Chattanooga’s Slice of the Economic Pie
And so it begins. As your kids were relishing in the spoils of their trick-or-treating loot, retailers were changing to holiday displays overnight. While many grumble about the increasing speed with which Christmas comes to town, it still lures customers into at least thinking about gift-giving far earlier than before. And it must work: last year, the average American spent $929 on gifts.
Holiday sales are a make-or-break time for virtually all retailers. Almost one-fifth of all retail sales occur during Christmas season. Projections for 2017 are for revenues to reach nearly $682 billion during November and December, an increase of close to 4%, not counting restaurants, gasoline, or automobiles.
Beyond the traditional items under the tree, other businesses see a substantial impact on their annual sales. Airline travel, for instance, increases significantly for Thanksgiving and Christmas. And despite a slight decline in the industry as a whole, holiday greeting cards are still mailed at staggering rates during Christmas, making up around 25% of total yearly greeting card sales.
But the industry that sees the biggest slice of the holiday economic pie? Food and drink. According to the U.S. Census Bureau, last year, food and drink sales were more than $123 billion during November and December, an improvement over the previous year’s $119 billion.
One of the food and beverage industry’s must-haves for the season is holiday-themed candy. It is far and away the top snack adults buy during the holidays, with over 50% of all adults purchasing some, predominantly for themselves or their families to consume. Around 44% use it as gifts, and the rest for entertaining, to fill stockings, or even as decoration.
The top five preferred candy types are seasonal/holiday chocolate, followed by candy canes, snack size chocolate candy bars, chocolate gift boxes, then holiday non-chocolate treats. In the two weeks around Christmas and Hanukkah last year, $1.3 billion was spent on sweets. That’s 6.1% of all candy sales in the U.S.
One of the key players in the seasonal candy race is Mars Wrigley Confectionery, which launched the special red-and-green-only bags of M&M’S® in 1986. Originally, the candies had pine tree and candle symbols instead of their usual trademark, but in 1993, that trademark replaced the holiday symbols. Year after year, M&M’S® continue to be a top seller around the holidays.
According to Mack Phillips, the Cleveland site director for Mars Wrigley Confectionery, “We know chocolate plays a special role in holiday traditions, in fact, more people buy chocolate during the holidays than during any other season. Shoppers are finding more ‘mini’ moments to enjoy during the holidays. People aren’t just purchasing treats as stocking stuffers and gifts, but also for decorating, the largest usage occasion for the season. This gives us the opportunity to treat our consumers with innovative flavors, like the ones made here in Cleveland, and our traditional red and green holiday color bags.”
Mars Wrigley Confectionery’s Cleveland plant manufactures both M&M’S® and TWIX®, another popular holiday treat. This year TWIX® announced it will unveil a new Christmas candy: White Twixmas, an original TWIX® cookie covered in white chocolate. This launch makes sense, considering seasonal launches accounted for 25% of global chocolate product launches in 2016, making it the biggest area of chocolate new product development according to Mintel Global New Products Database.
“We know the seasons create a unique opportunity to leverage celebrations and create fun and exciting packaging for those special moments and occasions for our consumers and fans,” says Phillips.
Mayfield launched the Eggnog Flavored Custard and Peppermint Stick Ice Cream in 2015.
Candy companies are not the only confectioneries that see a spike in revenues during the holidays. McKee Food’s Little Debbie products see massive seasonal growth across their various offerings. Mike Gloekler, corporate communications and PR manager for McKee, shares, “We have several popular varieties that include Christmas Tree Cakes in vanilla, chocolate, and red velvet, Christmas Gingerbread Cookies, North Pole Nutty Bars, Christmas Tree Brownies, Santa Brownies, Cherry Cordials, Eggnog Cake Rolls, and Candy Cane Cakes, as well as single-serve Christmas Tree Cakes that you can find in convenience stores nationwide.”
When it comes to the most popular, Gloekler shares that the vanilla Christmas Tree treats, first sold in 1986, take the cake. “While only available for 8-9 weeks per year, this product is still a top 10 volume item annually. We hear stories all the time of consumers who buy many, many boxes to freeze so they can have our Christmas Tree Cakes all year round.”
