It’s a given that brands are important to candy and gum companies. But just how important?

Getting to the heart of that question is what Confectioner’s exclusive Top 100 Power Brands study is all about.

The Power Brands ranking conducted for Confectioner by Intangible Business LLC, an independent brand valuation company, systematically evaluated top-selling candy and gum brands on eight criteria to arrive at the Top 100 list. A panel of five confectionery industry experts provided input for the study. (See sidebar titled, “The Methodology,” for more details on how the Top 100 list was compiled.)

The Methodology To conduct the Candy Power Brands study, Intangible Business LLC, a brand valuation firm with offices in London and Milwaukee, collected five years of historical sales data provided by Information Resources Inc. for the leading 300 candy brands and top 100 gum brands. The IRI data tracked sales for the brands in food, drug and mass (excluding Wal-Mart) channels. Next, Intangible Business organized data by year per brand and combined data for varying volumes and brand extensions. For example, all Snickers revenues were consolidated. This data was then condensed into a master list of the top 175 candy and gum brands on the basis of 2005 revenue. To determine the qualitative strength of the brands, five confectionery industry experts scored each of the 175 brands on eight measures of brand strength. The measures included the following: Share of Market – a volume-based measure of market share; Future Growth - projected growth based on historical data and future trends; Premium Price Positioning – a measure of a brand’s ability to command a premium price; Market Scope – number of markets in which the brand has a significant presence; Brand Awareness – a combination of prompted and spontaneous awareness; Brand Relevancy – a capacity to relate to the brand and a propensity to purchase (i.e. how likely a consumer is to want to purchase it); Brand Heritage – a brand’s longevity and a measure of how it is embedded in local culture; Brand Perception – loyalty and how close a strong brand image is to a desire for ownership. Each of the preceding eight measures was then averaged individually and in aggregate to arrive at the overall brand score for each of the Top 100.

Brand valuation is a way of measuring a brand’s worth or value and, in particular, its ability to generate future income on the basis of historic performance coupled with future trends. It must be reported in financial statements during acquisitions and may be required in the case of litigation or to help monitor a company’s marketing initiatives, among many other applications, explains Elise Neils, Intangible Business managing director.

Neils and her Intangible Business colleague, Bradley Sarna, developed the Power Brands study methodology for Confectioner, employing the same kinds of tools they use when conducting brand valuation research for clients. The study ranks the brands, but it stops short of assigning a specific value to each, Neils explains, because the detailed financial data needed to do so were not available for the large pool of candy and gum brands our panelists evaluated.

Although sales figures were the starting point in this study, a brand’s “power” ranking does not necessarily correlate directly with its sales. As Sarna points out, “All of the brands were evaluated on eight criteria. Factors such as relevancy and heritage go a long way toward determining how a brand will rank.

“In other words,” he continues, “a brand’s imagery, history and appeal to consumers are among the important factors in establishing its ‘power.’”

Consider, for example, that Just Born’s iconic, 54-year-old Peeps brand is No. 27 on the Power Brands list, although it comes it at No. 69 on the basis of sales tracked by Information Resources Inc. in food, drug and mass (excluding Wal-Mart) channels. Another striking example is Kraft’s Toblerone - No. 17 on the Power Brands list, but No. 124 in sales in the IRI-tracked channels.  

Brand power is particularly important in the candy/gum category compared with most other packaged goods segments, says Neils. “There are very few industries where brands play such an important role,” she emphasizes.

“Much of the value of confectionery companies can be attributed to intangible assets - mainly brands,” Neils continues, adding that candy/gum is one of the most profitable segments of the consumer goods sector. Only beverages (alcoholic and soft drinks), tobacco products and cleaning products are more profitable sectors, she notes.

 “Branded, publicly held candy companies such as Hershey, Tootsie Roll and Wrigley consistently achieve double-digit profit margins, well above the consumer goods average of 7 percent,” Neils continues. “The presence of powerful and well known brands within these companies contributes to each company’s high profitability and strong market value.”

For a specific example of “the vast value attributable to brands,” Neils cites Wm. Wrigley Jr. Co., which has a market value of approximately $14.3 billion and net assets of about $2.2 billion, according to a Wrigley 10-Q report and NYSE 2006 Trading Summary reported in The Wall Street Journal on Jan. 2, 2007.

