Economy sour, gum sales sweet
Gum, originally uploaded by Unique View.
An article early this week in the Athens Banner-Herald analyzed the health of confectionery sales amidst a weak economy.
While the report from the Bureau of Labor Statistics noted that candy and chewing gum prices have grown by 6 percent over the last year, sales have increased 3.9 percent during a similar period of time, according to the National Confectioners Association (at AndrewsGumWorld, we like to think that the NCA is a second cousin, perhaps, of the International Chewing Gum Association, which you can find on our Blogroll).
In fact, if you want to go especially geeky on tracking chewing gum sales (as you might guess we do at AndrewsGumWorld), you can go to the NCA site and download PowerPoint presentations from their 2008 State of the Industry conference held earlier this year, including the especially informative “The Portable Breath Freshening and Gum Juggernaut” presentation by Mike Wege of the Hershey Corporation (quick insight from slide #2: chewing gum sales have grown 6.9 percent between 2004 and 2007).
But as for candy and chewing gum sales during the current economic downturn, the Banner-Herald article talked to a number of experts who weighed in on the counterintuitive trends for the sweet sales trends:
The candy industry generally sees sales rise by 1 percent to 3 percent each year, representing “a slow but steady growth,” which economic downturns do not strongly hamper, said Susan Fussell, vice president of communications for the National Confectioners Association.”We don’t very often see huge spikes or huge declines in candy sales,” Fussell said.
One explanation for the trend is candy, while considered a luxury item, has existed throughout its history as a relatively cheap luxury, Fussell said.
“So, it’s not necessarily something that people cut out of their budget, because it’s so affordable,” Fussell said. “And I think that’s one of the big reasons (for the stability of sales).”
That stability and Americans’ love of chocolate has continued, despite the economic conditions that begs the question of whether the country is in a recession.
“Practically, we are (in a recession); from a practical point of view,” said Doug Bachtel, a professor of Housing and Consumer Economics at the University of Georgia. “Because of prices, a lot of people are hurting.”
When a recession - at least three consecutive months of declines in several major economic indicators - occurs, people generally cut back on recreational activities and unnecessary purchases, instead spending their earnings on basic commodities like food and clothing. One would think consumers would kick their candy habits.
“See, but that’s where the (relatively low) price comes in,” Bachtel said about candy, which he considers as typically an add-on, spur-of-the-moment buy.