1

BuYi Kim Maria Jose Landivar

Bridget Nelson Michal Shek

Kristina Shigaeva Siriwan Siriwangsanti

October 22, 2012

Secondary Research Report

2

Executive Summary

The main objective of this research was to understand the disconnection between the way

that Wiley Wallaby is currently marketing themselves and their ideal position as a gourmet and

premium product.

There is an expected 2.8% increase in consumers spending in the next five years, which

possibly means that they will be gaining back their financial confidence and start buying more

luxury products, such as gourmet foods. The main target audience of the gourmet food product is

people under the age of 35, with slight higher incomes, and mainly women. The average

demographic of licorice is late 20s, early 30s with women making most of the purchases.

Although the gourmet chocolate sector is doing well, non-chocolate confectionery is not

predicted to have the same steady growth. Gourmet non-chocolate confectionery often does not

fare well in comparison to conventionally made products. But there is currently room for the

growth of “affordable premium” or “entry-level premium”, which are items that promote good

quality but are still perceived as straddling the value side of things.

Wiley Wallaby’s primary competitors, on the premium side, include Natural Vine

licorice, Jelly Belly Beans, Godiva Chocolatier, and Lindtt & Sprungli. Its secondary competitors

include other licorice brands such as Hershey’s Twizzlers, Rips Whips, and private label sugar

confectionary.

Based on the secondary research presented below, we find Wiley Wallaby as suffering

from disconnection among the brand current image and their deal image. While some elements

of Wiley Wallaby coincide with gourmet definition, such as packaging, price, and higher quality

ingredients, the marketing communication and distribution of Wiley Wallaby does not coincide

3

with their gourmet image. Therefore, we have the following four recommendations for Wiley

Wallaby:

1. The brand needs to position itself as an “affordable premium” product.

2. They should expand them distribution channels to places such as TJ Maxx, Marshalls and

Home Goods, where other “affordable premium” products are sold.

3. They should focus on word-of-mouth promotions that will increase brand awareness through

an increased presence in social media and events promoting the product.

4. There needs to be additional primary research done that will address how Wiley Wallaby is

perceived by consumers through focus groups and surveys.

Introduction

This report will attempt to address the problem that Wiley Wallaby by Kenny’s Candy is

having in terms of their positioning as gourmet Australian-style Licorice. This report will look

into the gourmet confectionery industry including the non-chocolate and chocolate sectors, as

well to the non-gourmet confectionery industry. It will look into specific in terms of trends,

target market, packaging, and what the competitors are currently doing. The main focus of this

report is to address the way that Wiley Wallaby is currently marketing themselves and if it this

coincides with the way that gourmet products are marketed. Ultimately, this report will conclude

whether or not Wiley Wallaby should enter the gourmet/premium sector of the market or if they

should market more towards the conventional candy sector or somewhere in between.

1. Gourmet Confectionery industry trends

1.1 Gourmet Confectionery- Industry Growth

Predicted income growth over the period of 2011-2016 is expected to drive

demand for more expensive confectionery and gourmet products (1). According to

4

gourmet retailer reports, gourmet stores saw more customers in 2011, a 3.9 percent

increase over 2010 (7). In addition, there is an expected 2.8% increase in consumers

spending in the next five years, which possibly mean that they will be gaining back their

financial confidence and start buying more luxury products, such as gourmet foods. The

average transaction size on gourmet retail shops for the first half of 2012 increased by 3.6

percent in comparison to 2011. This information is implying that Americans are slowly

returning to their more expensive eating habits, and industry sales are expected rise as a

result (3).

Besides grow in income and spending, an additional factor driving the rise of the

gourmet industry is the fact more US consumers are seeking untreated natural ingredients

and reduced fat foods, and are willing to pay premium prices for organic products and

gourmet labels, which are perceived as lower fat (1). Vice president of marketing for

Ghirardelli says that “people are looking for foods that are more innovative. As people

age, they’re worried about calories, so the idea of eating less or better resonates with

them”. Many candy companies are taking part in this trend for gourmet. According to the

Candy Manufacturing Quarterly Update from 2011, a growing trend in the industry is

products that are focused on health. Candy that has lower fat, such as licorice, has been

doing well (17).

1.2 Gourmet chocolate trends

One of the main players in the confectionery gourmet industry is gourmet

chocolate. When analyzing trends in this category, we should refer to gourmet chocolate

consumer’s preferences and market trends as well.

