When Economy Sours, Tootsie Rolls Soothe Souls
Raymond Schneider politely elbowed his way through crowds of customers as he made for the bulk candy bins at Dylan’s Candy Bar across from Bloomingdale’s in Manhattan. Since he was laid off in December, Mr. Schneider, a 33-year-old interior designer, says he has become a “gummy junkie,” stocking up on sweets every time he shops for groceries.
“Sugar is comforting,” he said as he scooped Red Licorice Scottie Dogs into a plastic bag. “There’s nothing more stressful than growing financial insecurity everywhere.”
The recession seems to have a sweet tooth. As unemployment has risen and 401(k)’s have shrunk, Americans, particularly adults, have been consuming growing volumes of candy, from Mary Janes and Tootsie Rolls to Gummy Bears and cheap chocolates, say candy makers, store owners and industry experts.
Theories vary on exactly why. For many, sugar lifts spirits dragged low by the languishing economy. For others, candy also provides a nostalgic reminder of better times. And not insignificantly, it is relatively cheap.
“People may indulge themselves a little bit more when times are tough,” said Jack P. Russo, an analyst with the Edward Jones retail brokerage in St. Louis. “These are low-cost items that people can afford pretty easily.”
At Candyality, a store in the Lakeview neighborhood of Chicago, business has jumped by nearly 80 percent compared with this time last year, and the owner, Terese McDonald, said she was struggling to keep up with the demand for Bit-O-Honeys, Swedish Fish and Sour Balls.
At the Candy Store in San Francisco, the owner, Diane Campbell, has tripled her orders for nostalgic candies like Necco Wafers and Mallo Cups in recent months. Many of her customers tell her that even though they are living on less, they’re setting aside cash for candy.
“They put candy in their actual budget,” she said.
Many big candy makers are reporting rising sales and surprising profits even as manufacturers of other products are struggling to stay afloat. Cadbury reported a 30 percent rise in profits for 2008 while Nestle’s profits grew by 10.9 percent, according to public filings. Hershey, which struggled for much of 2008, saw profits jump by 8.5 percent in the fourth quarter.
Lindt & Sprüngli, which specializes in more expensive products like Lindt and Ghirardelli chocolate, announced that even though it expects to close some of its luxury retail stores this year, it also expects chocolate sales to remain strong through mainstream retailers like Wal-Mart and Target.
“All is well in candy land,” said Jamie Hallman, owner of the Sweetdish candy store in the Marina district of San Francisco.
In Manhattan, at the sweet-smelling confines of Economy Candy on the Lower East Side, the owner, Jerry Cohen, said he increased his orders by 10 percent in January and February to keep up with demand for candies like Sugar Daddies and Sour Razzles. On a recent Sunday, Mr. Cohen had about a dozen workers in the narrow store trying to keep the candy tables and penny candy bins restocked as shoppers — the vast majority of them adults — grabbed candy bars and dug their hands into bins of Tootsie Rolls and Bit-O-Honeys.
“We have been wiping out of inventory,” he said.
Mr. Cohen’s son, Mitchell, 23, who works long hours as a Wall Street investment banker, helps out at the store on some Sundays because, he said, he finds the mood uplifting. He noted that his Wall Street co-workers have also been eating more candy: The 10-pound candy bags he puts on his desk are being devoured in one week instead of the usual two.
“That’s why I like going to the store on Sundays,” Mitchell Cohen said. “Everyone is happy.”
There may be historic precedent to the recessionary strength of the candy business. During the 1930s, candy companies thrived, introducing an array of confections that remain popular today. Snickers started in 1930. Tootsie Pops appeared in 1931. Mars bars with almonds and Three Musketeers bars followed in 1932.
Hershey, the dominant candy brand during the Depression, remained profitable enough through the 1930s for the company to finance its own work program for the unemployed, said Pamela Whitenack, Hershey’s community archives director.
“Candy companies are relatively recession-proof,” said Peter Liebhold, chairman of the Smithsonian Institution’s work and industry division. “During the Great Depression, candy companies stayed in business.”
Candy seems to conjure memories of times before bank collapses and government bailouts. Jackie Hague, vice president of marketing for the New England Confectionery Company in Revere, Mass., which makes Necco wafers and other candies, said the company has received an unusual number of letters, e-mail messages and telephone calls from customers saying their candies had helped them “flash back to childhood.”
Indeed, store owners and manufacturers find that the hottest-selling candies these days are cheaper, old-fashioned ones. In addition to strong sales of Necco Wafers and Mary Janes, the New England Confectionery Company said sales of Sweetheart candies jumped 20 percent at Valentine’s Day. Eastern Sales and Marketing, a major candy representative for manufacturers, has noticed “double digit growth” for Gummy Bears, Violet Gum and Jelly Bellies, according to John Anastasi, the company’s senior vice president of the confectionery business unit.
Not everyone in the industry is benefiting from tighter wallets. Edgar Roesch, a food analyst with Soleil Securities, an investment research firm in New York, predicts that the recession may present more opportunities for more economical, mass-market brands like Hershey than for, say, gourmet truffles.
Until the fourth quarter of last year, he said, “Things like Hershey Kisses were losing out to higher-end brands.” But this year, that trend has reversed.
Increased candy consumption may have already taken a toll on the waistlines of many New Yorkers.
Liz Josefsberg, who runs four Weight Watchers meetings a week in Manhattan, said talk of stress eating involving candy was taking up an increasing percentage of her meetings. “I’m hearing a lot about Skittles and Mary Janes,” she said.
Since Piper Gray, 23, arrived in Manhattan from Memphis in September, she has lived on a tiny salary from a journalism internship and tries to remain optimistic about eventually landing permanent work, even though prospects look discouraging.
Beside two friends at Economy Candy on a recent Sunday afternoon, she sounded cheerful as she munched on mini Smooth ’N Melty nonpareils, joked about her addiction to Creme Eggs and scoffed at the merits of Swedish Fish. Candy has become her affordable escape.
“Apples and oatmeal only go so far,” she wrote later in an e-mail message. “It’s so tempting to pick up an 88-cent pack of Skittles as a little pick-me-up. So I won’t feel so deprived.”
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