Novelty non-chocolate, both the highest-selling and highest growth segment within the grab bag of “miscellaneous” candy segments, has drawn in consumers through its use of collectible characters, interactive and creative mixes, and modestly priced SKUs.
Market data
The “miscellaneous” category contains several market segments: novelty non-chocolate, licorice boxes and bags, marshmallows, marshmallow crème, and hazelnut spread.
For the 52 weeks ending June 16, the novelty non-chocolate segment was up 26.6% in dollar sales to $1.3 billion and up 10.6% to 400.4 million units, as prices surged 14.4% to $3.35 per unit, according to data from Circana (Chicago). Brands with the highest dollar sales included Ferrara Candy Company, $656.2 million, up 46.2%; The Bazooka Company, $171.6 million, up 11.6%; and Mars Wrigley Confectionery U.S., $90.3 million, up 30.0%.
The hazelnut spread category grew more modestly in dollar sales, up 6.8% to $364.9 million; unit sales fell slightly, down 0.7% to $68.8 million as prices rose 7.5% to $5.31 per unit. The top-selling brand by far was Ferrero USA, $307.3 million, up 4.0%. A distant second on the list was private label brands, in the aggregate, which sold $49.3 million, up 25.6%.
Marshmallows experienced similar growth for the time period, up 6.5% in dollar sales to $321.8 million; unit sales grew 2.1% to $180.2 million. The top selling brand by far was Kraft Heinz Company, parent company of Jet-Puffed, down 0.5% to $171.7 million. Second again was private label, in the aggregate, up 13.9% to $106.1 million. The smaller marshmallow crème category experienced flat sales at $45.3 million.
Lastly, licorice box/bag products saw a slight decline, according to Circana’s figures, down 0.9% in dollar sales to $557.2 million, as unit sales experienced a much sharper falloff, down 12.0% to 190.4 million as prices rose 12.6% to $2.93 per unit. The Hershey Company enjoyed by far the highest dollar sales, up 0.7% to $393.2 million. Second on the list was American Licorice Company, down 5.7% to $66.7 million.
Looking back
Matt Cameron, director of national sales accounts novelty-focused, CandyRific, says his company’s segment—and probably all miscellaneous candy segments—have needed to focus in the past year on more modestly priced SKUs.
“We had prided ourselves for a long time on the higher retail price and the quality of our products,” he notes. “We’ve seen the economy take a toll on consumers’ spending dollars. We, certainly, as a company—and we’ve seen this with our competitors as well—[are] going in on lower retail. We’re not sacrificing quality, but we’re [shooting for] $5 and under, and for certain customers, $3 and under.”
As a company focused on different molds of fans, with eight of the top 10 licenses for kids under the age of 10, this has meant CandyRific needed to pivot dramatically, Cameron reports. “We’ve had to adapt to get to the lower price point because our fans and the molds under them were higher-priced.”
Another trend Cameron has noticed is growing interest in candy-plus-toy combinations. “We built our company on, ‘You can eat it, and still have something left that’s an additional value,’” he states. In addition, customers—both retailers and end user consumers—are looking for more variety, Cameron notes.
Courtesy of CandyRific
“Every license we have, we’ve changed the fans and molds and the way characters look,” he comments. “We’re doing more—we have candy cases, backpacks, and bracelets. We’ve expanded the number of different platforms we’re doing products in, than in the past. With our top licenses, we have six, seven, eight different items.”
Among CandyRific’s new releases in the past year are a candy case and mini-backpack tied to its biggest new license, with Haribo, Cameron says. The company also has rolled out mini-backpacks in conjunction with the new “Minions” movie that came out this summer, and it’s seen “tremendous growth” in “Stitch”-related merchandise, with both mini-backpacks and candy cases, he remarks.
Gummi Pop Surprise, which also specializes in novelty and particularly leans into collectibles, sees major opportunity in toy collectibles that pair with candy, which owner Todd Elliott claims is a $10 billion market. “They’ve remained really, really hot,” he says. “Kids love collecting. They always have … It’s great for retailers because they can keep that product on shelf for a long period of time, and the consumer is not getting bored.”
Today’s children and teens are drawn to anything interactive, Elliott believes. “That’s really important—trying to pack value in, giving kids lot of interactive elements with their candy,” he says. “You’re setting yourself up for creating a product that has these interactive elements that help drive viral content. You’re able to produce millions of organic reviews from social influencers—and videos from people because they want to engage with the content.”