5

The demand for the entire category of gourmet candy is growing as can be

demonstrated by the growth in the premium chocolate category jumping from 13 percent

of the total market in 2002, to nearly 17 percent in 2006 (17). Nestle spokesperson says

that “we do see an increase in consumer interest in premium chocolate” (19).

Unlike premium and gourmet chocolate, non-chocolate confectionery does not have the

same enthusiastic growth following with a steady growth. Gourmet non-chocolate

confectionery often does not fare well in comparison to conventionally made products.

The higher price of the products compare to the category is one of the explanations for

this segment of the market has not been doing particularly well and chances for growth

are dim (10).

The consumers of chocolate gourmet confectionery tend to be very discerning of

its quality, regardless to its color and texture. A higher quality product is usually a

function of superior ingredients, which determine the final product price, and consumers

willing to pay premium for it (2). Taste is an additional important factor distinguishing

premium chocolate among people that buy chocolate. Almost 80% say that higher-quality

chocolate tastes better than non-premium chocolate. Seven out of ten of the people that

buy premium chocolate believe that it is healthier than regular which could be due to the

fact that lower-quality chocolate confectionery can contain artificial flavors, fillers, or

other additives (22).

An additional characteristic of the chocolate gourmet industry is that it is

dominated by well-established brands, such as Mars, Nestle, Hershey and Godiva that

have been in existence for nearly a century. However, there are a number of gourmet

chocolatiers that have not been in the industry for long, that appeal specifically to the

6

premium end of the market and are able to charge an extra premium for their products

(2).

2. Gourmet products

2.1 Consumer behavior

2.11 Target market

Young adults ages 25–34 are by far the most likely to be foodies;

specifically, ages 18–24 (9). People under the age of 35 are more likely than

others to be interested in premium/gourmet products, especially products that are

fair trade, organic, or imported (22). Consumers that come from slightly higher-

income households and make $50K-99.9K per year, are the most likely to prefer

premium, gourmet, organic, and imported products (22). In terms of gender,

women are more likely to notice a greater distinction between premium and non-

premium chocolate. This finding could be extended to other non-chocolate

confectionery. Women identify premium products as a personal luxury and as

something that offers a greater flavor variety than non-premium products. This

points to the value in highlighting such attributes in outreach to this gender (22).

According to Gourmet, Specialty and Premium Foods, Beverages and

Consumer Trends in the U.S., 8th Edition, approximately 20% of consumers seek

out gourmet products and 30% of consumers are willing to pay more for gourmet

food products according to the report. 20% of US adults seeks out gourmet

products when food shopping. This is slightly higher than the 17.5% of

respondents to the 2009 survey that was conducted. 5% of US adults strongly

agree with the statement, “When food shopping, I seek out gourmet products.”

7

Another 22.0% are noncommittal about the statement and 57.0% somewhat (26%)

or strongly (31%) disagree. (18)

2.12 Influencing purchase factors

The most influential factors designing the consumers judgment of a product as

gourmet, is based both on price, and packaging as the primary factors. Gourmet

consumers also indicated that the higher the price, the more quality they expected

the products to be. As the research implies, successful packaging and pricing

strategy can induce consumers to try the product for the first time, but only good

quality will get them to purchase the product again (5).

2.13 Gift giving

Gourmet candy is an item that is often given as a gift, and this sector is

growing: U.S. food gifting sales to reach $11.15 billion in 2012, up 2.5% from

2011 (16).

2.2 Packaging

Among gourmet consumers, when brand image in unknown and they have not

experienced the brand before, users rely mostly on the product packaging as an

influencing decision maker. Packaging, if appealing, is extremely important in terms of

portraying the gourmet image and inviting sampling. Research has shown that gourmet

product consumers refer to gourmet packaging as “authentic”, “fun”, and “smaller” (5).

Consumers are looking for authenticity in the packaging of the gourmet candy.

For candy, one of the key factors is confections made with real fruit juice instead of

artificial fruit flavors. The amount of “real” vs. “artificial” is being emphasized on labels.

8

Some manufacturers have found that “fun and creativity” in packaging is a

winning ticket which can give marketers and retailers a reason to create secondary

displays in other parts of the store and encourage the opportunity for additional impulse

sales. For example, the candy brand, Galerie, made their candy packaging into a

necklace-making kit. The candy “beads” come in 5.1oz packages with enough beads to

make 10 necklaces (3). This opens up another merchandising possibility. Besides the

candy section, these packages would be appropriate in the party favor and craft areas.

