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Candy brands give consumers more ways to ‘trade up’

Mars’ recently introduced M&M Premiums line allows consumers to “trade up” within a familiar brand.

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There’s no denying it—frugal is the new trend. Still, retailers continue to ask themselves just how much consumers are willing to give up to save a few dollars. And does it include premium chocolate?

Premium chocolate has been the star of the candy aisle for some time. Over the five-year period from 2003 to 2007, premium chocolate’s share of the total chocolate market has more than doubled, from 7% to 18%. Curtis Vreeland, senior analyst for Packaged Facts, predicted that share to reach 25% by 2012, despite sales values boosted by commodities price hikes and recessionary slippage in demand.

A recent report from Packaged Facts revealed that sales in the premium chocolate segment outpaced overall category sales in 2007, making it the engine that drives the chocolate category. Premium chocolate sales grew nearly 5% for the 52 weeks ended Oct. 5, 2008, according to Information Resources Inc.

Recently, more action has been coming from manufacturers of mass brands who have been introducing their own “trade-up” brands. These not-quite-premium brands allow consumers to trade up within a familiar brand with a product that offers something above the traditional product.

Mars recently introduced M&M Premiums, candies with shimmering finishes in exotic flavors that are merchandised in upright containers and retail for more than $3.

“This new product captures the fashion, vibrancy and indulgence of premiumization, yet it retains the sense of colorful fun and unpretentiousness that the M&M’s brand has always stood for,” said Ryan Bowling, a spokesman for Mars Snackfood US.

Bowling said Mars also has added a number of flavors and formats to its Dove brand, which is the top-selling premium chocolate brand in the United States. Dove Desserts, in bananas foster and tiramisu, were introduced in June. In the premium tablet collection, six new flavors were added, and packaging was changed to feature three individually wrapped pieces to “address consumers’ desires for portion control and sharability,” Bowling said.

On the heels of its Cacao Reserve and Starbucks brands, Hershey launched Bliss, individually wrapped, bite-sized candies in three flavors, positioned as an everyday indulgence. To target female chocolate lovers, the company launched the product at private parties through House Party, a marketing company known for using viral marketing techniques to create word-of-mouth buzz.

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