Leading Power Brands by Projected Future Growth
Rank	Brand	Future Growth Score
1	Ice Breakers	8.2
2	Lindt Lindor	8.0
3	Reese’s Chocolate	7.6
4	Ghirardelli	7.4
5	Dove	7.0
6t	Orbit	6.8
6t	Hershey’s Special Dark	6.8
8t	Hershey’s Kisses	6.4
8t	Trident	6.4
10t	Hershey’s Chocolate	6.2
10t	Ferrero Rocher	6.2
t = Tie

“This indicates that approximately $12.1 billion of Wrigley’s market value is attributable to its intangible assets, including Power Brands such as Altoids, Orbit Juicy Fruit and a dozen others, also included in the Top 100 Power Brands list,” she concludes.

American Licorice’s Red Vines brand didn’t make the cut for the Top 100 Power Brands  listing. But if the list were calculated regionally rather than on a national basis, chances are excellent that Red Vines would indeed be ranked among the “power players.”

West of the Rocky Mountains, Red Vines frequently leads the pack in non-chocolate sales as calculated by Information Resources Inc., reports Aaron Johnson, director of consumer marketing for the company. But in many markets east of the Rockies, sales aren’t as strong, which means that American Licorice must come to market with a mixed bag of marketing tools. In the well-developed West Coast markets, the emphasis is on marketing tactics that encourage consumers to increase purchase, while in markets like the North Central region, where Red Vines has started to establish a foothold, the focus is on building trial.

“Part of how I want to build brand loyalty is that I want to rely on our existing consumers to be brand evangelists to people who may not be so familiar [with the brand],” says Johnson. “What I see my job as a marketer [to be] is to find ways to help people who already love Red Vines to communicate with people who could love Red Vines.”

To that end, American Licorice has sponsored contests in which consumers share their stories about Red Vines. Winning entries are printed on licorice trays; 160 stories have been printed thus far. Johnson describes it in this way. “If you’re a new Red Vines user and you don’t have a lot of emotional connection [to the brand], if you see stories about their [other consumers’] connection, maybe in some way, their stories can become your stories,” Johnson reflects.

Next, American Licorice will be printing consumers’ drawings of some of their favorite Red Vines moments such as the one shown here.

Talk about an emotional connection! Margaret Asselin Woods, marketing director for Masterfoods USA’s Dove chocolate brand, says Dove lovers experience that and more as they relate to the brand.

Leading Power Brands by Brand Heritage
Rank	Brand	Heritage Score
1t	M&M’s	10.0
1t	Hershey’s Chocolate	10.0
3	Hershey’s Kisses	9.8
4	Reese’s Chocolate	9.6
5	Trident	9.4
6t	Snickers	9.2
6t	LifeSavers	9.2
6t	Marshmallow Peeps	9.2
6t	Tootsie Roll Pops	9.2
10t	Altoids	9.0
10t	Nestlé Raisinets	9.0
10t	Nestlé Chocolate	9.0
10t	Wrigley’s Spearmint	9.0
10t	Wrigley’s Double Mint	9.0
10t	Tootsie Roll	9.0
t = Tie

Leading Power Brands by Brand Perception
Rank	Brand	Brand Perception Score
1	M&M’s	9.8
2	Altoids	9.6
3t	Hershey’s Chocolate	9.4
3t	Hershey’s Kisses	9.4
3t	Reese’s Chocolate	9.4
6t	Snickers	9.2
6t	Marshmallow Peeps	9.2
6t	Jelly Belly	9.2
6t	Lindt Lindor	9.2
10t	Wrigley’s Spearmint	9.0
10t	Toblerone	9.0
10t	Ghirardelli	9.0
10t	Dove	9.0
t = Tie

Leading Power Brands by Brand Awareness
Rank	Brand	Brand Awareness Score
1t	M&M’s	10.0
1t	Hershey’s Chocolate	10.0
1t	Hershey’s Kisses	10.0
4t	Snickers	9.8
4t	Reese’s Chocolate	9.8
4t	Trident	9.8
7t	LifeSavers	9.4
7t	Wrigley’s Double Mint	9.4
7t	Nestlé Chocolate	9.4
10t	Kit Kat	9.2
10t	Wrigley’s Juicyfruit	9.2
t = Tie

Leading Power Brands by Premium Price Positioning
Rank	Brand	Premieum Price Positioning Score
1t	Lindt Lindor	8.0
1t	Ferrero Rocher	8.0
3	Brown & Haley Almond Roca	7.8
4t	Ghirardelli	7.6
4t	Altoids	7.6
6	Listerine PocketPaks	7.2
7t	Dove	6.8
7t	Altoids	6.8
7t	Toblerone	6.8
10t	After Eight Chocolate	6.6
10t	Mauna Loa	6.6
t = Tie

“Most consumers love chocolate,” says Woods, “but our consumers have an affair with Dove. Once people try it, they tend to become loyal customers. Dove is much more than a chocolate; it’s a relationship,” she maintains.