(See Appendix for Images)

In terms of “smaller” packaging, sugar confectionery has market trends that

candy is packaged in measured serving-sized packs. For instance, Sunkist brand released

Fruit Gummies 80 Calorie Packs which are said to be better for you, as they contain 40%

less sugar than the averaged leading gummy brands (3).

The gourmet candy sector still has room for “affordable premium” or “entry-level

premium” which is items that promote good quality but that are still perceived as

straddling the value side of things. This may be reflected in the packaging of the product

which would be no-frills i.e., store brand appearance but with a higher-quality product

inside (21).

2.21 Label Claims

When gourmet candy packages are designed, certain words are considered as key

in sugar confectionery market. Hot label claims now on new products are low/no/reduced

allergen; gluten free; no additives/preservatives; real; and all natural (1). Gourmet items

do well when they highlight flavor, craftsmanship, purity, and indulgence in their

packaging (21).

9

3. Gourmet Confectionery distribution and retailers

3.1 Gourmet products retail trends

According to the National Association for the Specialty Food Trade (NASFT),

supermarkets and traditional grocers are attempting to maintain sales and revenue by

catering to an even larger market by diversifying into specialty and gourmet foods (3).

Marketing Institute found that among 77 companies representing 4,208 stores; about two-

thirds have diversified into a gourmet and specialty food forma (3).

3.2 Distribution of Gourmet Confectionery

Some premium producers chose to stock their products only in gourmet or

specialty chocolate stores and cafes, in order to maintain their brand image of an

expensive or exclusive product (2). Other premium confectionery products, distribute and

sell in specialty food stores, which sell a variety of gourmet food, including nuts, ice

cream, spices, tea, coffee, bakery goods, health foods and confectionery products (3).

Distribution has a major influence on the presence of gourmet food in a desired

location. An example highlighting this factor is the fact Hershey Co, a strong competitor

in the gourmet candy industry, which has entered into an alliance with The Ferrero Group

in North America through a joint warehousing, transportation and distribution initiative.

This alliance is part of Hershey's ongoing efforts to improve supply chain efficiency and

enhance competitiveness, what might redefine the role of the distribution game in the

gourmet candy category (6).

4. Gourmet candy promotions

Gourmet candy and private label crackers are usually promoted only once or twice a year

(8). Since there is room in the market for “affordable premium” or “entry-level premium”, these

10

are usually promoted in a subtle way using word of mouth and media coverage to inform

customers about the product. Such an under-the-radar approach to marketing would also appeal

to the target which are under 35 and who like to appear in the know about the latest trends, rather

than to appear as followers of big business (21).

5. Gourmet candy pricing

As reported in the chocolate gourmet industry, higher quality product is usually a

function of superior ingredients, which determine the final product price, and consumers willing

to pay premium for it (2). As research imply, successful packaging and pricing strategy can

induce consumers to try the product for the first time (5). Although consumers relate higher price

with quality, the higher price of gourmet non chocolate candy products compare to the rest of the

category, is one of the explanations for this segment of the market has not been doing

particularly well and chances for growth are dim (10) .

6. Current Licorice Consumers

In searching for current licorice consumers, a question was asked by researchers, “When

you crave something sweet, which of the following best describes the food you usually choose to

eat?” The response showed that only twenty-three percent of consumers choose non-chocolate

candy when craving sweets. The age range was 18-24 of the most common consumers to choose

candy (10). These results were also supported by other research for current licorice consumers.

According to Mike MacDonald, the senior vice-president of marketing and sales for

American Licorice Co., “Licorice is a multi-generational stable category. The average

demographic is probably late 20s, early 30s. It skews to adults, but moms also feel good about

allowing their kids to eat this type of candy that is low-fat or fat-free” (20). In the Fall 2011

11

Product Candy/Sweet/Snacks results the highest consumers of licorice are women ages 18-24

and 18-49. This research does not show whether they are eating all the licorice, it shows that they

are the largest purchasers of the product. In addition to women purchasing the licorice, the

Northeast region of the United States has the highest consumption rate of licorice.

As Licorice accounts for only 10% of the sugar confectionery market, the research

findings in this section will be drawn from non-confectionery and chewy candy research studies

that Licorice is categorized in (10). According to NPD Group Snack Track in 2012, adults

accounts for 65% of candy consumption. Thirty-three percents of them is 18-44 of age and their

consumption rate increased 22% over the last five years from 2006-2010.

Chewy candy per capita showed that the age group of 24-44 promises the largest growth

and increases in consumption.