Other perennial holiday favorites are Mayfield Creamery’s Peppermint Ice Cream and Eggnog Flavored Custard, which typically roll out the last week of October. Like many seasonal treats, their limited availability makes them quite popular, and some customers will stock up in anticipation of scarcity. “Seasonal flavors are always popular, and this winter, Eggnog Flavored Custard and Peppermint Stick Ice Cream make their return,” says Mark Schneider, ice cream marketing director of Dean Foods, the parent company of Mayfield Creamery.
The creamery also offers holiday Eggnog, which arrives in time for December. Research suggests that occasion-based consumption may prompt individuals to buy products they don’t necessarily eat or drink. When planning for guests, many purchase things family, friends, or acquaintances might like.
Eggnog’s not alone, as seasonal drinks are another mainstay of the holiday economy. One brand that’s top of mind for many consumers is Coca-Cola, whose local bottling plant helps fill those holiday bottles advertised in print and on television, radio, and online. The traditional appearance of the Christmas Coke bottles has the same built-in boost of occasion-based consumption. People want to have food and beverages that family and friends will enjoy. And since there’s a long association with Coke and Christmas, when people see them dressed up for the holidays, they often feel compelled to have some in their home, even if only for nostalgia.
Year after year, Coca-Cola launches a new holiday bottle design. Last year brought an updated play on the classic polar bear design. In 2015, the company introduced a bottle whose label could be folded into a holiday bow. For years before that, it offered ornament-shaped bottles.
While Coca-Cola products sell throughout the holidays regardless – after all, the company reports more than 1.9 billion servings of its products are consumed daily – the holiday bottles and advertising give them an additional boost.
Local restaurants also see profits from seasonal offerings. For example, Big River Grille’s downtown location starts brewing seasonal beers in early December. Yule Fuel Black Lager, which head brewer T.C. Sentell describes as “dark beer flavors of roast and chocolate but with a lighter body,” is a favorite and the first to be brewed.
Mid-December brings a second entry with Winter’s Nip, a decade-long favorite with a strong malty flavor in a higher gravity Bock-style beer. And, for the second year, Sentell will brew a small batch of Figgy Pudding Kolsch, a lighter German-style beer. Describing it, she says, “It’s an easy beer to play with when I want to experiment with flavors, and it works well with figs, cinnamon, and nutmeg.”
And Sentell isn’t just creating these batches for fun – they are an extra way to get consumers in the restaurants throughout the holiday season, a time when many choose to stay home. “We have people asking all year when they’ll be back, and who come in just for those beers,” she says. “They’re quite popular.”
Niedlov’s Breadworks on Main Street has found a sweet spot producing Stollen, a traditional German Christmas bread, each December. Loaves are made with a buttery dough laden with copious fruits. Candied ginger, lemon, orange, currants, golden raisins, and toasted nuts are soaked in rum overnight to rehydrate them, and fresh lemon juice and orange juices are added, with zest of both fruits to give it pop. Each is folded into the dough, which is baked and then each loaf is dipped into rum, then powdered sugar. The loaf rests overnight, again dipped into rum, sugar, and then immediately bagged to maintain the moisture.
It takes 48 hours to make a loaf, which explains its $20 price tag. But according to baker Nick Vallot, “People come from as far as Nashville, Knoxville, and Sewanee to buy multiple loaves.”
Of course, even if a business doesn’t have a product that’s traditionally considered a holiday item, there are creative ways to take advantage of family and friends gathering to enjoy the holiday season. One local company doing just that is Mad Priest Coffee, which is rolling out new varieties just in time for the holidays.
First is a new specialty coffee from Myanmar. The second coffee is Panama Geisha—a very rare varietal from one of the best coffee bean growers, the Hacienda La Esmerelda. They are also adding new gift boxes for mugs, t-shirts, and micro-lots, which are regional boxed coffee samplers for those who love coffee as much as Christmas.
So whether you love it or hate it, the holidays are upon us, and Chattanooga is ready for its slice of the holiday economic pie.