Most candy/chocolatier chains remain hopeful that they will continue to expand, even if delayed until late 2020 or even into 2021. Most of these retailers have been deeply affected by the COVID-19 pandemic, as their preferred locations tend to be in tourist-friendly and high-foot traffic spots that are currently impacted by social distancing, as well as the closure and slow re-opening of malls and lifestyle centers. The upside for this industry is that sweet treats tend to be fun impulse buys and as consumers gain more freedom to shop, there’s an expectation that many will gravitate to these stores for reasonably priced escapism. Rocky Mountain Chocolate Factory, See’s Candies, Kilwins, Rocket Fizz and Fizziwig’s Candy Factory are all preparing to re-open stores and restart expansion efforts.
The pandemic has changed or at least put on hold the pre-COVID-19 trend of combining sweet treats with additional food options in a café/dining setting, as seen with Godiva Cafe, IT’SUGAR and the Sugar Factory brands. Due to social distancing, Sugar Factory is now toying with testing an express drive-thru prototype.
Rocky Mountain Chocolate Factory expects to open three stores by the end of this year before returning its attention to expansion next year. The chain prefers space of about 1,000 s.f., of which 650 s.f. is selling space. It looks for space in inline street-front locations, regional malls, tourist areas and outlet malls with high levels of foot traffic. The retailer’s modular concept can accommodate different retail space configurations, ranging from a full-service kiosk of about 250 s.f. to the chain’s well-known full kitchen floor plan with preparation demonstrations. It can also expand its kitchen feature for larger spaces. Rocky Mountain Chocolate serves chocolates, fudge and caramel apples, and can co-brand with Cold Stone Creamery. As the largest chocolate store chain franchise in the country, with 408 units nationwide, it has been heavily impacted by temporary closures and social distancing rules and drew down its full line of credit, accepted Paycheck Protection Program loans, and reduced operating expenses/production volume.
Expect See’s Candies to focus its growth on strip centers in suburban communities in Southern California. Recent openings include a 1,100-s.f. strip mall store next to a Starbucks, at the La Habra Marketplace in Orange County, Calif., that opened during March. A 1,826 s.f. store opened in Apple Valley, Calif., at the Jess Ranch Marketplace community center. Due to COVID-19, only 25 See’s Candies in California, Utah, Hawaii and Washington are offering phone ordering for curbside pick-up with limited hours. The chain has 200 stores in 17 states.
Chocolate, fudge and ice cream franchisor Kilwins is exploring new markets, including Providence, R.I., Gettysburg, Pa., Omaha, Neb., Oklahoma City and Sugarland, Texas. It will want space ranging from 1,000 to 1,500 s.f. in affluent downtown street-front locations and lifestyle centers. It frequently takes space near colleges with nearby restaurants, entertainment and shops. The 139-store chain currently has 12 units in the works that it expects to open by early 2021, including a first unit in Washington, D.C. All of its stores are east of and in Colorado.
Rocket Fizz’s plans for franchise growth include Montana, Minnesota, Iowa, Idaho, New Mexico, Idaho and the New England states. Its plan for opening 25 new stores by the end of 2020 includes two units in Alabama, a new state for the retailer, as well as five in Colorado, four in Florida, four in North Carolina and one in New York City. The 80-store chain prefers to place its 1,500- to 2,300-s.f. stores in outdoor malls and lifestyle centers, and downtown street-front locations with heavy foot traffic.
Rocket Fizz specializes in a large assortment of offbeat soda flavors, such as bacon soda, as well as nostalgic candies and offbeat candy offerings, such as lollipops with insects inside.
Fuzziwig’s Candy Factory is still searching for new franchisees in the Midwest, South, Southeast, East and Northeast despite putting its expansion on hold due to mandated temporary store closures. Its stores fill space averaging 1,000 s.f., with a preference for locations in malls or high-end outlet centers near children’s retailers or children’s playground areas, with high-end department stores as co-tenants. Fuzziwig’s stores resemble a themed amusement park that sells, along with current and nostalgic candies, small toys, plush stuffed animals and soft drinks. The franchised candy chain has 28 units in 14 states.