12

Adults are primary target for Gummy candy and Licorice. Licorice represents 8% of

adult’s chewy candy consumption.

13

7. Product

An important trend in global confectionery is a demand for a functional product that

contains sugar-free and natural ingredients like herbal ingredients. In addition, new items, line

extension, and product innovations such as new flavors, colors, and shapes, especially from the

well-accepted brands, are likely to attract impulse buyers. (23). More important, products that

offer great taste, value, and positive experiences tend to ensure longevity to both the products

and the brands.

Specifically to Licorice category, there has been a trend towards new flavor

combinations. For example, Kooka-burra, a company that is similar in image to Wiley Wallaby,

has come out with a new multi-flavored product called Shooters. These are bite-size licorice

treats that are shaped like the cylinder of a revolver and have different flavors such as lemon,

green apple, cherry, blue raspberry and cola. (8) Among some of the most popular new flavors of

licorice, according to suppliers, are watermelon, blue raspberry, sour apple, pina colada, cherry ,

green apple, root beer, chocolate, strawberry, and orange. (9).

In June of 2011, The Detroit New Taste Panel conducted a blind taste test of an array of

black licorice. They evaluated the taste, the texture, and the overall appearance of the licorice on

a scale of 1 (poor) to 5 (excellent). The taste testers tried black licorice made by Wiley Wallaby,

Panda Soft Black Licorice, Hlava Original Finnish Sweet Black Licorice, Australia’s Darrell Lea

Black Licorice, Gimbal’s Scotty-shaped Scottish Licorice, and Newman’s Own Organics Black

Licorice. Wiley Wallaby came out on top with an overall score of 4.4. The following comment

was given on the licorice: “Best of the bunch! Very nice. Good chew and a nice flavor. Shiny

rope twists that are very thick. Not sticky. Soft homemade taste. Strong flavor” (7).

14

8. Price

In spite of a recession in 2008, Licorice sales increased 32.3% during 2005-2010. This

was assumed to be caused by consumers traded down from more expensive confectionery (10).

However, another report from First Research suggested that price isn’t a factor in consumer

decisions since most candies are low cost and relative the same. (23) Furthermore, consumers

today still have a passion for candy. The economy is unlikely to dampen their ability to buy

something sweet for which purposes, be it for themselves or family or guests, and etc. Instead,

they just need to feel the value they get from the purchase. (24)

9. Promotions

According to the statistics from NCA Sweet Insights, it is found that:

● Approximately 26 % of chewy candy purchases offered savings. Three percent of the

saving involved coupons. (25)

● Top occasions when children desire for candy are: Halloween, Christmas, Easter, and

Valentine’s Day. (23)

● Stocking the products on shelves for seasonal holidays early can help boost retailers’

sales volume as it is convenient and appreciated for shoppers, especially female shoppers

and on-the-go shoppers, to accomplish to do list. Manufacturers and retailers often stock

the products almost immediately after one holidays end and often months before the next

holidays begin. (23)

10. Place

Purchase for all consumption usually occurred at supermarket and discount store:

whereas purchase for relatively immediate consumption (within one hour) mostly occurred at

convenient stores. (25)

11. Purchase pattern (25)

15

● Thirty-nine percent of non-chocolate buying trips are based on special purpose,

comparing to Stock up (26%), Fill in (19%), Quick Trip (16%)

● When candy purchase is part of a shopping trip, the overall basket costs $20 higher.

(Vital Consumer insights)

● Sixty-two percent of consumers purchased chewy candy: 43% made purchase over a year

period.

● On average, adults purchase chewy candy five times a year. A chocolate category is 12

times a year.

● Adults are gatekeepers for candy consumption for children aged not over 18.

● Family with four or more members makes more purchase.

12. Consumption (25)

● Sixty-four percent of consumers consumed chewy candy at home.

● Most consumption occurs during evening and late night.

● Chewy candy consumption mostly occurred during watching TV and other relaxing

activities. Party or special occasion accounts for very little for consumption time.

● Key motivations to chewy consumption are taste, sweetness, and fun.

● According to Candy & Snack Today report, another motivation for chewy candy

consumption of consumers is yearn for nostalgic feelings of their childhood favorite

candies. It is a comfort feeling that helps alleviate consumers from a long day pressure

from works. Moreover, candy is more affordable relaxing moment compared to a sip of

wine, a spa, or fancy dinner.

