It is like being a kid in a gigantic candy store.

There are Gummy Bears.

Lollipops filled with bubble gum.

New Heath Bars with a soft-toffee center.

Nestle's new white chocolate candy bar, Alpine.

Miniature Mickey Mouse gum-ball machines that can fit into a pocket.

Imported chocolates filled with hazelnuts, truffle-cream or fruited cream.

Even Willy Wonka is there -- along with the old favorite standby of Hershey Bars, M&M's and Snickers.

It is the annual convention of the National Candy Wholesalers Association, which has turned the ballroom of the Sheraton Washington into a giant confectionary. Alas, the event, which closes today, is open only to the professional sweet tooths of the candy industry, the manufacturers and the wholesalers they hope to sell to.

Nonetheless, the confection convention is the celebration of the public's ever-growing love affair with candy.

Despite an increasing national preoccupation with health and diet, the convention clearly demonstrates that the candy business is thriving in America.

After a sharp slump in the late 1970s and early 1980s, candy consumption is on the rise -- and dramatically so. Last year, Americans ate about $6.8 billion of candy of all kinds, up from the $4.8 billion they ate in 1984, according to the Bureau of the Census. Per person, consumption rose by a pound last year, with the Census Bureau calculating that Americans each ate an average 18.9 pounds a year, up from 17.9 in 1983 and from 16.1 pounds in 1980.

As evidenced by the convention, candy makers are eagerly trying to cash in on America's fast-growing sweet tooth. A record number of 250 exhibitors are hawking their newest products beside the popular standbys, encouraging wholesalers to stock their brands. More than 34 of the exhibitors are new to the convention and many of these were importers that were trying to gain access to this ever growing market.

"The U.S. market is very important to us," says Gary M. Foote, the U.S. marketing manager for Ferrero USA Inc., the subsidiary of the Italian confectioner that does about $1.5 billion in sales worldwide. U.S. sales now account for about only 1 percent of those sales -- thanks to the sale of "tic tac," the small breath mints. But Ferrero is hoping to greatly enlarge the U.S. share this year when it begins its nationwide promotion of Mon Cheri chocolates -- individually wrapped, one-inch chocolate pieces filled with hazelnuts and chocolate creams, to sell for about 20 cents a piece.

"This is an untapped market for gourmet products . . . and a good market to grow in because it is very stable -- politically, economically and wealthily," says Foote.

Ferrero is only one of scores of exhibitors selling gourmet chocolate. Callard & Bowser, the British manufacturer that for years has been selling its English toffees here, is peddling its Chocolate Cremes, filled with coffee, mint or orange flavors in this country for the first time, after selling it to British chocoholics for many years.

Meanwhile, the North Carolina importer Sherwood Foods Inc. is offering the Elana brands of West German and Austrian-made milk chocolates. At the same time, Hershey Chocolate Co. continues to push what it calls its more adult candy line of "Golden Almonds" and "Golden Pecans."

Despite America's love of chocolate -- more than half of the candy consumed in the U.S. is chocolate -- the most conspicuous item at the convention this year is chewy gum drops in any shape, size or flavor. There are gummy bears -- fruit or cinnamon flavored -- gummy worms, gummy snakes (sweet and sour flavor), gummy french fries (lemon flavor), gummy cola bottles (cola flavor), gummy raspberries with crunchy seeds on the outside -- even gummy pacifiers (in fruit flavors).

"In many cases, the average person will never see some of the products available here," says Henry W. Loock, who is in charge of buying and sales promotion for F. A. Davis & Son Inc., the largest wholesaler and distributor in the Washington-Baltimore area.

"The average store has so many feet of space to display candy that many are very reluctant to discontinue a fast selling item for an unknown," Loock explains.

Nonetheless, with candy consumption on the rise, manufacturers are confident that retailers will designate more and more space to sweet-tooth fans.

Candy industry officials point to a number of reasons for their products' renewed popularity. For one thing, they note, manufacturers have responded to consumer complaints about ever smaller candy-bar sizes and have increased the size while keeping prices relatively stable in the past two years.

But even more significant, industry executives unanimously note, is the industry's massive promotional campaign touting the benefits of candy, after years of being derided as junk food.

"Candy is not just something that gives you pimples, makes you fat or rots your teeth," says an M&M marketing executive. In fact, candy industry officials say, recent research now shows that candy does not give you pimples. What's more, they are quick to claim, it is even easy to include candy in any well-balanced diet aimed at losing weight. To make their point, many single out a 1200-calorie-a-day diet being publicized by the candy industry that permits a dieter to eat a chocolate bar every day.

Largely to make the point that candy can be a wholesome snack -- even to physical fitness fanatics who want a quick source of energy -- M&M/Mars was one of the sponsors of the 1984 Olympics.

"Its sponsorship helped our whole industry," says Ferrero's Foote. "It helped trade up candy's image from something just for children to an adult food" as well.

To maintain that image, the candy industry this fall will launch a $500,000-a-year new "Confections are Happiness" advertising campaign, touting the idea that candy is not only a permissible snack but also the ultimate dessert.

Further enhancing candy's image is the price tag for the increasing number of expensive confections on the market. "It's hard to say something is junk at $35 a pound," says Fred Pompa, Ferrero's senior brand manager.