Reinforcing consumers’ connection to Dove is its ready availability in mainstream channels. “We’ve found that once people taste Dove, they know the chocolate is superior in taste and silky smooth texture,” says Woods. “The fact that they can find that superior chocolate in their mass store of choice for a reasonable price becomes exciting and reinforces the brand for them.”

The brand’s advertising tagline, “My Moment with Dove,” was designed to allow consumers “to reconnect with themselves, even if just for a moment,” says Woods.

Matt Petronio, vice president of customer and brand development for Peeps maker, Just Born, is another marketer who talks about brand loyalty in terms of relationships.

“The success of a brand is determined ultimately by consumers, and the strength of the relationship that develops between the two [the consumer and the brand],” says Petronio.

“Having a strong brand is important for success in the candy category because it satisfies two important constituents: retailers and consumers,” Petronio continues. “For retailers, a strong brand will generate the sales/profit they need because there is confidence that consumers will pull them off their shelves. For consumers, a strong candy brand gives them the confidence in their decision to purchase the candy, because they know their ‘want’ will be satisfied.

“Critical to continued brand growth, though, is the ability to consistently respond to and deliver against the evolving requirements of both the retailer and the consumer,” he adds.

It’s hard not to love a Hershey’s Kiss; after all, this 100-year-old brand is all about love and affection. Not surprisingly, the company is capitalizing on that with its marketing communications initiatives, reports spokesman Kirk Saville. “The ‘Kiss Someone,’ tagline is at the heart of the new Hershey’s Kisses television and print advertising campaigns,” says Saville.

The venerable Hershey’s Kisses brand marks its 100th year in 2007, so it’s hardly surprising that it scores high on heritage in the Power Brands study. “Consumers’ passion for the brand is a result of the personal connection the brand has made for 100 years,” says Saville.

There are seven Hershey’s Kisses varieties available every day. Watch for limited edition Hershey’s Kisses with Coconut Crème, Hershey’s Kisses with Vanilla Crème, Hershey’s Kisses with Candy Cane Bits and Hershey’s Kisses with Mint Truffle in the months ahead. Also on tap for the brand’s 100th anniversary year is a Hershey’s Kisses birthday celebration held — where else but? — Hershey, Pa., “the sweetest place on earth.”

For a candy novelty product to stay relevant to U.S. consumers for 55 years is no small feat, but Pez has achieved it by consistently delivering value and fun, says Joseph Vittoria, CEO of Pez Candy Inc.

Of course, the collectibility factor hasn’t hurt. Classic Pez dispensers can sell for tens of thousands of dollars. And Vittoria and his team work hard to home in on the hottest collectible prospects each year.

Last year’s Orange County Chopper Pez items were red hot thanks to the popularity of the cable television series and Pez’s creative promotional efforts.

“That’s how we’re continuing the relevancy,” says Vittoria. “We’re keeping Pez closely associated with pop culture.”

What’s ahead for this year? One hint: If you’re an Elvis fan, this collectible will be for you!

No one at Jelly Belly takes the brand’s powerful appeal for granted. The company’s marketers are intently focused on how consumers perceive the brand as well as how to ensure its continuing relevance, says Lance Jensen, vice president of marketing.

The perception among consumers is that Jelly Belly jellybeans are of high quality and feature authentic flavors, Jensen continues, adding that, “we work hard to live up to that.”

As for relevance, he continues, “One of the most popular questions here in marketing is, ‘Does this activity or program increase the relevancy of the brand?’”

So what’s Jensen’s take on the essence of Jelly Belly? “At the heart of the brand is flavor and fun and a little bit of magic dust from the marketing guys,” he says.

Kraft’s Toblerone brand has had limited distribution in the United States for about 30 years, which makes its No. 17 ranking on the list particularly impressive.

Worldwide, however, its scope is broad; the brand is distributed in 120 countries, says Laurie Guzzinati, associate director, corporate and legal affairs, Kraft Foods. So it’s not surprising that Toblerone is well known for the quality of its smooth, Swiss milk chocolate and distinctive honey nougat, particularly among consumers who have traveled internationally. Soon, however, Toblerone’s U.S. presence may be even stronger, says Guzzinati, because the company has “plans in place to continue to build distribution and to provide more consumers with the opportunity to try Toblerone.”

The marketing tagline, “Lose yourself in the Toblerone triangle,” is designed to work on several levels. On the literal level, it references the triangular shape of the chocolate and the packaging. Metaphorically, it focuses on savoring the Toblerone taste experience.