● Candy is still part of consumer lifestyle in spite of an increase in health concerned; only

one-third of the consumers choose to reduce sugar to control weights. Moreover, the

16

studies showed that the more adults eat candy, the more they better perceive their

weights.

○ Top five weight management among non-chocolate consumers are:

1. Eat more fruits and vegetables (53%)

2. Eat smaller portion (49%)

3. Regular exercise (44%)

4. Increase water consumption (39%)

5. Eat less sugar and sweets (35%)

13. Market Competitors

13.1 Primary Competitors

13.1.1 American Licorice – Red Vine licorice

American Licorice’s American Natural Vines, black and strawberry

flavored licorice twists, were introduced in November 2010. The company

positioned its brand as a natural licorice, made from all-natural flavorings and

colors. The packaging of the product implies on its upscale premium brand image

(10). When speaking about this new product, the consumer communications

manager from American Licorice Company, Michael Kelly, said that “we

definitely think there’s a place for Red Vines, but we want to have an alternative”.

He said that this product, in comparison to their regular licorice, is more like a

fruit chew. Instead of having artificial flavoring, they actually use real strawberry

extract to get a stronger taste of natural strawberry (11).

13.1.2 Jelly Belly Beans

17

Jelly Belly beans were first produced in 1976 by David Klein’s original

idea The first eight Jelly Belly flavors that were introduced were Cherry, Lemon,

Cream Soda, Tangerine, Green Apple, Root Beer, Grape and Licorice (13). Jelly

Belly’s products are distinguished not only by their sophisticated flavors, but also

because of its gourmet positioning in the market. The company’s tagline, “The

original gourmet jelly bean,” sums up the company’s success since the products

go beyond the standard jellybean flavors (13). One of its most successful

campaigns was a TV spot, for the company’s buttered popcorn jelly bean, that

shows a typical movie theatre box of popcorn which has popping kernels

transforming into jelly beans (13). Today, Jelly Belly is the world's #1 gourmet

jelly bean, the bean of choice for all those with the most discerning taste, and

made in 50 official flavors and a dizzying array of new flavors, special collections

and wacky flavors (13).

13.1.3 Godiva Chocolatier

Godiva Chocolatier is a manufacturer of premium chocolates and related

products. They own and operate more than 600 retail boutiques and specialty

shops in the United States, Canada, Europe, and Asia and is available over 10,000

specialty retailers accounting for 22% of the seasonal gourmet chocolate sales

(14). These are higher-end retail formats with a high price point. In addition to

chocolates, Godiva also sells truffles, coffee cocoa, biscuits, dipped fruits and

sweets, chocolate liqueur, shakes, wedding and party favors and other items

arranged in gift baskets (14). Godiva Chocolatier is a very successful and

innovative company. They are expecting a total of $650 million dollars in sales

18

this year (14). Because Godiva Chocolatier offers a wide variety of holiday

chocolates, they target to holiday chocolate buyers from households with incomes

more than $150K (14). These consumers take timesaving into account as part of

their shopping equation. This mindset is reflected in the fact that this holiday

chocolate buyers are nine times as likely to buy their chocolate presents as they

are walking rapidly in the mall compared to those making less than $25K (14).

Godiva offers boutiques and specialty shops in malls that appeal to consumers

who are buying seasonal chocolate to give as a gift and to those consumers with

higher incomes that are timesaving. (14). Godiva chocolates come in attractive

packaging that is suitable for a gift giving (12). Godiva recognizes the value of

catalog marketing as part of the company’s promotional efforts as well (14). This

company caters to both consumers and businesses, and supplements the catalog

with live phone assistance to facilitate orders (14). Finally, natural/organic stores

also over index among more-affluent holiday chocolate buyers like Godiva with

incomes more than $100K (14). Placing gourmet chocolates, licorice, or candies

in these markets would be the most profitable distribution channels.

13.1.4 Lindtt & Sprungli

Among the leading companies in the “other” seasonal gourmet chocolate

segment, only Lindt & Sprungli has any significant name recognition with 18.5%

of the market (14). Lindt & Sprungli, more commonly known as Lindt, is a luxury

Swiss Chocolate and confectionary company. None of the companies in the

gourmet seasonal chocolates generated much in the way of market share, which is

19

why the collective “other” manufacturers accounted for the greatest share (40%)

despite 2010-11 FDMx sales of only $2.6 million (14).

