolate market for adults, but I don’t see children makers specify which geographic location moving into that sector,” he notes. their beans comes from. Along those same lines, John Zima, “Personally, I think that’s something with ADM Cocoa, said there is more that has kind of come and gone,” he says. demand from customers for their “And I think the economy was part of the chocolate to include things like fiber, as reason for that.” well as a growing interest in coatings with Walk notes that the market saw a lot no added sugar and no added salt. of launches of single-origin chocolate “[It serves to] meet the consumer in 2007 and 2008, but that it’s faded demand for healthier food choices,” since then. he explains. “There is very little demand in the Walk says manufacturers have to general market place for single-origin walk a fine line with healthier chocolate products,” he says. “I think it’s still strong products, though, because they are as a niche area, [though].” unlikely to draw people in who otherwise Another niche trend is experimentation wouldn’t eat chocolate, while at the same with unusual flavor combinations. LeDrew time, most consumers still tend to reach says Cargill also is experimenting more for chocolate as a “comfort food.” www.candyindustry.com

with sweet and savory combinations. “This can range from cocoa nib encrusted scallops seared in cocoa butter, to chocolate raspberry vinaigrette on a green salad,” she explains. “Savory chocolate bars and confections are more common [though]: not only can you find a bacon chocolate bar in your local candy shop, you might also see a chocolate porcini mushroom truffle or a basil thyme confection.” She also said Cargill is seeing more of “the chocolate experience.” “There are new chocolate-themed restaurants and cafes opening and they are not just in New York City,” LeDrew says. “These restaurants not only have chocolate on the menu, but they have chocolate and candy décor.” So, maybe the future of chocolate won’t be a chocolate bar at all. March 2011 CANDY INDUSTRY 29

Supplier

SPOTLIGHT

Hygiene critical to kitchen design Increased emphasis on food safety make Cleaning-in-Place (CIP) functions ever more critical.

T

he design of today’s ing on the recipe, with a modern kitchen turndown rate of more technology should than 50%. All Sucrofilm not only guarantee cookers now include a a good product, but also allow direct drive, doing away maximum continuous run with belt and chain drives, times encompassing a 24/6 minimizing maintenance. work week, even with caramel • The newly developed or fudge recipes, before CIP Caraflex allows caramel (Cleaning-In-Place) is required. masses with a color specHygienic design and trum from milk-white to maintenance friendly features dark brown to be manu(Chocotech Service Informafactured and already has tion System, SIS) are also shown great potential on the key features in minimizing market place. Chocotech’s kitchen, which encompasses hygenic design and downtime. Well-thought out • Recently engineered maintenance friendly features, can produce up to 3,800 kgs/hr on fully automatic CIP loops, usimprovements include continuous multi-shift production runs. ing dairy-type non-mix valves, the automatic adaption of allow part of the system to unup to 3,800 kgs/hr of product on continucontrol parameters to deal dergo CIP while the other part continues ous multi-shift production runs. with varying atmospheric presin production mode. In conjunction with interpack, sures. Such inline viscosity control A full CIP of the complete kitchen in Chocotech will unveil several new develensures a consistent mass quality. one step is also possible depending on opments. Highlights include the following: • The Chocoform PSL drop line, decustomer philosophy. Advanced process signed to manufacture chocolate controls should allow startup procedures • The Chewmaster has been further centers such as lentils, balls and and unscheduled stops because of down developed to include an additional eggs that are eventually panned, steam problems to be controlled safely crystallizer. For the first time, operawill feature a new design. This and efficiently, allowing full product retors can achieve defined continuous allows an easy exchange of the claim to be achieved in an inline process. crystallization, independent of the drop rolls, which facilitates a This avoids the requirement to store large sugar glucose (corn syrup) ratio. As a quick changeover (30 minutes) in amounts of rework, which have to be result, products do not later show any product shape, such as from lentil processed separately. signs of “cold flow.” to egg shape. Another important factor of advanced • Batch and continuous caramel At interpack, stop by booth A07/ process control is compensating for varycookers such as Carastar, YPP and B08, Hall 3. ing atmospheric pressures, which — in Sucrofilm will be on display. The turn — guarantees a more consistent recently developed Sucrofilm 1500 For more information, product. All these and more are part of can handle more than 2,000 kgs/hr visit www.chocotech.de Chocotech’s kitchen, which manufactures (4,400 lbs/hr) of caramel, depend30 CANDY INDUSTRY March 2011

www.candyindustry.com

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WASHERS & DRYERS For Chocolate Molds & Plaques KUHL CORP. - PO BOX 26 FLEMINGTON, NJ 08822-0026

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Organic & Kosher Non-GM Conventional Kosher • Rice Syrups • High Fructose Rice • Rice Syrup Syrup 42 Solids • Rice Sorbitol Syrups • High Maltose • Rice Maltitol Syrup Rice Syrup • Rice Oil • Maltodextrins • Soluble Rice Fibre Phone: (314) 919.5045 • Rice Protein www.habib-ADM.com Email: [email protected] Concentrate

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w w w.can d y i n d u s t ry. c o m 32 CANDY INDUSTRY March 2011

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To place your classified ad in Candy Industry call Diana Rotman at 847-405-4116 Fax: 248-502-9083 E-mail: [email protected] EQUIPMENT FOR SALE

