With the holidays around the corner and the inevitable New Year’s resolutions following soon thereafter, experts say there’s no time like the present for retailers to expand their assortments of natural, organic and Fair Trade sweet treats.
While enhanced health benefits are a key driver, when it comes to purchases people want to support companies whose environmental values match theirs and as industry experts note, consumers are beginning to seek out companies whose products offer additional attributes. “Chocolate is often a very emotional purchase. People want to connect with it on some level and use it to satisfy their desire to have a particular experience, whether it is about taste and ingredients or fulfilling a sense of adventure,” says Erin Gorman, CEO of Divine Chocolate, based in Washington, D.C. “Increasingly, mainstream consumers want to know where their food comes from and the people making it. People want a deeper connection with the products they buy and serve in their homes.”
Gorman considers it a positive sign that Fair Trade product sales have held up in light of the economy. “Fair Trade has a very resonant and contemporary message and as a concept most people identify with it, including mainstream consumers,” she says. “We add another layer to the purchase by telling them about the people who spend their lives growing the cocoa, which in our case is the West African people from Kuapa Kokoo. Our brand was set up as a vehicle for these farmers to tell their story. Yes, we are a Fair Trade company, but the chocolate is really a tool for people to have a great experience not just with the food, but emotionally and spiritually as well.”
While many consumers are making healthier choices, their desire for sweets hasn’t waned, according to Steve Warnert, director of sales and marketing for Santa Rosa, Calif.-based Amy’s Kitchen. “Today there is a growing audience for sweets that not only taste great, but are made from good ingredients,” he says. “There is also an increasing demand for sweets that can be eaten by those with diet restrictions and so we are seeing a rise in sales from gluten-free, dairy-free and reduced sugar desserts.” At the same time, he notes that the onus is on manufacturers and retailers to deliver better quality sweets that taste great.
Known for its broad array of better-for-you products, Amy’s recently introduced its first line of frozen organic loaf cakes in chocolate, orange and lemon poppyseed. According to Warnert, the company’s decision to enter the category was based on numerous requests from consumers and friends who were unhappy with their current choices. “Most frozen cakes have a highly processed texture, appearance and flavor, but Amy’s cakes are made from organic ingredients without the use of fillers, artificial flavors or preservatives and include real ‘food’ ingredients,” he says. “Providing high quality and great flavor in a convenient form seems to have hit the mark with consumers.”
While product options have clearly increased, industry officials say not all retailers are capturing the opportunity and broadening their assortments to include natural and organic desserts and treats. “When I look at the frozen dessert assortments in grocery stores, there is very little difference seen today compared to a decade ago and yet the consumer has changed,” says Paul Levitan , president and CEO of Richmond, Calif.-based Galaxy Desserts. “There are so many options available to retailers today, but many of them are not taking advantage of it and diversifying their assortments. It seems like the freezer is one of the last sections to benefit from the natural and organic sales uptick.”
Doon Wintz, president of Chester, N.J.-based Wholly Wholesome, says there are a number of trends converging that should create opportunities in the category. “During the past decade consumers have continually sought products that fit better into their lifestyles, whether it is features such as gluten-free or those looking to reduce the amount of artificial flavors, colors, additives and preservatives from the foods they consume. At the same time, people are eating more of their meals at home and where dessert is concerned, the average person doesn’t necessarily have the expertise or the time to bake from scratch. This is where better-for-you products that are convenient come into play.”
Products from companies that back the lifestyle, both in the product they produce and the business they operate are of interest to consumers, notes Mark Devencenzi, vice president of sales and marketing for SunRidge Farms based in Pajero, Calif. “Consumers are looking for healthier, sustainable and more ecologically respectful food choices from companies that stand for something. As more organic ingredients have become available and the flavor profiles improved growth hit the double-digit levels across a broad spectrum of organic categories, including candy and snacks,” says Devencenzi.
The company offers more than 40 organic and natural confections, including chocolate, gummy, licorice, natural yogurt and peanut butter treats. The products do not contain artificial flavors, colors, preservatives, chemicals or hydrogenated oils, according to company officials. “We feel this helps us offer a healthier candy and snack option to consumers,” he says, noting that often times these products contain additional value-added benefits as well. “For example, our organic sunny worms, a pectin-based gummy, are enhanced with vitamins A, C, D and E. If you eat eight worms, you get 100% of the recommended daily value of these vitamins.”
Brandt Secunda, founder of Soquel, Calif.-based Shaman Chocolates, says sales help support the company’s “adopted family,” the Huichols of Mexico. Calling his company’s mission “organic chocolates with a cause,” Secunda created Shaman Chocolates to help sustain the Huichols, which is considered the last pre-Columbian tribe in North America still maintaining its traditions and culture.
“With each purchase of Shaman Chocolates you help the Huichols to preserve the ceremonial traditions, rich mythology and magnificent visionary art,” he says.
According to Secunda, consumers are willing to pay extra for quality even in tough economic times, especially when the purchase benefits others. “We created our chocolate bars to not only taste good, but to be good for you,” he says. “For example, our Organic Dark Chocolate bar with Acai, Lemon and orange contains 60% cacao and is rich in antioxidants.”
PATIENCE IS CRITICAL
While there is clearly an opportunity for retailers to build sales in the category, some companies note that the opportunity cannot be fully realized until retailers exert a little patience.
“Retailers often expect this to be a revolution, but evolution is a better way to describe mainstream consumer interest in natural and organic products, sweet treats included,” says Wholly Wholesome’s Wintz. “Patience is a key virtue needed here in order to build sales and sustain growth, especially when it comes to expanding their assortment. It takes time for new items to take root and blossom.”
Others, including officials at SunRidge Farms, say the economy is helping bulk candy sales. “As of late, one segment of our business that really picked up is our bulk candy,” says Devencenzi. “I think people are attracted to the fact that they can control the quantity they buy and that there is less packaging waste, not to mention the cost savings. Granted from the retailer’s perspective it takes more time and energy to do successfully compared to selling a packaged product, but those who sell bulk are really seeing the rewards.”
As ingredients become more readily available, prices of natural desserts are now inline with traditional offerings, observers note. “Pricing is more competitive than most retailers realize. For example, our new all-natural Frosted Star Cookies, vanilla star-shaped cookies dipped either in chocolate, cinnamon, raspberry or peanut butter, are priced along the same lines as other coated cookies,” says Devencenzi, noting that the pricing differential of their organic items is also similar. “Our organic coated nuts, raisins and pretzels are priced about 20% higher than an all-natural version of the same.”
Experts say retailers need to find creative ways to drive sales. Frequently cited as a benchmark retailer, Gorman says Whole Foods is a pioneer of education at the shelf. “They have created a Whole Trade seal that identifies products across every category in their store that are either Fair Trade or have Rainforest Alliance Certification,” she says. “The hang tag is simple, effective, low cost and doesn’t take up a lot of space,” she adds.
Divine Chocolate has also worked with companies to develop wine and chocolate pairings.
Pairing products can also help with sales of natural and organic frozen desserts, according to industry observers. “Amy’s cakes, for example, do very well positioned alongside the other well-known brands,” Warnert says.