13.2 Secondary Competitors

13.2.1 Hershey’s Twizzlers

Hershey’s Twizzlers brand is the licorice market leader, controlling the

market with 72% of the licorice market share in 2008 (3), and with approximately

70% in 2010. Of the company’s $157 million in licorice sales, Twizzlers stand for

$112 million. Although an increase in 2.3% during 2009-2010, Hershey’s market

share in the licorice segment as while declined by 2.2 %(1). Twizzlers have a

strong support for its products, especially for basic ones, such as the classic

strawberry (3).

According to the GMID market research form 2011, Twizzlers, is one of

the top three most iconic and beloved American sweets (2). Twizzlers is

considerably popular among adults, due to Hershey’s positioning as a “zero fat”

product. Its packaging, including a desktop dispenser of individually-wrapped

candies, is an additional factor assisting the product distinguishes itself as targeted

to adults (3).

13.2.2 The Foreign Candy Co-- Rips Whips

First started with a focus on gummy bear, the Foreign Candy Co later

launched Rips Whips, which is a licorice coming in many different fruit flavors

and forms. Its mother brand vision is to continue innovations and understand kids’

demands. As a result, Rips Whips firmly focuses on kids as their target as Rips

Whips is meant to be played and eaten. Kids can do the braid, twist, know, and

20

etc, which can create a brand story and experience. Even though Rips Whips is

not the main competitors as our potential target is likely to be 18 years of age,

product varieties in terms of the flavor and size can attract other consumers as

they may have specific needs e.g. bite size, belts, and package. Moreover, adults

with two or more children in the household are 5% more likely to choose non-

chocolate hard and chewy candy when they crave sweet. This gives an

implication that children can have an influence on parents’ eating habits. (4)

13.2.3 Private label sugar confectionery

Private label in the sugar confectionery category and, especially in licorice

segment, are barely considered a player (1). Private labels account for only 5%

share of value sales of the category. Having said that, these brands might benefit

from an increased price-consciousness among consumers during the recession (2).

14. Wiley Wallaby Today

Wiley Wallaby is a product line and brand name of licorice and licorice type candy

produced by Kenny’s Candy in Perham, Minnesota (15). Wiley Wallaby’s mission statement is

to produce high quality licorice enjoyed by all consumers. They also want to offer value to all

customers and consumers (15). They don’t have a specific niche or target audience. According to

their Facebook page, they simply focus on all consumers. Their mission statement also includes

to follow the highest manufacturing practices so that they can offer the safest product possible to

all consumers. Finally, they also want to grow their business respectfully and responsibly (15).

They position themselves as being soft, chewy, full of flavor, and delicious. They also

say that their Gourmet Red is an Australian Style soft gourmet licorice that everyone will enjoy

(15). They position themselves as being a premium line and an “Australian Style” candy. Finally,

21

they say they expand the licorice category by offering flavors other than Strawberry and Licorice

and Chocolate (15).

They currently manage a website where customers can order online. They also have a

Facebook page that has 422 followers. Even though they have a presence in social media, they

don’t really know how to use it because unrelated pictures and unrelated subjects are posted in

this Facebook page. Finally, there is a mismatch between the “gourmet” characteristic they say

they stand up for and the aggressive commercials with the more casual wallaby punching people

in the face.

15. Discussion

The main objective of this research was to understand the disconnection between the way

that Wiley Wallaby is currently marketing themselves and their ideal position as a gourmet and

premium product. In this discussion, we will compare the way in which Wiley Wallaby is

currently positioning themselves and the way that successful gourmet products have been

marketed. We will explore this in terms of target market, positioning, brand image, packaging,

distribution, and marketing strategies.

15.1 Target audience

The primary target market for regular chewy candy is 24-44 years old,

which is the group with the largest growth and consumption. Gourmet candy’s

primary consumer is 18 to 35 years old, with a slightly higher income. Women are

more likely to appreciate the difference in taste between premium products and

conventional ones. There is a potential overlap between the gourmet candy

consumers and the target market of conventional chewy candy.

22

15.2 Brand Image

The current brand image of Wiley Wallaby is focused on being family-

oriented and Midwest hometown, with a Australian-style, gourmet twist. This

makes it a bit more unique than the run of the mill licorice like Twizzlers and Red

Vine. People that purchase gourmet products say that taste, price, quality,

packaging are the main criteria that they look for when searching for premium

products. The price and packaging will influence the person to buy the product in

the first place and then the quality of it will make them buy it again.

