Novelty trends: Category's constantly changing to stay relevant
Category leaders turn to hot licenses, product innovation and seasonal offerings to lure customers.
The thing about novelty candy is that there is no such thing as resting on your laurels.
Those in the category have to constantly create new products, keep up with the latest licenses, respond to the latest trends, and update their portfolio with every passing season — which is why the category isn’t for the timid or the faint of heart.
After all, there aren’t many one-hit wonders in the novelty category segment — it’s all about what you’re planning to sell next.
Novelty chocolate sales are way down, compared to last year — about $6 million in total sales, or about 52 percent lower than last year, according to data from the Chicago-based research firm IRI, analyzing the last 52 weeks of sales, ending Aug. 10, 2014.
And even novelty non-chocolate sales are down as well, albeit it much less dramatically than novelty chocolate. Last year, there were about $8.2 million in novelty candy sales, or about 1.8 percent less than the year before, according to the same data from IRI.
But CandyRific’s President Rob Auerbach knows that with the right strategy, the novelty candy sector can be a hot commodity.
His company is the top seller of novelty chocolate candy, with about $2.9 million in sales last year, according to IRI.
“It gives the retailer a point of difference and a reason for customers to make repeat purchases,” he says.
And, Rob Swaigen, v.p. of global marketing, Jelly Belly Candy Co., says novelty candy isn’t just for kids — even adults can be lured in by something fun and different.
“For example we introduced Draft Beer flavor of Jelly Belly beans in January and have expanded into a giftable Jelly Belly Draft Beer Can and a small beer bottle,” he explains. “We package the flavor separately from our regular mixed collections to target the exploding craft beer trend and to direct the marketing to adult fans. When approached as a gift item, novelty for adults can blur the lines with gifting.”
A major focus for any good novelty candy maker is seasonal — with its perfect combination of constant change and gifting.
“For example, Walgreen’s does a great job of having an exciting, new and topical seasonal set,” Auerbach explains. “Therefore, customers are now trained to go there every season for their needs. Smart retailers need to think about their sections as developing a relationship so consumers make repeated purchases, not a one-time sale.”
And, the constantly changing season is also a great excuse for candy makers to constantly introduce new items throughout the year.
“Consumers want something new and exciting, especially if it going to be part of gifting such as Christmas stocking, Valentine’s Day classroom exchange or Easter basket,” Auerbach says.
Of course, even with all the latest and greatest candy-filled gadgets, manufacturers have to keep an eye on their prices. However, novelty items can usually get away with a higher price point than everyday confections.
“Price points are, of course, always important, but the retailer can have some flexibility as most novelty is offered on an in/out basis, so there is not a comparison going on such as retailer X is lower on my favorite bag of M&M’S,” Auerbach says. “CandyRific puts together programs that cover all the important price points.”
Swaigen says consumers are looking for products with play value that also make great gifts and party fare.
“The idea is to go beyond something to consume immediately and make it a memorable occasion,” he explains. “The Jelly Belly Gift Box lines keep expanding — the presentation of single flavors inside the box creates the opportunity for more fun and social tastings.”
Jelly Belly also has had a lot of success with its BeanBoozled line, which features identical jelly beans that are one of two flavors — either something delicious or something awful. And the candy is so fun that it’s even become an online hit.
“Trying to select the ‘good bean’ from the pairs of identical flavors, even being grossed out by the ‘bad beans,’ has become a video sensation,” he says. “We’ve seen a significant uptick in fan-created BeanBoozled Challenge videos and many are by adults. Some of the videos have generated a million views on their own.”
The company is planning to expand the line in October, with a new 1.9-oz. package of BeanBoozled.
Another major factor for novelty candy is licenses. Frozen and Minions are particularly popular right now, but there’s also the classics, like Star Wars.
Jelly Belly recently introduced a line of Disney Frozen packages that have been extraordinarily popular, and their new Star Wars gift box will be released in advance of the 2015 movie.
CandyRific also knows the value of a popular license.
“Great licenses will definitely drive sales,” Auerbach says. “Right now, our Frozen offerings are doing incredible business. In 2015 we will have a range of product for the new Minions and Star Wars movie, both of these properties will drive sales in ways non-licensed items cannot.”
Auerbach says retailers have to offer licensed confections if they want to take their candy section to the next level.
“Retailers must have an offering of licensed goods or their customers will view them as convenience purchases only,” he explains. “Retailers will get the results they earn, if they simply offer what everyone else offers their sales will be flat and sales will be totally driven by traffic count in the stores.”
As for the future of novelty candy, the limits of candy makers’ imaginations are the only boundaries.
“I think this is a category without a ceiling,” Auerbach says. “We are constantly innovating our range and increasing sales without cannibalizing existing sales.”
And with so many stores out there that haven’t yet gotten into to the novelty candy segment, there’s plenty of room for growth.
“We are opening up new outlets that are not traditional, such as Best Buy, Cracker Barrel and Burlington Coat Factory,” he says. “Novelty confectionery is still an underserved market in many outlets. We have found you just have to have traffic count to make sales as the purchase is impulse. Airports are an important distribution channel, as you have the purchase combined with the gifting element.”
So it looks like novelty candy really can go “To infinity and beyond!” as long as manufacturers are willing to keep up.