It is the adult market, in fact, that candy makers are most eager to tap. "With children representing a smaller portion of the American population, adults are becoming the major driving factor behind new candies," with new candies as well as advertising being geared to them.

Nestle Co. Inc. introduced its white chocolate Alpine bar with the adult sweet tooth in mind. On sale for a year, it is already the company's second-best seller, the company says. And if there hadn't been shortages of the product -- because of the unexpectedly high demand for new product, "who knows how successful it would be," says one Nestle marketer.

Meanwhile, Tootsie Roll Industries Inc. just last week completed its acquisition of Cella's Confections Inc., famous for its chocolate covered cherries.

Importers, with their hazelnut, praline and fruit-filled chocolates, have been the best positioned to take advantage of the adult market, industry executives say. In the past four years, the value of imported confections more than doubled, from $129.7 million to $286.7 million last year. Much of that increase has been because of the strong dollar, which has made fine chocolate imports affordable in the United States.

At the same time, the Finnish company Huhtamaki has gained a large foothold in the American confection business by buying up three candy makers in 1983 to gain control of the popular brand names such as the Clark Bar, Good & Plenty and Milk Duds.

For the most part, though, most importers are limiting their sales to specialty gourmet stores and fine department stores.

Ferrero, however, with its nationwide television promotion of Mon Cheri this fall, plans to mass market what it immodestly proclaims is "the number one fine chocolate in Europe." (The Mon Cheri nugget sold here, however, will be much different than the one sold in Europe, where the chocolate is filled with an alcohol-laced cherry. Because it is illegal to import or transport across state lines liquor-filled candy, Ferrero had to reformulate the nugget before it was sold here. The company chose the hazelnut filling because it had an "upscale, rich taste," Foote said. Nonetheless, Ferrero will sell the candy in all stores, even gasoline stations and 7-Elevens. "There's no place we won't sell this product," says Foote, claiming that the company is the first to mass market fine chocolate.

Despite its eagerness to increase its share of the U.S. candy market, Ferrero officials note this country is not an easy one to enter on a full-scale basis.

"This is a very very difficult country to enter," says Foote. "It is an enormous, confusing market that requires great investment levels. You have to advertise in at least 200 television markets -- where in Germany, where Ferrero is the leading candy, all you need is a half dozen to blanket the country. In Germany, if you get your product placed in two grocery chains, you have almost complete distribution. Here there are 50 substantial grocery chains."

Although Ferrero is determined to overcome these difficult physical logistics, it has no desire to enter the candy-bar market, which accounts for nearly two-thirds of all confection sold.

"The candy-bar market here is dominated by two major manufacturers [Hershey's and M&M/Mars]," notes Foote. "Both are sophisticated marketers, with highly developed brands." Year after year, both companies continue to have their products lead the top-10 candy bars in America.

Despite Ferrero's reluctance to battle the two giants, who together hold about a 73-percent share of the candy-bar market, some confectioners are gearing up for a fierce competitive battle.

A year and a half ago, Nestle acquired a number of once well-known brands that had largely disappeared from the market: O'Henry, Bit of Honey, Raisinettes, Goobers and Chunkey, among others. Nestle has since reformulated and repackaged those products as well as reconstituted its 100 Grand Bar (renaming it from the $100,000 Bar) in the hopes of becoming a bigger player in the confection industry. With none of its bars -- not even Nestle Crunch -- in the top 10 sellers, Nestle is determined to crack the list soon.

"There are a lot more chocoholics out there than you and I could possibly believe," says Alan MacDonald, president of Nestle Food Corp.

Meanwhile, L. S. Heath & Sons Inc., hard hit by the success of Hershey's newly introduced chocolate covered toffee bar, has revamped its distribution system to make its product as widely available as Hershey's is around the country. At the same time, Heath has developed a new candy bar that it hopes will appeal to the younger sweet tooths of the country. Instead of the hard toffee center, which Heath believes has turned off many teen-agers, the new Heath bar's toffee center is soft and creamy.

Heath plans to spend $12 million to launch the new bar -- "as far as we know the most ever spent to launch a new [candy] product," according to Frank Garrett, southern regional manager for Heath.

Virtually all candy officials acknowledge that advertising is the key to success. "Manufacturers will have to have more creative promotion ideas," a Hershey official recently told a trade industry magazine. "Space is tight, so new product introductions will be even harder."

If any company should know the value of advertising, it is Hershey, which didn't do any until 1970, after it began seeing inroads in its market. Now, Hershey officials credit its large national advertising campaign with tripling the sales of Hershey Kisses over the last seven years.

Trying to gain quick market recognition, a small candy company, Boyer Bros., Inc. -- the maker of Mallo Cup -- has invested more than $500,000 in the soon-to-be released movie "Santa Claus." Boyer's products are mentioned three times in the movie, including a scene where a little boy leaves a dish full of Mallo Cups for Santa. "This will be instant exposure and the fastest way to gain spotlight," said Boyer's president Anthony Forgione, who said he expected sales to be four to five times higher than normal as a result of the movie. Forgione also hopes to promote his products in two films slated to be released during the summer and Thanksgiving seasons of 1986.

Competition, candy officials say, should help all candy sales, pushing them ever upwards. "The industry's turnaround is just starting," says Ferrero's Foote.