Gummi Pop Surprise’s burger-fries-soda combinations made out of candy seem to be an especially big hit on social media, Elliott remark. “That’s what they’re eating,” he says. “They’re engaged both physically and mentally with the product. There’s a lot of emotional attachment. It’s empowering kids to create their own.”
Elliott, whose company uses distributors like Flix and CandyRific, agrees with Cameron that more modestly priced products are winning over consumers in 2024. “You really don’t want to be above that $3.50 or $4 price point,” he states.
“We also do 100% pure candy versions where they’re just getting more combinations of the candy; for that, we’re targeting $1.49 or $2 at retail. Those are really strong retail price points now. That is another overall market trend, is that $4 and up category is a little less attractive to consumers based on the economy. The consumers want to be in that, for true novelty collectibles, $3.50 and under; and for pure confection, $2 and under.”
Gummi Pop Surprise has attempted to address these trends and consumer desires with its recent product releases. For example, the Snax Pack line offers 42 collectible characters, with certain limited-edition, hard to find characters. “They might be glitter-coated, or translucent, or see through,” Elliott surmises. “All kinds of things that drive collectability, drive sales and consumer engagement.”
The company has rolled out candy-plus-gel mixes where consumers can create their own gummy flavor experiences, he reports, along with “crunchy things that taste like Nerds, or sprinkles, or sour powder. They’re able to create their own … they’re gaining a strong affinity because of the interactivity. It seems like a great value because you’re getting all these mix-and-match flavors. It’s generally pretty fun.”
In the licorice category, Candy Industry’s Best New Product for 2023 was American Licorice Co.’s Pickle Roulette.
"Pickle Roulette was launched on April Fool’s day in 2023, appearing to be a joke, but an actual product for purchase on eCommerce. Since the straws are all the same color green, you never know when you’re going to get pickled,” says Kyle Stout, senior product manager, American Licorice Company.
Within two days of the launch, the licorice was sold out. Over 1,600 orders were placed, from 1,500 new customers, in less than 48 hours. The item has now become an everyday item, available at a variety of retailers. The roulette concept has spurred ideas for other products, such as Ghost Pepper Roulette, that was launched on ecommerce as an LTO for Halloween last year.
Looking forward
During the coming year, CandyRific expects to continue its strategies of lowering its price points and adding different platforms. Many of the company’s newer items will hit price points below $5 that it hasn’t typically offered in the past, Cameron states.
“That’s the strategy and what we have planned to do for the next 12 months,” he says. “You have Target and Walmart and Five Below, who all have $1, $3, $5 front-end type of stuff. Looking to play in all those price points is a strategy we’re implementing. We’re halfway through that implementation.”
During the fourth quarter of 2024, CandyRific will launch a Stitch Paw Patrol “sticker stamper” that includes a hand-held stamper, a roll of stickers, and candy in the handle, Cameron notes. The company also has picked up the license for Gabby of “Gabby’s Dollhouse” and will be rolling out a mini-backpack, bracelet and fan in Q4.
Gummi Pop Surprise believes that current trends around interactivity, creating your own flavors, social media influencing and modest price points will continue, Elliott says. “With all of these things, it seems like we were correct in our assumptions,” he says. “We’re putting additional interactive elements inside the packages now. We’re going to double down and say, ‘Let’s give them more.’”
The price points in the toy aisle itself have dramatically increased over the past five years, Elliott notes. “You cannot walk into the toy aisle and buy a small, collectible toy for under $5 these days—$5 is entry-level,” he observes. “A lot of those things are $7.99, or $10. As toy retail prices have gone up, the candy-plus-toy collectibles are becoming more attractive. … [Consumers] can’t get that same value in the toy aisle anymore. It helps consumers, and it’s a good thing for novelty candy if you can stay in that price range.”
Given the success of the burger-fries-soda gel combos, the company is expanding to six other “surprise meal” themes, including one with cupcakes and other baked goods that “will come with gel that’s kind of like frosting,” Elliott reports. “Just because we have had such a great reaction here, and knowing that, at $1.49 to $2.99, it’s a great value. The kids can get all that engagement and interactivity, and we’re going to give them different candy themes, and keep it fresh and interesting.”
