How Sweet It Is: The Economics Of Candy
While most industries overall saw marked declines during the recent economic recession, people in the confectionery industry -that's right, candy- say their business was and remains recession proof.
According to recent economic forecasts, Colorado’s economy will continue to grow at a modest pace for the rest of the year. With nearly 35,000 jobs being added to the state's rosters, it appears Colorado is weathering the economic recovery better than many other states. And that's pretty good news for Colorado's candy industry.
Rocket Fizz Soda Pop And Candy Shop
Standing in the stock room of the Rocket Fizz Soda Pop and Candy Shop in Denver's Writer's Square, owner Patrick Evans says his new candy business is truly a family affair.
While helping his three year old son Hunter place price tags on candy boxes, Evans explains he left a lucrative accounting job to try his hand at selling something everybody can sink their teeth into - candy.
And with the store being just over 7 months old, he's been working a lot harder than in his previous suit and tie life.
“For the first few months, I was doing 100 hour weeks. Oh yeah, absolutely. That was just what was necessary. It’s still absolutely more than a full time job. While I may not be on the floor for 40 hours a week, I’m still putting in way more than 40 hours a week. You know, that’s what’s required of an owner."
Evans' store is part of the larger Rocket Fizz franchise, and with over 2,000 different types of candy and 500 rare sodas, he says his shop is all about nostalgia and having fun.
“I mean look around, I mean things sell themselves. We don’t have to sell anything. We just provide a multitude of fantastic options and it sells itself.”
He adds that his employees are not sales people, but are there to create an experience.
The candy does the rest.
The Rocket Fizz Soda Pop and Candy Shop in Writer's Square is currently the number one Rocket Fizz franchise in the country. But it's not the only candy company doing extraordinary business during tough economic times.
According to the research firm Business Insights, the US candy manufacturing industry grew by 5 percent last year and has a total annual revenue of around 20 billion dollars.
Hammond's Candies has also experienced a booming business. And the company has been making sweets in Denver for more than 90 years.
In 2007, right before the economic downturn, Andrew Schuman and his wife Lori left successful jobs in Washington DC to buy Hammond's. Lori says the decision was a bold move.
“The company was having its financial troubles, and Andy worked through all of those things and turned it around, and now it’s pretty profitable. He learned the business from hands on participation in the kitchen and all the different areas. He's been able to use his operations and business degrees to try and turn the company around.”
Candy Survived Tough Economic Times
Lydia Fletcher is the sales coordinator at Hammond's. She says the company has weathered plenty of economic storms including the great depression.
"A lot of companies have gone down, a lot of companies have shut down or closed their doors or gone bankrupt. And we’ve definitely had a lot of growth. And we do see a lot of growth in the next five years."
The company has a workforce of 120 employees and has recently acquired a taffy company as well as diversifying its product line to include selling luxury candy for high end retailers like Williams Sonoma, Dean & Deluca, and Whole Foods.
While famous for generations in Denver, the company is no longer just a local name, but an international company with products being sold in cities like England, Kuwait, Japan, and Israel.
Things Are Sweet Right Now, But They Could Sour
Lori Schuman says for now, the candy industry is stable. However, things may not be so sweet in the coming months.
“Currently candy is one area which hasn’t suffered as much, however sugar prices have increased so much that’s it’s caused our candy to be increased in price.”
According to the trade group National Confectioners Association, current US sugar policies are limiting the supply of refined sugar available to domestic candy makers forcing them to pay more for sugar and increase their prices.
A bipartisan amendment is being debated this week for inclusion in the House version of the 2012 farm bill. It would allow additional quotas on import sugar to help put domestic sugar makers on a level playing field with foreign producers.
And while there may always be a demand for candy, concerns that America’s sweet tooth is contributing to an increase in obesity rates may also chip away at that stability.
Is Candy Recession Proof?
Despite the concern over sugar prices, business is going quite well back at Rocket Fizz. But Patrick Evans is not too keen on calling his new found craft recession proof.
“That’s a term that can really be loosely used. And it’s also rather finite too. if you say something that’s recession proof. Nothing is recession proof.”
For now, Evans says he’s more concerned with his daily bottom line, and making sure all his customers are receiving a top notch Rocket Fizz experience.