getting fresh: A bit too warm and fuzzy
I just loved the headlineThe New York Timesran yesterday: “When Economy Sours, Tootsie Rolls Soothe Souls.” Perhaps a bit long, but it certainly grabs your attention, particularly if you’re in the industry. After all, what can be bad aboutTootsie Rolls(or any other candy, for that matter) soothing the soul?The article (www.nytimes.com) spun a simply charming tale about how several confectionery retail shops were enjoying increased business as a result of the recession. It quoted several individuals’ penchant for indulging in inexpensive sweets as a means of coping with tough times, pointing out that retailers such as Dylan’s Candy Bar in Manhattan, Candyality in Chicago and The Candy Store in San Francisco were experiencing extraordinary sales upticks.
The phenomenon stems from stressed-out consumers seeking a bit of comfort, prompting a return to more blissful and nostalgic times of their childhood. The writer then points out that Cadbury reported a 30% jump in profits, Nestle an 11% increase and Hershey an 8.5% bump in the fourth quarter as evidence.
Well, I wish reporter Christine Haughney’s observations were all true. I mean we all could use an uplift in our industry -- you know, the one labeled “recession-proof.” Now, I don’t doubt that the shops mentioned in the piece are enjoying brisk sales. Traditionally, “sin segments” such as booze, cigarettes and candy do fairly well in tough times, given man’s penchant to seek comfort under duress.
And I applaud Haughney for finding these “pockets of prosperity” within the candy industry. I personally can attest to several sugar confectioners telling me that they are, indeed, doing well compared to others.
At the same time, there are several midsize chocolate manufacturers that are merely coping. Others have had to absorb significant losses as a result of the PCA peanut recall. For them, there’s no recourse to recover those dollars.
Add to that rising commodity prices, energy and labor costs, and I’m forced to question the “recession-proof” label. Even recession-resistant might be a stretch.
Listen, there’s little doubt that the confectionery industry is riding out this storm much better than, say, the automotive, housing and financial sectors. As for those corporate stats regarding profitability, forecasts for 2009 were much more sobering for all those companies.
So I believe the term “riding out” is more apropos than this veneer of prosperity painted in the article. Far from me to rain on any optimist’s parade -- I’m usually in the vanguard of such marches -- but let’s not overdo it.
Let’s face it, most people (and I include reporters in this grouping) don’t comprehend how confections are produced or the investments needed to do so safely and efficiently. To suggest the industry is booming as a result of the recession borders on wishful thinking, I contend.
We all could use a warm and fuzzy now and then, but for the thousands of small and midsize companies out there, this is a real business that many people earn their living from the old-fashioned way, through hard work. It’s all about carefully monitoring ingredient purchases, ensuring efficient and safe production methods, and servicing customers the best way they can. I don’t think the impulse by some to eat more candy during a recession has necessarily made a major positive impact on their businesses.
Moreover, many confectioners depend on seasonal sales. Currently, consumers have exhibited a tendency to reign in their spending, even during holidays.
According to the National Retail Federation, Americans will spend an average of $116.59 this year on Easter-related purchases, down from $135.03 last year -- a 13.6% decline. Candy expenditures will drop from $18.12 to $16.55 as part of that total, a 8.6% slide. And keep in mind that Easter is later this year, typically a boon to candy makers.
So I applaud those of you who are doing well during this recession (drop me a line if that’s the case), but realistically admire those that are coping with it in a plucky manner even more.
On a positive note, I do think the economy will begin to recover this year, say the latter part of the second half. But there have already been some casualties this year within the confectionery industry whom I know won’t be there to enjoy its revival. Guess they weren’t wearing those recession-proof jackets confectioners always have on hand.
Easter sales predicted to drop in 2009
According to industry research firm IBISWorld, consumers are expected to spend less on Easter candy this year. This decrease in spending is forecasted to result in the decline of overall sales by 10.2%, compared to a decline of 7.1% in 2008.“Although candy sales are expected to decline greatly, the forecast could have been much worse had it not been for the holiday’s calendar date,” says George Van Horn, senior analyst with IBISWorld. “Easter occurs 20 days later than last year, so candy producers and marketers have additional days to merchandise their products. This will cushion some of the inevitable blow on spending.”
Of the Easter sales, IBISWorld predicts that 65% of adults will purchase milk chocolate, while 27% will buy dark chocolate. It also notes that consumers will purchase 16 billion jelly beans and 700 million marshmallow Peeps during the Easter season.
Additionally, the firm estimates that 55% of all Easter confectionery sales in 2009 will come from supermarkets, 18% will come from chocolatiers and specialty confectionery retailers, and the rest will be made up by big box retailers, discount, convenience stores and online sales.
For more information, visitwww.ibisworld.com.
Madelaine marks 60th anniversary with new name
Madelaine Chocolate Novelties, Inc. now is doing business as The Madelaine Chocolate Company, in order to mark its 60th anniversary and reflect the company’s extensive product lines. In addition to the new name, the company also has launched a new logo to be displayed on product packaging and foils, along with marketing and communications documents. It’s also creating upscale packaging for its products to reflect their unique shapes, flavor and quality. For more information, visitwww.madelainechocolate.com.
Back to Nature Foods Co. recalls trail mix
Madison, Wis.-based Back to Nature Foods Co., a subsidiary of Kraft Foods, Inc., has issued a nationwide recall of itsNantucket Blendtrail mix containing pistachio nuts because the product “may have the potential to be contaminated with the Salmonella organism.” This recall is not connected with the recent outbreak associated with peanuts or peanut butter, the company said.The two trail mix items being recalled are a 28-oz. bag (UPC code 59283-00020) with a “best by” date between Aug. 20 and Dec. 12, 2009, and a 10-oz. bag (UPC code 59283-31039) with a “best by” date between Nov. 4 and Dec. 12, 2009.
Back to Nature Foods says there have been no cases of Salmonellosis reported to date in connection with these products, but it’s issuing the recall as a precaution. These products were distributed to retail stores nationwide.
For more information, visitwww.backtonaturefoods.comorwww.kraftfoodscompany.com.
SunRidge Farms introduces organic, natural gummy worms, cookies
At the recent Natural Products Expo West show, Pajaro, Calif.-based SunRidge Farms introduced three new organic and/or natural products. The first, Organic Sunny Worms, is USDA-certified organic and contains 100% of your daily value of Vitamins A, C, D and E per serving. The gummies also are gelatin-free and vegetarian.In addition, SunRidge has launched all-natural Frosted Star cookies in frosted raspberry, cinnamon, chocolate, peanut butter and mixed varieties. Also new is its Omega 3 Men’s Energy Mix, which is a nut, chocolate and fruit blend trail mix formulated for men. The product contains zinc, lycopene and Omega 3 for prostate and heart health.
For more information, visitwww.sunridgefarms.com.
