Like a lot of people, Nate Towne is cutting back on spending. He's car pooling to work and shops only at groceries that take coupons or...

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CHICAGO — Like a lot of people, Nate Towne is cutting back on spending. He’s car pooling to work and shops only at groceries that take coupons or offer discount “rewards” cards.

But even in this economy, he remains a self-described “candy snob.”

“I’m serious when I say I’ll pay a premium for my top favorites because in the grand scheme of things, it’s only a few bucks,” says Towne, a 37-year-old public-relations consultant in Madison, Wis.

He’s not the only one who’s stuck on candy. Americans buy billions of dollars’ worth of the stuff each year — with more than $29 billion in retail sales in 2007, according to the National Confectioners Association. That’s about a 3 percent increase from the previous year.

That sizable sweet tooth is a big reason many analysts say the candy business is likely to fare better than other nonessentials in these economically trying times, even as prices for commodities such as sugar, milk and cocoa have risen.

The bottom line is: As vices go, candy is still relatively cheap for most consumers.

“People may not be able to flip for Starbucks or even to go to McDonald’s. But they have the ability to pay a dollar for a treat,” says Jim Tillotson, professor of food policy and international business at Tufts University’s Fletcher School.

Analysts at The Nielsen Co., which tracks consumer habits, go as far as calling the candy business “recession-proof,” compared with other discretionary items, such as tobacco and carbonated beverages (though beer also tends to do well when the economy is hurting).

They note that consumers are cutting back on longer-distance shopping trips to save gas. As a result, they are spending more at drug and convenience stores with big, easy-access candy sections.

Then there’s the “feel-good” factor.

“A dollar candy-bar treat in the face of filling up the gas tank for nearly $100 can be a powerful psychological motivator,” says James Russo, vice president of marketing for Nielsen’s food sector.

Candy’s reputation for getting people through tough times is long-standing.

During the Great Depression a nickel chocolate bar was sustenance. Some had names such as “Chicken Dinner.”

“Candy bars, during the Depression, were really America’s fast food,” says Steve Almond, author of “Candyfreak,” a book that examines the economic history and allure of chocolate. “They were expressly marketed in a way that would suggest to people that this was a cheap meal.”

Such strategies helped some candy makers and sellers weather those a weak economy.

One of them was the McKeesport Candy, a wholesaler in Pennsylvania that was established in 1927. Now the company does business on the Internet as

But even if consumers are willing to spend, this isn’t an easy time for the candy industry, says Jon Prince, president of both companies.

“Are we going to say that business is easier now that gas is $4 a gallon? Probably not,” he says, noting such factors as the cost of transporting candy.

Recently M&Ms maker Mars bought Juicy Fruit gum-maker Wrigley, and Hershey raised prices and laid out plans to close several U.S. plants.

But smaller specialty shops make the type of high-end chocolate stay-at-home mom Nancy Bason seeks out.

A recent craving prompted her spontaneous visit to Sarah’s Pastries & Candies in Chicago’s Lincoln Park neighborhood that specializes in French-style chocolates.

“I don’t buy chocolate every single day,” says Bason, who lives nearby. “So if I’m treating myself once a week, it doesn’t seem like I really need to cut back because it’s not an everyday purchase.”

She says she’s much more likely to forgo the expensive latte and is also holding back on buying clothing and big-ticket items such as appliances.