Ten years ago, non-chocolate novelty/kids’ candy was practically on auto-pilot. It was a category of automatic growth, and so all kinds of new itms were fired off at a rapid pace. Buyers may have been overwhelmed, but at least it was for a profitable cause.

Demographically speaking, that is changing. Currently, the “baby boomlet” generation is in the 15-24 age range, which is swelling, according to the U.S. Census Bureau. But just below that group, kids ages 0-14 (the core customers of novelty) are in decline, as compared to years’ past. The category has already taken some hits and had a few misses; some players observe there are too many items and too great a chance of being burned with residual inventory, especially in the labor-intensive landscape that comes with the category.

Retailers and distributors who are putting more intelligent merchandising behind the category are up for the challenge — that includes alternative-channel candy player, Claire’s Stores, Inc., a specialty retailer offering value-priced costume jewelry, accessories and cosmetics to young women through its two store concepts: Claire’s  and Icing by Claire’s. Previously, the novelty candy assortment was all wrong — there was a lot of “gross-out” candy and more boy-skewed items that were just off the mark in terms of its young-lady core clientele. But before the chain bailed out on the category, it took a better look at it — with the help of some distributors — and realized it needed more “girly” items.

Retailers will find they can’t please all kids with all novelty candy.

Specialty arts-and-crafts retailer Michaels is aiming at young mothers and their shopping-partner children with its approximate 32 seasonal/96 everyday candy SKUs, “60 percent of which is probably novelty and kid-related,” according to David Beadle, senior buyer. While the chain has had good success positioning separate seasonal and everyday candy fixtures right up front, he is leery of highlighting one aspect of novelty candy: movie licenses.

“I tried to get into some newer movies like “Cars,” but my hesitation goes back to “Cat in the Hat” — we bombed with those licensed candy items,” says Beadle.

But that doesn’t mean Beadle is opposed to all licensed candy products. Apparently, many television items have been a good bet. “We do well with Scooby-Doo, Dora the Explorer, Sponge Bob — a lot of the basic stuff,” says Beadle.

In the convenience store industry, Naperville, Ill.-based wholesale distributor Eby-Brown Inc. has witnessed marketplace changes that have led to a core price goal for the channel: 99 cents. “If you went back 10 years ago, novelty was a very big deal; then it waned and died off for our channel, but in the last year, we’ve seen resurgence,” says John Scardina, Eby-Brown vice president of merchandising. “Now, vendors are coming in with good-quality items with playability, and price points where they need to be for us; 99 cents is ideal; there is also some drift to $1.29.”

Convenience stores have had some touch-and-go success with price points higher than that — even as high as in the $2.99 range. “But retailers are focusing those in high visibility areas, mostly up at the cash register,” says Scardina.

And actually, a permanent in-line home for the category is not very common in convenience stores, according to Scardina. “Retailers who deal in the novelty segment understand that if it’s going to be successful, they have to be flexible in their merchandising arrange-ments,” he says. “We deal in a lot of in-and-out promotions, where retailers are not necessarily carrying these items every day of the week, but there is a continual flow of movement.”

Then there are those retailers who have the perfect market to go “gung-ho” with novelty. Philadelphia-based Five Below, Inc. (all items are priced five dollars and under) is a four-year-old chain of 49 stores in five Mid-Atlantic states focused on the teen and tween market.

The stores are non-gender specific, and in addition to the kids themselves, “moms just love us for their pre-teens’ parties,” says Melissa Timmons, buyer for candy, novelty and rack merchandise.

In terms of kids’ candy, “everything that’s new that comes out, I try to find a way to fit it in,” she says. But it’s how she fits it in that makes the difference.

At Five Below, everything has its place in special sections. As far as candy goes, there’s a “10 for a dollar” section and a “four for a dollar” candy wall. There are shipper displays of the month; for June, it will be “Pirates of the Caribbean.” There is also a gum section and a “dollar movie candy” display.

“We’re always bringing in the new, discontinuing the old,” says Timmons. While it’s true she has “some items we’ll just never get rid of,” such as Topps’ Baby Bottle pops, Ring Pops, and anything from Pop Rocks, Timmons also makes it her mission to expand on those standards by having every single form and flavor of them. “Kids know we have every variety of Bubble Tape in here,” she says.

Meanwhile, if something doesn’t work, it’s out. “If something is a real dog, we know right away, usually in the first week,” Timmons relays. And then typically in three to fours weeks, that item is gone and something potentially new and wonderful is in its place.