In today’s food and beverage marketplace, consumers demand healthy choices in all product segments. Candy is an item defined in many people’s minds by recipes laden with sugar, which is not exactly what one tends to associate with good health. But change is underway, and at the vanguard of this evolution is Erica Williams, Founder and Chief Executive Officer of The Yumy Candy Company (CSE:TYUM).
Vancouver-based Yumy Candy Company is a leader in better-for-you candy, not only because it is an emerging category ripe for new entrepreneurs, but also because it fits the kinds of goals that Williams and her team are committed to accomplishing.
In a wide-ranging interview with Canadian Securities Exchange Magazine in early December, Williams discussed her strategy for launching The Yumy Candy brand, the market it plays in, and why the company’s products are already segment leaders.
The better-for-you category is self-explanatory on the surface. But how big is this segment of the food and beverage industry and what drives a successful product and brand?
The better-for-you confectionary market is just getting started. It is not a trend. I think that is the number one thing I am asked. We are the first and only vegan and better-for-you confectionary company to go public, which is a huge accomplishment, and it gives investors and opportunity to invest in the future of the confectionary sector.
I think we will see more and more better-for-you candy companies IPO, as this is a growing space and still has lots of upside potential.
The better-for-you space has been growing substantially over the last five years. I’ve seen it with the shift from high-sugar products to low-sugar alternatives, and then it was from meat and dairy to vegan options, with initially the plant-based meat, and now the plant-based dairy industry taking off. I believe the vegan confectionery sector is just at the beginning of its growth.
In 2020, the global health and wellness food market was valued at US$733 billion and projected to increase to $1 trillion by 2026. In 2019, the sugar-free market in the US alone was a $1.88 billion industry. Over 60% of consumers say that working toward a more plant-based diet is the trend they are looking for.
What drives a successful brand is a winning product and a winning team, and I think we have both. At the end of the day, it comes down to what the consumer wants, and listening to what they are looking for. Innovation is key and that’s exactly what we’re doing here at The Yumy Candy Company.
Candy is a large and competitive market segment. What advantages do Yumy Candy products have? How did you decide on these and then develop products based on that insight?
I’ve been in the health and wellness space for a long time and have my finger on the pulse of what people are looking for, and that is essential to give your brand that edge.
One of the biggest competitive advantages is that we are really focused on taste and texture. Not only are Yumy Bears the best tasting, but they are also much softer and don’t get stuck in your teeth like other candies. You no longer have to sacrifice taste and satisfaction when choosing a better-for-you candy.
Going into our launch, we did extensive market research in the confectionery space and it showed that consumers are looking for new vegan and environmentally sustainable options that are better for human health and animal welfare. We realized there was a significant gap on the shelves. Being one of the first better-for-you alternatives in the aisle has given us a huge competitive advantage. Companies like Hershey’s and Haribo are slowly starting to make adaptations to come into the space, but hopefully by that time we have claimed the unclaimed market share.
The second competitive advantage of our products is that we are up to 92% less sugar than traditional candy. There is a huge trend toward low-sugar items. Most people are aware of how overconsumption of high-sugar products has negative impacts on overall health, especially for children.
And the third competitive advantage we identified is the movement away from sugar alcohols and artificial sweeteners, because they have been shown to influence blood sugar levels. We cater to the demand for great tasting, naturally sweetened products without using any sugar alcohols or artificial sweeteners. And then over the last two years, immunity and health has been at the top of people’s minds. Consumers are becoming more conscious of what they are putting into their body and that is another reason we are seeing people gravitate toward healthier confectionery options.
The distributors you utilize supply many of the largest food and pharmacy retailers in Canada. How extensive do you see distribution of your products becoming in terms of store numbers and over what period?
We wanted to make sure we partnered with distributors that have strong retail partners. We recently partnered with a couple of Canada’s largest distributors of quality health and confectionary products. That will bring us significant growth in sales and increase market share. Working with distributors with all of the major retailers in Canada, such as Whole Foods, Loblaws, Sobeys – they have distribution to over 7,000 vendor locations – we expect to be in thousands of locations in the next 12 months.
One of our distributors has been the main factor in establishing and distributing many great bands and companies in the confectionary space, one of which was recently acquired for US$360 million in our direct better-for-you space. Star Marketing, our other main distributor, has won awards for their relationships with retail chains such as London Drugs. We are excited that The Yumy Candy Company is well on its way to gaining tremendous market share in a relatively short period of time.
Walk us through sales to date and your marketing strategy. How important is brick-and-mortar retail compared to online sales?
Our sales strategy was to go directly to consumers. We wanted to get into the hands of consumers, let them taste the product and then let them decide. We conducted in-store product tastings, attended trade shows, went to local markets – every community event possible to get in front of our target customers. The feedback was overwhelmingly positive and we knew we had a winning product.
Our sales strategy was to establish a strong retail presence in a short amount of time and that was really to start with brick-and-mortar retail, and that allowed us to grow across Canada and establish that strong retail presence.
We also launched our e-commerce. Given recent events, people have stayed home and are looking to shop online, so we did them in tandem. We recently scaled into a large nationwide distributor, which allows us access to the large retailers in the country, as well as the largest volume of brick-and-mortar businesses. That has brought us double-digit percentage growth each quarter and we expect to see that well into 2022 and beyond.
Being a young female founder, I knew it was important to be omnipresent throughout our marketing strategy. We engaged in multiple layers of strategy, from influencer marketing with both macro influencers, or people with over a million followers, and micro influencers with more intimate but loyal followings. And we drove traffic through social media advertisements.
We also leveraged tried and true methods such as traditional product tasting teams across the country, in-store print advertising, billboards, and physical guerilla marketing like vehicle wraps. We see both brick-and-mortar and online sales as important, with an obvious trend toward online shopping, which is why we are currently scaling to different online platforms using traditional and new technological methods such as obtaining a large Instagram and Facebook footprint, SEO, online PPC and geotagging. But our product is a convenient grab-and-go snack and will always excel in the grocery, pharmacy, convenience and retail channels which we will continue to expand throughout the leading national retailers.
It would be great to hear some of the feedback from retailers and consumers.
We’ve got a lot of positive feedback, which is amazing. One of our main sources is product tastings on social media and strong relationships with our retail partners. Everyone enjoys the delicious fruity flavours we offer and the soft and squishy texture that does not get stuck in your teeth. People also love the variety of low-sugar candy and that we are 100% vegan. Overall, people love to have healthy treats that they can enjoy and feel good about eating, and that’s what we’re all about at Yumy Candy.
This story was featured in the Canadian Securities Exchange magazine.
Learn more about The Yumy Candy Company at https://yumybear.com/.