15.3 Product positioning and media preference

Gourmet products are focused on price, quality, and packaging. They tend

to have more unique packing and a higher price and made with higher quality

ingredients that are sometimes natural or organic. Wiley Wallaby has a bit of a

disconnection between their ideal positioning and their actual product. On one

hand, they use higher quality ingredients and are pricier than conventional licorice

brands like Twizzlers. Their packaging says specifically that they are “gourmet”.

On the other hand, they aren’t marketing in a way that coincides with the gourmet

product that they have. For example, the tone of their commercials is more

focused on humor and slapstick rather than the fact that the product is high in

quality; the commercials do not deliver this message. The gourmet consumer is

looking for more subdued and informative ads that deliver the message of the

quality of the product. The Facebook page also demonstrates this disconnection. It

is not used in a productive way because even though it has information about the

product, it is disorganized and at times seems superfluous. The Facebook page has

23

a lot of images of baseball team proportions with the Wiley Wallaby mascot,

which doesn’t go along with gourmet image that they are trying to promote.

15.4 Product distribution

Gourmet confectionery products are usually sold in specialty stores such

as Whole Foods. They are more selective in terms of distribution channels. For

example, some only distribute to certain cafes and small gourmet shops. Some

gourmet confectionery products are distributed in regular grocery stores, but in a

special section. The key thing is that gourmet products are very selective in their

distribution channels, which is something that cannot be said of Wiley Wallaby.

They are not quite sure where their products are distributed, yet one known place

is sold in gas stations and convenience stores. This does not go along with the

gourmet positioning.

15.5 Packaging

Gourmet packing should be small, unique, with a label that mentions the

fact that the product is natural, organic, or higher-quality. An additional factor

would that the packaging highlights the flavor of the product. Wiley Wallaby’s

packing could be considered more premium than that of other conventional

licorice brands such as Twizzlers and Red Vines. The shape is unique and the

gold detailing gives the impression of the product being higher quality. Also, the

packaging of the product says that it is gourmet, softer than regular licorice, and

full of flavor. Nevertheless, there seems to be a disconnection between the

premium packaging of Wiley Wallaby and the places that the product is

distributed and sold.

24

15.6 Market growth

The research has shown that the non-chocolate gourmet confectionery

category is not projected to have high growth in the future. On the other hand,

there is currently room for the growth of “affordable premium” or “entry-level

premium”, which are items that promote good quality but are still perceived as

straddling the value side of things.

16. Recommendations/Conclusion

Based on the research done, it seems as though there is a disconnection between gourmet

confectionery products and the way that Wiley Wallaby is positioning itself. Some of the

elements of the product coincides the gourmet sector in terms of packaging, price, and higher-

quality ingredients. But the marketing communication of Wiley Wallaby and its distribution

channels reflect the disconnection and confusion of the brand image. Wiley Wallaby aspires to

be premium, but in reality is positioning itself as a hometown, family-oriented candy. Based on

this disconnection and the fact that gourmet non-chocolate confectionery items are not projected

to do well and grow dramatically in the upcoming future, our recommendations for Wiley

Wallaby future plan are:

1. Position itself as an affordable premium product.

The affordable gourmet section is available to consumers at a variety of

stores and will not limit Wiley Wallaby to a small range of distribution channels.

Accordingly, Wiley Wallaby can lift up its brand image while maintaining its

current target audience and expanding to attract upper target audience.

25

2. Alternative distribution channels

The product can be continued to be sold in convenience stores and gas

stations. In addition, Wiley Wallaby can also start distributing in stores such as

Marshalls, TJ Maxx, Home Goods, and regular grocery stores. The reason being

is to ensure product awareness and ability to all target audience.

3. Focused media approach

Affordable premium is often promoted in a subtle way by using word of

mouth and media coverage to inform customers about the product. Wiley Wallaby

should continue to run promotional events in order to increase brand awareness

and WOM, while also utilizing their Facebook page in a more productive way, by

getting the word out about events and engaging the consumers by encouraging

them to post pictures and videos.

4. More insights through primary research

Primary research should aim to find out how Wiley Wallaby is perceived

by the consumer, and whether its image can be positioned as premium, affordable

premium, or conventional product. The insights gained will be used to justify the

decision whether Wiley Wallaby should lift up its brand as affordable premium

and to discover if there are any brand transformations or cautions to be taken into

account to achieve this positioning.

26

Appendix

Exhibit A

27

References

(1) Candy Production in the US -August 2012. Retrieved October 20, 2012, from IBISWorld

database Industry Report 31134.

