Candymakers Taste Sweet Holiday Sales

SCROOGE may be influencing consumer buying habits this holiday season, but for candymakers, that's good news.

Those in the industry say sales of sweets go up in tough economic times because product prices are low and impulse buying is high.

On top of that, Christmas is the second-largest candy-selling holiday next to Halloween - making this a doubly delicious time for manufacturers.

''Across the board, candy is selling well this season,'' says Michael Polzin, spokesman for Walgreen Company, the national drugstore chain based in Deerfield, Ill.

This year, confectioners are expected to take in $841 million in the United States from the sale of products designed or packaged especially for Christmas, according to the National Confectioners Association in McLean, Va. That is an 11 percent increase over 1994s sales of $755 million. Total sales for all candy sold during the season should be about triple the Christmas-related amount, the NCA estimates.

Contributing to the high sales of candy now, and at other key holidays like Easter, is the ever-rising number of seasonal products.

In the last five years, items available at Christmas, especially chocolate ones, have snowballed. Once such fare came primarily from specialty confectioners, but more recently the three major market leaders - Hershey Foods Corp., Mars Inc., and Nestle Food Company - have seen how good the sales can be and expanded their efforts.

''The bandwagon is getting rather full of people making [holiday candy]'', says Lisbeth Echeandia, editor and publisher of Dallas-based Confectioner magazine.

The big three candymakers say they've found seasonal success not by introducing new candies, but by coloring, molding, or specially packaging their established brands.

Hershey has been wrapping its chocolate Kiss in special foil for the holidays since 1963. The Hershey, Pa., firm's bite-size treats were the Christmas season's No. 1 seller last year. M&Ms, from Mars Inc. in Hackettstown, N.J, weren't colored red and green in full-force until 1992. And just last year, Nestle, based in the US in Glendale, Calif., introduced its round holiday Crunch bar discs.

Nestle will likely reap additional rewards this month with its limited-edition tie-in candy for the blockbuster movie ''Toy Story.'' The film's holiday release allowed Nestle to add red and green to the candy's labels.

Other old brands in new shapes include 3 Musketeers Reindeer and this year's Milky Way Santas, both from Mars, and tree-shaped Reese's peanut-butter candy, a 1991 product from Hershey. And all the manufacturers swathe everything they can in festive colors - from Russell Stover's boxed chocolates to miniature candy bars from the big three.

But the season also has its share of veteran candies - canes and chocolates - made for years by specialty confectioners. For now, these producers are holding their own against the industry's giants, experts say.

''Specialty manufacturers are fighting back strongly,'' says Ms. Echeandia, adding that the market has room for small and large players.

Among the specialty candymakers that are vying for business is R.M. Palmer Company, the biggest of several makers of seasonal chocolates.

''We always welcome the competition,'' says Sherri Brown, a Palmer spokeswoman. ''We've been around since 1948, so what we do, we do well.''

Above the chocolate fray are the No. 1 and 2 candy-cane makers: Bobs Candies Inc., Albany, Ga., and Spangler Candy Company, Bryan, Ohio. Others in the industry are also holding up against the recent barrage. In food stores, Chicago-based Brach & Brock Confections has done well at the holidays with its bagged and individual candies. Its round peppermints, called starlight mints, are its big holiday seller, says Terri Kaminski of Brach.

Ms. Kaminski predicts that it will take a few years before it is clear who will last in seasonal sales and who won't: ''It's only the products that consumers really want that will survive ultimately.''