As new parts of the global market warm up, the U.S. candy industry's profits get sweeter by the day. According to the National Confectioners Association (NCA), however, only 5 percent of U.S. manufacturers (more than 90 percent of which are small and midsized businesses) are selling internationally, which means there's still room for would-be Willie Wonkas in this $21 billion industry.
"Everybody likes candy," says James Johnson, the NCA's director of international marketing services. "No matter what the culture is, there's a good feeling attached to it."
But who has the biggest sweet tooth? Per capita, the NCA reports it's Switzerland, followed by Austria and Germany. But don't start dreaming in euros: Europe is up to its eyeballs in chocolate. With the Asian market still sour, Latin America is emerging as the next hot spot for U.S. confections. The NCA, in fact, plans to conduct trade missions to Argentina, Brazil and Chile this fall. "More and more people there have discretionary income," Johnson says, "and they're looking to purchase feel-good products."
These and many other countries view sweets as prestige products, opening the export door for small U.S. candy manufacturers. Philadelphia's Goldenberg Candy Co. and Adams & Brooks Inc. in Los Angeles are two such businesses. While neither make public their annual revenues, both say they've boosted sales by 5 to 10 percent by exporting their sweets.
"Our export sales are growing, and they continue to offer great opportunities," says David Goldenberg, 44, president of the family candy business that bears his last name. "It's not the biggest part of what we do, but it's important."
Unfortunately, no secret formula exists for getting your candy product on foreign shelves. "Just because [your product] is American doesn't mean people will stock it," warns Tempe Brooks, export sales administrator for the 68-year-old Adams & Brooks. And when it comes to food products, there's no end to the hurdles you have to clear. Among them:
- Labeling. Every country has its own requirements. For example, Canada requires all packages to have information in both French and English. Brooks tackles this problem by creating her own labels on a PC.
- Weight measurements. Most of the world, of course, is on the metric system, so Brooks uses metric weights on all international orders and labels.
- Pricing. While some U.S. manufacturers feel the strong dollar requires them to slash prices, Johnson says many small companies find international success by marketing their candy as a premium product--and selling it at premium prices. "People are willing to pay for quality," says Johnson.
Overcoming these obstacles may not be simple, but for companies confident their products have a shot in the international market, it's the first step to sweet success.
Christopher D. Lancette is a journalist in Atlanta who covers international topics for Hispanic Business and other publications.