Experimentation & Occasions Are Key to Candy Sales

CHICAGO — The candy category had a solid first half of 2022 and has plenty of opportunities to finish the year strong despite ongoing challenges. Currently, rising inflation means that dollar sales are outperforming unit volume, experts shared during the 2022 Sweets & Snacks Expo, held May 23-26 at Chicago's McCormick Place.

"In 2021, candy was an absolute powerhouse," Anne-Marie Roerink, president of 210 Analytics, said during her "State of Treating" presentation at the event. She noted that chocolate, which had the best segment performance early in the COVID-19 pandemic, still managed 9-percent growth in 2021, while non-chocolate candy bounced back after a softer year. Overall, candy is performing strongly across retail channels.

Experimentation is key for fueling candy sales — not just old favorites, but new items that catch the shopper's eye, Roerink said. Forty-three percent of consumers report "trying something new" as a reason for buying a different brand, package size or product type. This should encourage further innovation from suppliers and the addition of new items by retailers to their store shelves.

While the four major candy holidays — Valentine's Day, Easter, Halloween and Christmas — remain strong drivers of candy sales, there are many other occasions that can be profitable if retailers properly capitalize on them. This includes events like summer road trips, backyard barbecues, graduation days, and the Super Bowl.

"We have big opportunities," Roerink said. She even encourages retailers to try promoting self-invented holidays, such as S'mores Sundays, with appropriate product displays.

Roerink also shared a list of key pieces of advice that can present store operators with "a world of opportunities":

• In an omnichannel world, impress consumers inside the store.
• Capitalize on continued growth in e-commerce.
• Underscore candy's role in a happy, balanced lifestyle.
• Celebrate all the seasons and create your own.
• Narrow the gap between inspiration and purchase.
• Have fun with social media — you could be the next viral trend.
• Be transparent in all areas of sustainability.
• Proactively address economic pressure.

To decipher between longer-term trends and fleeting fads that will not persist, IRI's Dan Sadler, principal of client insights, noted that families with children have continued to be important to candy sales throughout the pandemic, but that not all families are created equal. Purchase behavior can vary significantly based on economic segmentation.

Therefore, it is important to understand the attitudes of target segments and how they shop to maximize the return on investment of promotional spend, according to Sadler. For example, "savvy shoppers" have a strong economic position and outlook, but strongly care about value, while "optimistics" are in a stable financial position and consider both price and premium quality to be relevant to them.

Convenience stores are experiencing strong quarter-over-quarter growth in candy sales, with chains outpacing independents, according to Sadler. Increased consumer mobility and the lifting of COVID-related restrictions have contributed to this, but a transition to larger package sizes is also playing a key role in fueling c-store sales.

The better-for-you candy segment is worth keeping an eye on, too, as consumers continue to purchase items that support their dietary lifestyles, such as vegan, non-GMO and natural sweeteners. Zero sugar/no sugar added is also an area of strong growth, with year-over-year dollar sales up 132 percent as of February 2022. "It's here to stay," Sadler said.

The 2023 Sweets & Snacks Expo will be held May 22-25 in Chicago.