Many of us are familiar with the scene in "Willy Wonka and the Chocolate Factory" where Mr. Wonka opens the door to the chocolate room … and the camera takes in a cascading chocolate waterfall, gummy-bear trees and perfectly landscaped edible terrain. In real life, there’s a special candy haven in Revere, at the Necco factory. There's no chocolate river or cupcake mushrooms, but the smell of cocoa, cream and sugar is so intoxicating, it’s almost dizzying.

Necco and Valentine’s Day go hand-in-hand: For more than a hundred years, Necco has been making the edible love notes with sayings like Call Me. Be Mine and True Love that are passed around for real and for play, in kindergartens and offices. With 8 million pounds of Sweethearts sold during Valentine’s Day season, it’s Necco’s biggest holiday.

A business misstep

Not every decision is sweet. In 2009, Necco endured a storm of criticism from consumers when they changed the recipe of their iconic wafers to all-natural ingredients. They have since switched back to the original recipe, but sales remain flat.

> >  Learn how Necco and its fans come up with Be Mine, Tweet Me and other sweet sayings.

So how does a candy company with a foothold on tradition find a way to grow without making its fans sour?

"We’re really trying to appeal to a newer audience with newer products but not forget where we’ve been," said interim CEO Al Gulachenski.

One way to appeal to a newer audience is via social media. This month, Necco launched a Facebook campaign with CVS to crowdsource ideas for sayings to be printed on their Sweethearts for Valentine’s Day 2013.

Forward and back at the same time

While thinking about next Valentine’s Day may be hard to grasp right now, Necco, a company more associated with the past, has a steady gaze on the future.

"They’re a nostalgic piece. People who have grown up loving them continue to buy them," said Gulachenski. However, "people who’ve never heard of them don’t buy them." 

And it’s those people Necco is trying to reach out to.

So what does a candy company better known for evoking nostalgia than trendy novelties do to attract a newer audience? Innovate — or make a product that children will like.

This year, Necco is taking a leap and launching a bunch of new products geared toward kids. One of them is … Zombie Food.

"There’s three pieces: there’s a foot, there’s a heart, and there’s a brain," Gulachenski said. "Brain’s on the top of the zombie food chain. And they’re chocolate and filled with gooey red caramel. So you see the red goo oozing out of the brain."


The challenge of brand identity

Production in the candy industry operates on a different calendar. While you may be eating from a heart-shaped box of chocolates right now, the people at Necco are excited about Halloween. Marketing candy to children is nothing new but this move marks a departure from the safer brands they’ve been putting out there — brands with a distinctly older feel like Sky Bar, Clark candy bars and Mary Janes.

Jeff McKenna is a senior consultant at market research firm Chadwick Martin Bailey. He said that when companies like Necco create new products, they run the risk of working against the brand identity they’ve built for themselves.

"I think about these niche brands and these brands that have a long history. And you see it in all industries — beverage, snacks — where you’ve got a product line that’s been around for 50 to 75 years and it doesn’t appear to have updated. And that in and of itself becomes part of the brand identity," he said. "As marketers, we’re always trying to talk about the rational side of consumer behavior — of the purpose that people have. But really, when you get down to it, everything is driven by emotions."

Those emotions date back to the hard candy your grandmother handed out to you as a child, or the candy bar your dad would occasionally bring home after work. So how does Necco tap into those emotions and gain a newer audience without compromising the loyalty of its longtime fans?

Kids' sense of discovery

For store executives, that question is crucial.

"What we’ve seen be successful is when traditional brands bring something new and exciting to the brand — something different from what they’ve had before," said Rachel Bishop, vice-president of daily living strategy and business development for Walgreens. She said the nostalgic component just doesn’t do it for kids … who haven’t been around long enough to develop a sense of nostalgia.

"They want to discover something before anybody else, and so finding something that your parents already have or that other people know about isn’t as exciting to them as that discovery — finding something new and interesting," she said. "That can be as simple as a packaging innovation or it can be a completely new innovation in a product."

While there will always be room for Sweethearts and nostalgia, sometimes the recipe for innovation calls for some cocoa, sugar and a little red goo. And brains. Lots of brains.


This story originally aired on Feb. 14, 2012.