IT’SUGAR generally targets unique entertainment and vacation destination venues for its 2,000- to 7,000-s.f. stores, which sell humorous candy creations, such as chocolate covered gummy bears called “Dingle Bearies” and adult-focused chocolates infused with Jack Daniels whiskey and Bailey’s Irish Cream. Catering to the young adult demographic, the chain will want to be able to keep stores open until midnight. It favors lifestyle centers anchored by entertainment and dining venues, including bowling alleys, restaurants and bars, as well as tourist spots with heavy foot traffic, such as Universal Citywalk in Orlando, Fla., Fisherman’s Wharf in San Francisco and Triple Five Group’s American Dream mall in East Rutherford, N.J., where IT’SUGAR has a three-story, 22,000 s.f. store. IT’SUGAR expects to also open a similar type of store at the American Dream mall in Miami and another Triple Five Group property under development expected to be complete by 2025. For the whole 7,000 s.f. third floor of the New Jersey American Dream store, IT’SUGAR worked with Oreo cookie brand parent company Mondelez International to develop an “Oreo TWISTiD” café to be placed in the space. As of late May, IT’SUGAR had re-opened 14 of its 103 U.S. stores in Alabama, Arizona, Florida, Georgia, Idaho, Missouri, South Carolina, Tennessee and Texas. The retailer is planning to withhold rent payments for stores still affected by mandatory closures and parent company BBX Capital Corp. is attempting to work out deferment and abatement deals with landlords.
Godiva Chocolatier plans to expand the use of its new Godiva Café concept, which moves beyond the chain’s usual prepackaged chocolate store set up to offer all-day dining options. The first of 400 to 600 planned Godiva Cafés will appear during the next six years. The first unit debuted during April 2019 at a 1,200-s.f. unit on NYC’s Lexington Avenue. Godiva plans to remodel some of its current locations to the café concept and will add standalone storefront cafés. The chain had planned to premiere ten additional cafés in the Northeast during the first half of 2020, but it has since delayed those store openings until late 2020 or early to mid-2021. Godiva Café’s grab-and-go items include yogurt parfaits and sandwiches, as well as the “croiffle,” a hybrid of the croissant and the waffle stuffed with such fillings as chocolate or cheese, and the “Chocolixir,”an icy blended chocolate drink.
Sugar Factory appears poised to add five to 10 new units each year amid creating a concept that combines a retail candy shop with an upscale restaurant/bar experience, and it hints that it may develop a Sugar Factory Express concept. The express store will have a limited menu available via a new drive-thru configuration that will most likely be added to its dine-in services. Its most recently opened store/restaurant fills 14,000 s.f., including a patio, in the Westfield Century City mall in Culver City, Calif. The retailer also plans to open a unit within the Dover Downs Hotel & Casino during the next couple of months, if not affected by a COVID-19 closure. Sugar Factory favors space in tourist destinations with heavy foot traffic, as well as downtown shopping and nightclub districts. It will also place stores into two- to three-level street-front locations and outdoor upscale shopping centers and lifestyle centers. Locations in or near casinos are also an option. Its stores fill 8,000 to 16,000 s.f. Because of its over-the-top creations (e.g., the King Kong Sundae with 24 scoops of ice cream and toppings, or sliders served with rainbow-colored buns), Sugar Factory is popular with celebrities.
Struggling Candy Chains Refocus Overseas
Sugarfina and Lolli & Pops, both of which filed for bankruptcy last year, won’t open U.S. locations in the foreseeable future. Sugarfina, which specialized in alcohol-infused candy, was purchased by Bristol Luxury Group LLC last November and now plans to focus its expansion in Mexico. Lolli & Pops, which features sweet treats from around the world, was bought out by Terramar Capital LLC during February.
Terramar plans to keep a majority of Lolli & Pops’ 69 U.S. stores open but will place a greater focus on e-commerce and wholesale sales.
Lindt & Sprüngli, which owns and operates 50 Lindt Chocolate, 28 Russell Stover stores and 21 Ghiradelli stores, won’t be opening any new stores in the U.S. during the immediate future. It also plans to close up to 50 stores across all three brands, mainly those located in low-traffic outlet malls. Lindt & Sprüngli will instead focus on opening stores in other counties, namely Japan and Germany.
