It's a Sugar High: Candy Makers Ride New Products to Growth

Hershey is punching tiny holes in its iconic candy bar. Nestle is bringing Skinny Cow to the candy aisle. Wrigley is coming out with apple pie gum. Mars is stuffing vitamins and minerals into snack bars. And in case you missed them, Jelly Belly is bringing back rotten-egg jelly beans. In a sugary stampede, candy makers big and small are rushing hundreds of new products to market this year hoping the innovations will bring sweet profits. And no wonder: New product launches helped propel the $26 billion sweets and snacks industry to 2.5% growth in the year ending April 17, which is about double the growth of all grocery categories, according to SymphonyIRI. So the industry is in a rather celebratory mood this week as it gathers for the annual National Confectioners Association's Sweets & Snacks Expo in Chicago. Marketers are showing off more than 2,000 new offerings in a trade show that covers three acres and attracted some 14,000 manufacturers and candy buyers -- not to mention the Peep chick, the M&M gang and dozens of other candy mascots roaming the convention hall, where the smell alone is enough to give you a sugar buzz. Candy is "an affordable indulgence," said Lawrence Graham, president of the association. "We are not recession-proof, but we are recession resistant." In other words, consumers might not be able to afford a big night on the town or a tropical cruise, but they still need their candy fix. Yet they are fickle, constantly searching for that new flavor or crazy combination -- like sweet and spicy chili-covered hard candies and lollipops by a company called Triunfo-Mex. Others are attempting to give consumers new excuses to eat candy -- look no further than Sleep Squares, a bite-sized chocolaty treat by Slumberland Snacks that claims to help "snackers fall asleep fast." And not surprisingly, plenty of companies are seizing on the nutrition trend, with gluten-free products especially popular. The fastest-growing segments are toasted corn-nut snacks, up 18.3% in the last 52 weeks; nutritional health bars, up 15.1%; and chocolate-covered salted snacks, up 10.6%, according to SymphonyIRI data cited by the association. Indeed, one of the most-successful launches last year was M&M's Pretzel Chocolate Candies by Mars Chocolate North America. The pretzels will get a big push by the marketer this year, along with the company's other big recent launch -- Snickers Peanut Butter Squared, a mix of peanuts, caramel, nougat and milk chocolate, said Debra Sandler, Mars' chief consumer officer, who was helping to man the Mars booth, which included a smooth-flowing chocolate fountain by Dove. While the candy category has always been peppered with innovations, "we are looking to do bigger innovations and make them last longer," as opposed to relying on limited-time offerings, Ms. Sandler said. At the same time, Mars is looking to boost its Snickers-branded Marathon protein bar line with a line extension called "Smart Stuff," which is "fortified with a blend of eight essential vitamins and minerals." Hershey Co., meantime, will next month launch a new twist on its classic Hershey bar and Kisses brand with a line extension called Air Delight, a new "aerated" chocolate, punctured with tiny holes on the inside meant to give the treats a "light and airy texture." Nestle USA is launching a Skinny Cow candy line, following up on the brand's ice cream and frozen snack offerings. Hitting stores are Dreamy Clusters, crisps drenched in caramel and covered in chocolate, and Heavenly Crisp candy bars, wafers layered in chocolate or peanut butter and coated with more chocolate. At 110 to 120 calories each, the marketer is trying to hit the "sweet spot between indulgent treats and better-for-you snacking," said Tricia Bowles, manager for division and brand affairs in Nestle's confections and snacks division. Wm. Wrigley Jr. Co, owned by Mars, is expanding its Extra gum Dessert Delights line with Apple Pie, set to debut in September, following the recent launch of Orange Creme Pop, while introducing a tropical flavor called Swerve to its 5 gum lineup. Not to be outdone, Jelly Belly is re-releasing its Bertie Bott's Every-Flavour Beans line in a tie-in with the final film in the "Harry Potter" movie series set to hit theaters soon. The beans come in Soap, Sausage, Dirt, Black Pepper, Grass and, yes, Rotten Egg. "All these flavors taste exactly like they're named," said Jelly Belly spokeswoman Tommi Holt. "It's a very shocking experience." And innovative, to say the least.

It's a Sugar High: Candy Makers Ride New Products to Growth

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