Dive Brief:

• Upscale U.S. candy retailer Sugarfina will receive a $35 million investment from private equity firm Great Hill Partners, according to Confectionery News. This brings the total investment capitol for the successful upstart to $50 million.
• Sugarfina will use this investment to expand beyond the U.S. and Canada to the Middle East, Europe and Asia by early 2018. The company also plans to expand its online shopping platform, as well as its mobile, wholesale and corporate gifting sales.
• Created in 2012, Sugarfina has 38 locations across the country and brought in $25 million in revenue last year. The company expects sales to double this year.

Dive Insight:

Now is a good time to be in the luxury candy market. Despite numerous food and beverage companies cutting back on sugar to meet consumer demand for healthier food, luxury candy retailers are doubling down on the ingredient. 

The mention of luxury candy may conjure images Godiva or La Maison du Chocolate. Sugarfina, though, offers an experience to go along with its lineup of sweet treats. When customers walk into the store, they see a wall with an assortment of upscale candies like champagne gummy bears made with real Dom Perignon, Parisian pineapples imported from France, and maple bourbon caramels made in the U.S., just to name a few. Shoppers select a robin’s egg blue bento box to fill with their favorite treats. The three-piece bento box, the most economical choice, starts at $25. 

In addition to Sugarfina's pleasing store setting and service-first approach, three quarters of the candy products on display are exclusive to the retailer. In a statement, Peter Garren, a principal at Great Hill Partners, called Sugarfina "a proven disruptor in a huge industry that hasn't seen a lot of innovation." 

Sugarfina has seen strong sales with this model. Less than five years since its launch, the company, which calls itself a "candy store for adults," is expecting $50 million in revenue this year. 

The target audience for Sugarfina is largely female “loyal foodies and fashionistas.” In addition to the in-store bento box experience, the company’s website focuses on special social occasions like weddings and birthdays as the perfect time to give its candy as a gift or favor. This opens the market up to more purchasing occasions and customer demographics.

Sugarfina currently has 24 boutiques and 14 shop-in-shops in North America. However, there are dozens of other outlets that carry its candy, ranging from upscale women’s fashion designer Alice & Olivia, to the more approachable Total Wine and More. As Sugarfina expands its reach, expect to see more of its products popping up in both high-end stores and more mainstream ones. 

The success that Sugarfina is experiencing could make it an attractive acquisition for candy giants Hershey’s or Mars. Despite the bad press sugar is getting, consumers are still buying candy at a range of price points. The Shelby Report found that chocolate and non-chocolate combined grew 2% in 2016. Compare that to Sugarfina doubling its revenue in a year, and candy makers are sure to notice.