CANDY INDUSTRY (ISSN 0745-1032) is published 12 times annually, monthly, by BNP Media II, L.L.C., 2401 W. Big Beaver Rd., Suite 700, Troy, MI 48084-3333. Telephone: (248) 362-3700, Fax: (248) 362-0317 No charge for subscriptions to qualiÀed individuals. Annual rate for subscriptions to nonqualiÀed individuals in the U.S.A.: $115.00 USD. Annual rate for subscriptions to nonqualiÀed individuals in Canada: $149.00 USD (includes GST & postage); all other countries: $165.00 (int’l mail) payable in U.S. funds. Printed in the U.S.A. Copyright 2011, by BNP Media II, L.L.C. All rights reserved. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations. Periodicals Postage Paid at Troy, MI and at additional mailing ofÀces. POSTMASTER: Send address changes to: CANDY INDUSTRY, P.O. Box 1080, Skokie, IL 60076. Canada Post: Publications Mail Agreement #40612608. GST account: 131263923. Send returns (Canada) to Pitney Bowes, P.O.Box 25542, London, ON, N6C 6B2. Change of address: Send old address label along with new address to CANDY INDUSTRY, P.O. Box 1080, Skokie, IL 60076. For single copies or back issues: contact Ann Kalb at (248) 244-6499 or KalbA@ bnpmedia.com

SUPPLIES

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Also publishers of Beverage Industry, BrandPackaging, Dairy Foods, Flexible Packaging, Food & Beverage Packaging, Food Engineering, Industria Alimenticia, The National Provisioner, Prepared Foods, Private Label Buyer, Refrigerated & Frozen Foods Retailer and Snack Food & Wholesale Bakery. www.candyindustry.com

Petzholdt Heidenauer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. . . . . . . . . . . . . . . . . . . . . . . www.petzholdt-heidenauer.de Roadtex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.roadtex.com Roquette America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RC7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.roquette.com Sensient Colors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RC11. . . . . . . . . . . . . . . . . . . . . . . . www.sensientfoodcolors.com Sollich North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.sollich.com Union Confectionary Machinery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35. . . . . . . . . . . . . . . . . . . . . . . . . . www.unionmachinery.com Wire Belt Company of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.wirebelt.com

March 2011 CANDY INDUSTRY 33

CANDY WRAPPER Transforming hard knocks into a sweet career Setbacks for Elyissia Wassung’s mother, and eventually for Elyissia, go on to open a new opportunity for both in gourmet chocolate.

W

hat do you do when “The Goonies,” “Pretty in life hands you lemPink” and all of the origions? Well, if you’re 2 nal “Star Wars” movies. Chicks with Chocolate founder Elyissia Wassung’s Describe your perfect mom, you bypass the lemonade dream vacation. thing entirely and go straight for A beach, a chair, books the chocolate. When a disabling and a frozen cocktail car accident left her unable to with an umbrella in it. commute to work, Elyissia’s mom Elyissia Wassung and her mom, the women behind South River, N.J.-based 2 Chicks with Chocolate. turned to making chocolate in What book are you curher kitchen as a way to bring rently reading? home the sweet. Top 10 Chocolatier in America for 2009 ‘The Tipping Point” by Malcolm Gladwell. Wassung would then by Dessert Professional magazine — ofload up her shopping cart fers artisanal chocolate as well as fun Aside from a family member, whom and venture down blocks of and kitschy chocolate-covered items. would you most want to be stranded Queens, N.Y. streets, going with on a deserted island? Stephanie Vazquez, a gifted chocodoor to door to sell all she Silence is golden — my husband will be latier and pastry chef trained under could. One day, unfortunately, reading this. renowned Master Chocolatier Patrick some neighborhood bullies Coston, oversees day-to-day operations, stole both. What’s your pet peeve? which can involve handpainting bon It was a cruel lesson, but People without drive and with a lack bons or creating racks of bark and toffee. one that didn’t deter her from of passion. What’s new for 2 Chicks? The being a chocolate entrepreneur. company looks to expand its Wine Following her Mom’s advice to “never I’d give anything to meet: Collection series with such varietals as take no for an answer,” Wassung knew Malbec and Syrah. In addition, custom- Warren Buffet. she would follow her heart and make ers can look for more kitschy items a change. Despite being in a lucrative The best piece of advice that I’ve gotten: such as chocolate-covered s’mores, telecom job while managing her chocoTo never give up, always believe in krispies, pretzels, etc. There are new late business, Elyissia decided to get reyourself and help others that are less hot cocoa flavors in the works, as well ally serious about taking the chocolate fortunate than you. That, of course, as a healthy chocolate line powered industry by storm. She left her telecom came from the wisdom of Chick 2, up with acai, pomegranate and other job and has been happily immersed in super fruits. For more information, visit aka mom. the chocolate world ever since. www.2chickswithchocolate.com 2 Chicks with Chocolate is a mother/ What excites you most about your job? What did you think you would be daughter-owned chocolate company best Everyday is something new. I can take when you grew up? described by some as “Willy Wonka meets 2 Chicks to as many levels as I want. A veterinarian first, then a lawyer. Build-A-Bear meets Sex in the City.” Knowing that I have the power to The South River, N.J.-based, awardtake my team to places they’ve never Name one of your favorite movies. winning operation — recently named dreamed of excites me. 34 CANDY INDUSTRY March 2011

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PRODUCT DEVELOPMENT Confectioners have come to rely on ADM Cocoa for consistency and quality. But what really sets us apart are the added extras you can’t get anywhere else. Like product development. Come to us with an idea, we’ll help you transform it into a high-performance product your customers will crave. To find out more about how ADM’s technical expertise can give you an advantage, visit us at adm.com/ambrosia.

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For customers around the world, ADM draws on its resources—its people, products, and market perspective—to help them meet today’s consumer demands and envision tomorrow’s needs. © 2011 Archer Daniels Midland Company

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