Americans’ may desire healthy, organic and locally grown foods, but their enduring love of candy propelled the confectionary industry to record setting sales in 2013 and more of the same is forecast for this year.
The confectionary industry grew to a record $33.6 billion in sales last year despite challenges such as bad weather, shorter seasons and shoppers’ appetite for value. It was the six consecutive year of sales growth with chocolate, the industry’s largest segment, also growing the fastest as 3.6%. The outlook for 2014 and beyond is very positive, with accelerated growth for the chocolate and gum segments, according to Larry Wilson, vp of customer relations at the National Confectionary Association (NCA).
“We predict continued growth for 2014. A longer Easter period and Halloween falling on a Friday this year signal an encouraging seasonal sales outlook. While the environment remains complex, the market holds many opportunities, including health and wellness,” Wilson said. "The confectionery industry understands that as we grow, so does our responsibility to educate consumers on how candy fits into a healthy lifestyle. By introducing front-of-package labeling, marketing responsibly where children are concerned and offering portion-controlled products, we are reminding shoppers what they already know: confections are a little indulgence that can very much be a part of a healthy lifestyle."
The confectionary industry’s stead growth helps explain why once again the NCA expects record participation in its annual trade show, the Sweets & Snacks Expo, taking place May 20-22 in Chicago. More than 15,000 people are expected to attend the event which includes roughly 630 confectionary and snack companies.
While in Chicago, some of the key topics that will be top of mind with attendees can be found in a recently published performance review published by the NCA. For example, the trade group found improvement among key metrics such as sales, trips, buyers and per capita consumption, in addition to a strong execution of the four big seasons of Valentine’s Day, Easter, Halloween and the end-of-year holidays. Other noteworthy findings included:
• Sales per capita improved 3.9% over 2011 to $106.19.
• Seasonal performance was strong with an overall growth of 3.2% for candy. Halloween, the largest season, grew the fastest at 5.2%, followed by Easter and the end-of-year holidays.
• Chocolate indulgence was a winner, with white chocolate up 14%, followed by dark at 9%. Milk chocolate remains the largest segment and grew $409 million in 2013. Chocolate combined with fruits and nuts is popular as well. Chocolate products containing almonds and hazelnuts, for example, grew 16% versus year ago.
• Confections won more trips and gains were achieved across channels to include grocery, dollar and club. These channels also increased the number of buyers last year by more than one million people.
• Grocery, which is the largest segment for confections, also grew the fastest with an increase of 3.2% compared to a year ago.
• Shoppers purchase confections across many different channels ranging from their primary grocery store to vending machines and online. Twenty-four percent of shoppers at least sometimes buy confections online, predominantly specialty candies they cannot find in stores.
• Brand and mood lead the confections purchase decision tree, making variety (including new item introductions) and regionality very important to growing sales. In 2013, retailers added some seven new items across channels that generated $890 million in new item sales.