Candy Club, page-67

I'm interested in the IPO based on past business success stories of key players and the products, but can't get my head around the fact that basically the business sells flavoured and textured products that contain sugar, or if low sugar or sugar-free, will still be associated with adverse publicity around sugar intake.

Little mention of current ongoing and potentially increasing consumer and health organisations push back against excess sugar intake - I feel it should have been listed as a definite risk in the prospectus, under section 1.4 KEY RISK FACTORS - more so a medium to long term risk factor than here and now.

All I saw was:

Confectionery Industry TrendsDemand for confectionery is highly seasonal and in USA, total industry demand peaks during seasonal holidayssuch as Christmas, Valentine’s Day, Halloween and Easter.A trend in the confectionery industry is the increased prevalence organic or gluten-free confectionery, or confectioneryusing non-genetically modified (GMO) ingredients.Additionally, producers are moving away from using animal-based gelatine and toward fruit pectin and vegetablebasedstarches, to develop products to appeal to consumers who may otherwise not purchase confectioneryfor personal or religious reasons.

Premium, higher-margin confectionery has outpaced demand for lower-marginmainstream and private-label products, in part because of manufacturers’ experimentation with new flavours,combinations and textures, and reformulation of ingredients to appeal to consumers’ growing health consciousness.Conversely, consumption of soft confectionery (such as gelatine based marshmallows, gummy worms, jelly beansand gum drops) is sugar-heavy or sugar coated, and therefore difficult to adapt to health-conscious consumers.

Being most popular with children, sales of soft confectionery are also vulnerable to concerns about child obesity,and are declining as a share of revenue. However, hard confectionery (such as candy canes, boiled confectionery,or confectionery covered in a shell) is easier to produce sugar-free and also caters to older consumers, and forthose reasons has not been as vulnerable to health concerns"

Which is fair enough. But will the majority of consumers understand enough to make a distinction between bad and "less-bad" for you? I doubt it. They are more likely to lump all "candy" into "I like it and I don't care who tells me what to eat or not eat" or "I won't eat that stuff any more", the latter being a growing trend I would guess.

Just my thoughts at this stage of the IPO.