Bittersweet Business
The demonization of sugar may not have killed the candy aisle, but it allowed for innovation in the form of “better-for-you” to blossom. Unlike soda, candy is seen as an indulgence instead of an every day occasion and in the minds of consumers, it’s not as necessary to police sugar as much, candy is candy afterall. The most succesful example of this has been Smart Sweets, which sold for $360 million back in 2020, note that it was also founded around 2015, peak Millennial better-for-you era. The brand also had a significant impact in the aesthetics of the candy aisle, in order to signal its BFY qualities, brands began replicating the minimal, sleek pastel looks that Smart Sweets popularized, hinting at a more modern take on candy.
As GenZ entered the mix, the Goopification of the snack aisle in general started to land differently, a generation that became notorious for deeming anything Millennial cringe and their rejection to the pristine pastel aesthetics and need for everything to be healthy, the pendulum always swings back, allowing for a new wave of brands that cater to their generational cohort to rise. Think brands that are not overly relying on functions that are not pertaining to candy and reminding you the purpose of said vehicle will always be indulgence, first and foremost. Even GLP-1s haven’t affected our yearn to treat ourselves to a sour worm or two, but do we really need high protein gummy bears?
To recap, Millennials and Genz have pushed the category towards:
healthier: low sugar, functional ingredients
novelty: make it interesting flavor/textures
premium: novel/BFY is worth the splurge
and it has given BigCandy an existential crisis, existing in the middle has become increasingly harder as it shrinks and becomes less appealing, be it MAHA propaganda or the rise of food apps like Yuka, looking for growth, iconic legacy brands are now pushing outside traditional aisles into licensing, see Sour Patch Kids pre-workouts and Skittles water. They said nostalgia is a powerful drug, let’s see how strong it is to pull legacy brands out of their troubled waters.
Something Rotten This Way Comes
Half a decade ago I stumbled upon a Kickstarter, and if you’re reading this is because you know I usually make my bets very early on, and usually in the right—Rotten’s manifesto on building a better option of candy that actually tasted good without the weird aftertaste from alt-sweetners or compromising on texture, while embracing a pretty disgusting look had me hooked. The Kickstarter raised $38,000 almost 4x its original goal of $10k and founder Michael Fisher (aka Dr. Rotten) has been able to exponentially grow that initially cash injection, his brand has become mainstream, available now in retailers like Target and Walmart. Rotten started out with gummy worms as their better version of Trolli, they have also made their own versions of Starburst, Skittles and Nerds, see Cruncheez, Tiniez and Chewerz.
The branding is a combination of Dr. Dreadful Food Lab and Garbage Pail Kids enveloped in 90s nostalgia, as you can tell from the original imagery, consider their original logo was filled with guts and bones. The key to their success? Making an incredibly good tasting product, Michael Fisher even delayed his official launch while still tinkering with the formula to make it taste as good as it gets, even when they launched their V1, they eventually reformulated to make sure that they were ready for the mainstream.
The dedication has paid off, just looking through Reddit, you can tell the brand is being embraced tastewise as it pushes more into mainstream, they are now available at Kroger, Sprouts, Walmart, Target and Costco (regional) and their revenue forecasted for 2026 has grown 3x (200%) compared to last year according to founder Michael Fisher. I wouldn’t be surprised to see Rotten start to pop off into C-stores in the next coming year, their only challenged that I can perceive is making sure they can reach price parity, hopefully as they scale it won’t be long to see that happen. Who knew the future of candy would be equal parts delicious and disgusting?