(2) Chocolate Production in the US - June 2012. Retrieved October 20, 2012, from IBISWorld

database Industry Report 31135

(3) Specialty Food Stores. Retrieved October 20, 2012, from IBISWorld database Industry

Report 44529.

(4) Best Practices in the Gourmet Industry By Perry Reynolds, Vice President, Marketing &

Trade Development, IHA. Retrieved October 20, 2012, from Warc database.

(5) Wen-fei Uva. Marketing Specialty Jams and Jellies to Gourmet Consumers. Retrieved from

<http://hortmgt.dyson.cornell.edu/pdf/smart_marketing/uva7-05.pdf>

(6) Hershey, Ferrero Partner on Warehouse, Distribution. Retrieved from Gourmet retailer.

<http://www.gourmetretailer.com/top-story-candy-

hershey__ferrero_partner_on_warehouse__distribution-10209.html>

(7) The Gourmet retailer 2012 state of the industry. Retrieved from Gourmet retailer.

<http://www.gourmetretailer.com/userfiles/0812%20TGR_10-13_SOTI%20final.pdf>

(8) Walters, Rockney. & Mackenzie, Scott. (Feb, 1998). A structural equation analysis of the

impact of price promotion on store performance. Journal of Marketing Research. Vol. 25,

No. 1. p.51-p.63.

9. Sloant, Elizabeth. (April, 2011). Top ten food trends. Retrieved from

<http://sloantrend.com/attachments/article/9/2011-04IFTFoodTrends.pdf>

10. Non-chocolate confectionery – October 2010. Retrieved October 6, 2012, from the Mintel

database.

28

11. Lindell, C. (2011) Licorice continues to evolve. Industry Trends. from ProQuest.

12. Company History. (n.d.). Jelly Belly. Retrieved from

<http://www.jellybelly.com/about_jelly_belly/company_history.aspx >.

13. Godiva (Rep.). (n.d.). Retrieved October 19, 2012, from Mintel website:

<http://academic.mintel.com.proxy.emaerson.edu/display/591729/?highlight=true#hit1 >

14. Gourmet. (n.d.). Mintel. Retrieved from

http://academic.mintel.com.proxy.emerson.edu/display/591744/?highlight=true

15. Wiley Wallaby Gourmet Liquorice. (n.d.). Wiley Wallaby Gourmet Liquorice.

Retrieved from http://www.wileywallaby.com/

16. New Market Research - Food Gifting Market Up 2.5% From 2011, Reaching $11.15 Billion.

Yahoo

<http://finance.yahoo.com/news/market-research-food-gifting-market-070800284.html>.

17. Seid, D. (2008, Jul 20). Prices may rise, but demand for gourmet chocolates and other candy

stays steady. McClatchy - Tribune Business News. Retrieved from

<http://search.proquest.com/docview/464672983?accountid=10735>.

18. Market Research, Gorrmet, Specialty and Premium Foods, Beverages and Consumer Trends

in the U.S., 8th Edition. Retrieved from

<http://www.marketresearch.com/Packaged-Facts-v768/Gourmet-Specialty-Premium-

Foods-Beverages-2108812/>.

19. Eder, R. (2003). Candy assortments go upscale for the holidays-and every day. Drug Store

News, 25(17), 47-47. Retrieved from

<http://search.proquest.com/docview/204775098?accountid=10735>.

29

20. Licorice in the limelight: new offerings such as straws, ropes, filled and pastels, are starting

to steal the show in this tradition-rich sector” Professional Candy Buyer. 14.3 (May-June

2006) p. 46.

21. Chocolate Confectionary- US- April 2012. Retrieved October 21, 2012, from the Mintel

database.

22. Gfk MRI Reporter. Fall 2011 Product Candy/Sweet/Snacks Adults: Bought/Last 6 months

Twizzlers

23. Chewy Candy. (n.d.). NCA Sweet Insights. Retrieved October 18, 2012

24. Candy and Snack TODAY � May/June 2012 : NCA Sweet Insights: A Wealth Of

Industry Knowledge. (n.d.). Candy and Snack TODAY � May/June 2012 : NCA Sweet

Insights: A Wealth Of Industry Knowledge. Retrieved from

http://onlinedigitalpublishing.com/display_article.php?id=1049958

25. Candy Manufacturing August 8, 2012 Retrieved October 17, 2012 from Proquest Database

Image Reference

26. [Licorice allsort necklace]. Retrieved Oct 11, 2012 http://www.etsy.com/listing/68961648/licorice-allsort-necklace-by-lightboat?ref=pr_shop