Podcast: How candy manufacturers are crafting new treats for today's Halloween consumers

Andy Hanacek is senior editor at Food Processing. Andy has covered meat, poultry, bakery, and snack foods as a B2B editor for nearly 20 years and has toured hundreds of processing plants and food companies, sharing stories of innovation and technological advancement throughout the food supply chain. Linda Becker is editor-in-chief of Automatic Merchandiser and VendingMarketWatch.com. She has more than 20 years of experience in B2B publishing, writing, editing, and producing content, primarily for manufacturing and process engineering audiences. Andy and Linda recently spoke with IndustryWeek editor in chief Robert Schoenberger about the future of candy manufacturing and the latest flavor innovations.

Below is an excerpt from the podcast:

IW: Andy, you have some statistics for us about the importance of Halloween to the candy industry. Can you give us some stats? How much of the profits come from this day of the year?

AH: There's a lot on Food Processing in the lead up to Halloween. We obviously get a lot of pitches, a lot of data, a lot of information from processors and data providers, market service providers, those kinds of folks. Some cool things. Those of us who have celebrated Halloween for many years, like Robert mentioned, would be interested to know that 97% of Americans are going to hand out chocolate and candy this year, according to the National Confectioners Association. More than 2/3 of those people, they give trick or treaters two to three pieces of candy. I usually stick around here at the house while my kids, who are now grown, one of them doesn't even trick or treat anymore, but the younger one does and goes out with my wife, and they go trick or treating. But I hang out here, and my waistline doesn't need all that extra Halloween candy lying around, so I want to get rid of it. It's always a gauge. How many pieces of candy am I supposed to give these kids? And it obviously varies based on how many kids show up. You’ve got to kind of guess. But again, more than 2/3 of folks give trick or treaters two to three pieces of candy. I think this one’s funny because more than half of parents admit that they steal their kids’ Halloween treats after the fact, which means that the other half is probably lying. But supposedly more than half steal their kids’ treats.

IFT, through the Mars Tricks, Treats, and Trends Report, reported that fun-size candy, you can buy full-size candy bars, fun-size, or mini-size candy. They surveyed folks, and fun-size candy is the most purchased. 75% of people purchased the fun-size candies for trick or treating. And then a little more serious trendy data. Euromonitor says the confectionery category should stay stable this year, but Halloween spending overall through the National Retail Federation is expected to decline year over year. So people are cutting back on decorations and things like that. But confectionery candy spend should be pretty stable. So fun facts, good news. I guess overall, Halloween is not turning into a Grinchable kind of a holiday for candy lovers. And we'll talk more about that as we go.

IW: I guess if you’re going to have to cut back on costumes and decorations, that’s fine. Just don't skimp on the chocolate. Speaking of that, on the chocolate side, we've heard a lot of reports over the past year about rising commodities prices, especially for cocoa and things like that. Both for Linda and Andy, is that affecting what we're seeing from the candy companies? Are they downgrading the amount of chocolate, pushing other more sugar-based candies and less of the chocolate stuff? Are you seeing any other sort of trends we should be aware of?

LB: I'll take that first. Candy is made up of chocolate and then all the other candies like gummies and that sort of thing. Then you have the gums like chewing gums. And I would say chocolate still is king. So even though cacao is up overall in terms of its costs, that basically means revenues are up for the companies. But sales in volumes are actually down a little bit, but chocolate is king. It’s what people want. So, 56% of the market goes to chocolate, and then 32% goes to the confectioneries of gummies and that sort of thing, and then the balance would be gum. It's interesting when you look at the trends generationally. Boomers and Gen X, we all love our chocolate. That's the foundation of it. But what you’re really seeing in the younger generations is this real trend towards unusual flavors and gummies. Gummies are huge with younger kids and personally, I don't get it, but gummies are huge. It will be interesting to continue to watch that and to see how that changes. But as it stands right now, candy makers make candy that people want to buy, and they're making chocolate even though it's more expensive.

IW: I think of the Jim Gaffigan line when he was talking about why cops like doughnuts, and it's why do people like chocolates? Because they know the difference between right and wrong. Chocolate is wonderful. How do you not want chocolate? My father doesn't eat chocolate. I don't understand him for that. I mean, he's a great guy in every other way, but he doesn't like chocolates. I've just never been able to trust him 100% because of that.

AH: One thing I would add to what Linda said is, again, we get so much data, and Euromonitor actually sent us a release talking about how private-label chocolate and non-seasonal, so non-Halloween decorated chocolate if you will, was expected to make more appearances this year as consumers still crave that chocolate. They want chocolate, but they don't want to pay the higher price for the name brand or the pumpkin-shaped chocolate or whatever it is. I'll be curious to see when Christmas rolls around. There's always the Christmas-tree-type shape. See if that holds in the next couple months, because I don't expect that sugar and chocolate cocoa prices are going to suddenly fall off a cliff or anything like that and bring prices down. But that was an interesting tidbit I saw.

IW: Linda, you go to these candy shows. What are you seeing on the horizon? Anything catch your attention the last few times you were at a trade show?

LB: Well, I see a lot of the things that I alluded to already. You're seeing a lot of innovative products. You're seeing new form factors like taking legacy products and coming out with newer versions of them. Tic Tac has been around forever as that little, tiny mint, and now they’ve come out with a chewy candy. Kellanova, which is not really candy, came out with these Pop-Tart crunch things, which are like little bite-sized Pop-Tarts. Those are incredibly popular. I thought they were a little sweet, I'll be honest, but everyone else I let try them said, “Oh, these are great.”

You're seeing new flavors, like Kit Kat went with a vanilla, or you'll see mashups. I saw at a recent show a Reese's Peanut Butter Cup where they were putting other, different inclusions inside of it. There was like a major cup with other things in it. So in a lot of cases, we're seeing a lot where you're taking these traditional legacy brands and innovating. And on the gummies and the confectionery side, you're just seeing more flavors, a lot of limited-time-only things. I saw this week a candy that was taking a gummy and doing inclusions like strawberry seeds. Real seeds. Again, back to Gen Alpha and Gen Z, they like exotic flavors. They were raised by Millennials that gave them avocado when they were babies. My mother would have never given that to me as a child in the 70s. So they're looking for very flavorful things, new flavors that are going to be coming to the market. They're always looking for new mashups of things. That's the novelty. And then healthy convenience is a big deal. So when you compare that healthy label with whatever you're offering as a confectionery like a fruit bar or a protein bar. So you get that indulgence with the sweet.

About the Podcast
Great Question: A Manufacturing Podcast offers news and information for the people who make, store and move things and those who manage and maintain the facilities where that work gets done. Manufacturers from chemical producers to automakers to machine shops can listen for critical insights into the technologies, economic conditions and best practices that can influence how to best run facilities to reach operational excellence.