The recession-just in case you don`t believe it`s over, as Uncle Sam`s economists have been saying-has even slowed a category thought to be immune, the sweet tooth.
Candy purchases, often triggered by impulse, have been adversely affected as people really started counting their pennies.
Less than 14 months ago, there was an industrywide 12.5 percent price increase on candy bars, a move led by heavyweights M&M/Mars and Hershey. About the same time, bagged candy prices also increased by 3 or 4 percent.
The results for 1991: candy industry sales rose about 5 percent because of the price bump, but tonnage was down. Chalk up a victory for balky consumers, even candy freaks.
In a bold move, M&M/Mars Monday said it was cutting back prices on its
”family packs” while also disclosing a nickel-a-bar wrapper refund on its bars, good on its candies and ice cream.
The Hackettstown, N.J.-based firm shortly will announce a ”buy one, get one free” offer for its candy bars, which include such top brands as Snickers, 3 Musketeers and Milky Way.
M&M/Mars is dropping prices on its bagged candy line by 6 percent for its 7.2 ounce package and by 11.1 percent for a 2-pounder. The price reduction is 10.2 percent for the 1-pound package, the most popular seller.
This action by M&M/Mars appears to have caught competitors by surprise. After all, Hershey only recently bumped up the wholesale price by 5 percent on its bagged line for such goodies as Kisses and Miniatures.
Hershey and other candy manufacturers contacted by this column wouldn`t say how they might respond to M&M/Mars` three-pronged attack, but presumably they`ll also have some sort of a cutback or incentive for consumers to make purchases.
One-pound bagged candies have been creeping close to and topping $3 at retail. Watch for a reduction to somewhere in the $2.49 to $2.99 range.
M&M Mars said its move was based on providing better value for customers. While on the surface this may be an admirable corporate policy statement, the reality is that business hasn`t been that good for M&M/Mars despite its prominence in the category.
The wrapper-refund offer and the upcoming ”buy one and get one free”
offer for its candy bars is certain to put a good deal of pressure on the entire candy business.
Candy bars are selling for upwards of 45 cents, depending on the retailing channel. Don`t look for that price to be lowered to 40 cents. And do you remember when the standard price for candy bars was only 25 cents in 1978 and a mere dime in 1969?
Needham signs on Berlin
Only a few months ago, publicly held Omnicom Group gobbled up Goodby, Berlin & Silverstein, the prominent San Francisco agency that made its mark with its creative wizardry. Now, Andy Berlin, that firm`s co-chairman and CEO, is moving over to Omnicom`s DDB Needham unit as president of its New York office. Because he`s only 42, and depending on what he achieves at DDB Needham, Berlin may well be in line for a move to the top at some point in the future. Berlin`s credentials include new-business prowess; he`ll get an opportunity to further build a New York office with $575 million in billing, ranking as No. 2 in the entire DDB Needham Worldwide system, topped only by DDB Needham Chicago at $625 million. Berlin grew up in Philadelphia, but he earned his advertising credits on the West Coast. ”Andy`s always wanted to have a presence in New York, and now he`s got it,” says an insider. As boss of DDB Needham New York, Berlin succeeds Peter Falcone, 56, who along with two other executives was named vice chairman of the agency that in 1991 topped $5 billion in billing for the first time. Falcone will remain in New York; so, too, will John Bradstock, 57, and Jerry Germain, 49, both also named vice chairmen. Bradstock has overseas responsibilities; Germain is executive VP and financial officer, taking on additional responsibilities in human resources and administration. Goodby, Berlin & Silverstein will remain that agency`s name even with Berlin moving to Needham. After all, it`s in the family.
– Pittsburgh Food & Beverage Inc., which last year acquired the Clark, Black Cow and Slo Poke brands, now has the Wayne Bun Bar in its lineup, buying it from Storck, a German firm.
On the move: Mary Babich promoted to VP-communications at the American Hospital Association. . . . Sue Canepa joined Manning, Selvage & Lee`s Chicago office as a VP. . . . Erin Clark, a VP at J. Walter Thompson USA Chicago, promoted to an account director.
Strictly Personal: Birthday greetings to Ward Quaal, Amy Felt, Graham Quaal and Jan Berghoff.
Rax Restaurants, a 385-unit fast-food chain based in Columbus, Ohio, assigned its $5 million to $6 million advertising account to Manhattan-based Deutsch Inc., whose clients include E. & J. Gallo winery, Pitney-Bowes, furniture maker IKEA and U.S. News & World Report. Rax`s new marketing boss is Bill Welter, a former Wendy`s executive, who once worked at DDB Needham Chicago.
