Business Opportunities Weblog

September 17, 2007 by Rich Whittle | 2 Comments

USA Today:

The everyday marshmallow is toast.

Replacing it: gourmet, fancy-dancy marshmallows made with everything from caramel swirls to chocolate chips to passion fruit.

Even giant Kraft is jumping on board. Earlier this year, it rolled out Jet-Puffed StrawberryMallows — its first flavored entry — and the strawberry version already is outselling plain ones 2-to-1. No wonder Jet-Puffed sales are up 9% this year.

Kraft and rivals aim to prove “gourmet marshmallow” is not a contradiction in terms.

“Consumers have started to snack on marshmallows,” says Gwen Gray, Kraft’s marketing director for Jet-Puffed. As kids go back to school, Kraft is adding chocolate to its marshmallow mix and putting its three flavors into 90-calorie variety snack packs.

After several years of inconsistent sales, the innovations have the $132 million marshmallow industry up 7.4% though July compared with the same period in 2006, according to ACNielsen.

Plush Puffs Gourmet Marshmallows adds no preservatives or artificial colors or flavors to its products. A sack of 16 Caramel Swirl marshmallows sells for $5.99. “If you toast them, they’re amazing,” adds owner Ann Hickey.

Pete’s Gourmet Confections sells “artisan” marshmallows in gift packs from $10 boxes to $60 baskets. Pete’s has lavender and savory (chili-flavored) marshmallows on tap, says co-owner Peter Croyle.

Whole Foods owns Tiny Trapeze Confections, which makes traditional marshmallows but with organic sugar. A box of 15 is $4.99. “What’s trendy in foods these days are nostalgic, classic foods,” says Suzanne Lombardi, facility team leader at Whole Foods.

For $28, Dean & DeLuca sells a 1-pound Boulé Marshmallow Sampler of lemon chiffon, passion fruit, vanilla and rose-petal flavors.

Just Born, maker of the marshmallow Peeps popular at Easter, rolled out sugar-free Peeps (with Splenda) in March.

Photo by Plush Puffs.

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Tags: Food, Niche, Sales