Ups & Downs in the Candy Category

CHICAGO -- Sales trends in the candy category are a "series of ups and downs," according to Larry Wilson, vice president of customer relations at the National Confectioners Association (NCA).

The NCA's annual Sweet Insights road show made a stop in Chicago in late October, providing new research on trends and market factors impacting the confectionery industry. Overall growth is sluggish, up 1.9 percent for the 52 weeks ended Oct. 5, but there are some bright spots:

• Chocolate is up 3.4 percent, fairly consistent with its 2013 gain of 3.9 percent; and 
• Non-chocolate is up 1.9 percent, compared to total growth of 3.7 percent in 2013. 

Gum, however, is still struggling, down 3.8 percent. The segment declined 6 percent in 2013. 

Commodity costs are to blame for a great portion of the challenges the candy category is facing, with cocoa prices up nearly 32 percent and sugar up 20 percent in the United States. Dairy and tree nut prices are also on the rise, particularly hazelnuts, which were nearly wiped out last season.

When it comes to candy consumers, what they are looking for in confectionery remains steady, Wilson said, and this includes value, convenience and experience. The dollar channel is strongly delivering against value, while convenience stores are naturally strong on convenience. The grocery channel is best at delivering on experience.

Experience can innately kickstart the emotional tug consumers have with candy. Grand displays can bring theater to the store be the catalyst for igniting childhood memories, a sense of play, and act as idea generators for entertaining, sharing, gifting and more. Seasons, in particular, make great themes for creating an in-store experience. 

Seasonal candy demonstrates above-average growth, up 3.2 percent in 2013, compared to overall category growth of 2.3 percent. While seasonal candy sales may be impacted by the timing, length and weather of a given season, the general outlook for seasonal candy remains bright, the NCA noted. 

The Sweet Insights event was also an opportunity for Chicago-area confectionery manufacturers, retailers, suppliers and other industry players to meet with new NCA President and CEO John Downs, who was most recently with Coca-Cola Americas. He brings strong political experience to his new position. Fewer than three months into his role, Downs told attendees that his first line of business is to tour the country meeting with major NCA manufacturer members.