Walgreens has a cult “scalable” candy, courtesy of a Tik Tok craze | CNN Business

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CNN
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It’s small, squishy, ​​chewy. It’s shaped like a cute baby mango and GenZers have gone crazy over it. Walgreens can’t stock it.

For the beleaguered pharmacy chain, the quirky ‘Gummy Mango’ candy is a much-needed win. It arrived last fall in about 2,500 of its 8,700 US stores and quickly sold out because, of course, TikTok. Online, Walgreens imposed a limit of one bag per customer on the small inventory that remained.

The unexpectedly viral product comes at a time when Walgreens has a lot on its plate that isn’t fun — debts pile upemployee concerns, competitors taking market share, store closings, its customers spend less on things they don’t need. It’s also juggling having to keep everyday items like shampoos and shaving cream locked up due to theft issues, much to the chagrin of customers. Walgreens really needed some – any – good news.

Fortunately, the mango-flavored treat plays into the company’s long-term strategy to beef up its retail divisions, said Morningstar analyst Keonhee Kim.

The product itself is a $1.99 bag of candy that belongs to a trendy genre of confectionery known as gummy candy. This candy from Walgreens cheaper Nice! the house brand of snacks and drinks is different because it actually is deductible.

In early January, a video explaining its uniqueness by TikTokers @Trinhdoesthings received a whopping 8.9 million views.

In the video, she picks up a package of candy at a Walgreens store “after seeing it all over social media.” She rips it open at her kitchen table, then peels off the outer skin of the mango-shaped gum and pops the shiny smooth inner pulp into her mouth, proclaiming, “This is so much fun.” She then proceeds to eat the shell as well, complementing its chewy texture.

Other TikTok videos compared the treat to the peach- and grape-flavored peel-off gummies from Japanese or Korean brands available on Amazon, or showed ways to punch up the flavor by adding spice to the mango version.

Walgreens said it didn’t work with a paid influencer to hype its mango gummies, but it took off organically. It also declined to disclose how many packages it has sold so far or total sales so far.

“The interactivity of it is really cool and that’s what makes the peelable candy really fun,” Marty Esarte, Walgreens’ vice president of owned brands, said in an interview with CNN. “It also creates a point of discussion: Is the outer layer better than the inner rubber or are they better together or separate?”

Esarte admits he didn’t expect the squishy treat to become a viral hit. “Literally within about four to five days of launching it, we sold almost the entire product,” he said. “If we had expected that to happen, we probably would have had more.”

The idea for the candy first emerged in 2023 during a discussion between Esarte’s team and a Walgreens supplier.

“One of our suppliers that we’ve worked with for more than 20 years identified this deductible candy trend last year that had emerged in Asia and brought it to us as an opportunity,” Esarte said.

The timing fit perfectly with the latest candy consumption trends. The overall non-chocolate segment, which includes gummy candy, has broken down primarily due to Gen Z and millennial consumers, according to the National Confectioners Association.

Younger consumers, especially Gen Z, are into all things retro and vintage and this trend also translates to food. According to industry publication The Food Institute, Millennial and Gen Z shoppers prefer the fruit-flavored gummies they grew up on.

In the US, the segment saw a 12.1% increase in dollar sales in 2023 compared to a year ago to reach $19.2 billion in total sales. It is also accounts for more than 30% of all confectioneryy sales in the country.

As Esarte and his team rushed to stock up on the mango gums last year, a bigger challenge emerged. Their needs coincided with the timing of the Chinese New Year when all factory production in China stops for a few weeks. The situation was not ideal.

“Whatever product was still available overseas, we shipped it to get it into stores quickly,” Esarte said.

After weeks of hustle and bustle, Walgreens is better prepared to make a bigger splash with the mango gummies. “We have bought a much larger quantity of the candy and it will go into 8,000 stores in May.”

A new taste and a new CEO

But Esarte tipped off CNN to the next flavor to come. “We’re launching a scalable banana gum next,” he said. “Banana is a common favorite flavor across the US and the world and we think it’s another great item to add to the scalable gummy mix.”

Banana Gummy (priced at $1.99 per bag) will launch in 5,000 Walgreens stores in May. The vendor already sells pineapples and orange gummies, but they aren’t as fun because you can’t peel them.

Morningstar analyst Kim, who covers the health care sector, said the candy is a nice win for Walgreens at a time when its problems have mounted over the past 12 months and its stock has fallen 50% over that period.

“There was a big leadership change with that CEO leaves and new CEO Tim Wentworth comes in. As Tim takes over the company, he’s thinking about where the future growth for Walgreens will come from and where there are some areas where they can cut costs, Kim says.

One area is the front end of the pharmacy, usually where candy, snacks and other private label products are sold.

“That space is a very important part of the business,” Kim said. “That area is definitely a more profitable area than the backend of the prescription business. Focusing on that piece with newer offerings will be key for Walgreens.”