Even when economic times seem a little tough, the candy industry always seems to do pretty well. Candy is one of those sweet indulgences that people use to help turn around a bad day. Since it is also highly affordable, just about everyone is a potential customer of this industry.
There are 300+ different product categories which are currently available in the candy industry and the number of product offerings continues to grow.
According to CSP Daily News, more than 60% of the categories within the candy industry are showing patterns of growth. For 2015, that meant an average store revenue growth of 3.2%, with dollar sales growth from chocolate included in that data. Here are some of the key candy industry trends to expect in the future.
The Growth of Chewy Candy
- Chewy candy has dominated the candy industry for several years with positive growth, including double-digit percentage growth in some years.
- Chewy candy is also the largest non-chocolate industry segment. Product innovation involving sour flavors and new shapes has helped to keep growth stable.
- According to Statista, Skittles are the most popular chewy candy sold in the United States, selling over $178 million worth of candy. Only private label sales have more in overall chewy candy sales.
- Both Starburst [$156 million] and Sour Patch Kids [$106 million] crossed the nine figure sales threshold in 2015.
- Swedish fish, Reeses Pieces, Lifesavers Gummies, Airheads, Jolly Ranchers, and Haribo Gold Bears all had more than $50 million in brand sales in the past year.
- Haribo creates enough chewy gummy bears on the average year that they could be lined up, head to toe, and circle the planet 4 times over.
- As more children gain access to discretionary money to spend, they are more likely to purchase chewy candy as a treat. Children consume 4 chewy candies to every 1 piece an adult will purchase for themselves.
- 50% of consumers report that they did not plan to purchase any candy products when they went to a retail location, but did so anyway. 39% of those purchases were for themselves.
- 59% of consumers in this category report that they want to try new flavors, while another 43% says that they enjoy new textures that become available.
The United States leads the world in candy consumption, purchasing an average of $8 billion each year on these sweet treats. Chewy candies in particular are quite popular outside of the chocolate segments of the candy industry. If the economy stays strong in the next 5-10 years, expect the growth of this candy segment to be particularly strong in the boldest flavors and most unique shapes as households have more income they can spend on these sweet treats.
Why Mints Are the Future
- Consumer tastes are trending over to foods that are both flavorful and spicy. This makes the mint an attractive candy option because it meets both needs.
- In 2015, the mint segment of the candy industry experienced dollar growth of up to 5%.
- According to The Great American Spice Company, there are over 30 different varieties of mint that are available.
- Two of the most popular flavors, peppermint and spearmint, have 70% of their production occur in the United States.
Although mints may not always be the first candy priority, this segment has many savory opportunities which can help it to maintain strong levels of sales. Classic recipes include mint sauces and certain salads which include mint are also becoming popular. Let’s not forget about a mint julep after a long day at the office or the various flavors of mint ice cream that are available. Mint has been a consistent seller and nothing looks to change that in the next decade.
The Domination of Private Label Chocolate
- In 2015, premium and gourmet chocolate products experienced 11% growth. This segment has experienced double-digit percentage growth for several years in a row.
- Look for sales to continue to be strong in this segment as consumers look for GMO-free, fair trade, and other niche gourmet chocolate products.
- Chocolate in this category isn’t just for eating either. According to Fine Dining Lovers, chocolate is also used in spas and for bathing because it is believed that liquid chocolate can help to remove stress and fight water retention.
- Dark chocolate will continue to grow in this category with its real and perceived health benefits. Chocolate bars with over 75% cocoa content have begun to appear on store shelves to take advantage of this trend.
- 70% of shoppers will at least occasionally decide to switch to dark chocolate products from milk chocolate products. Bulk dark chocolate saw a 9% sales increase in 2015.
- In the United States, about 2.8 billion pounds of chocolate are consumed each year. The average American will eat about 22 pounds of candy per year and 50% of it will be chocolate.
- Sales of Hershey’s products in the US, according to Statistia, reached $3.7 billion in the past year.
- The chocolate segment as a whole had $19.5 billion in sales, but there was 20% growth in organic chocolate products compared to a 6.6% increase in retail chocolate products.
- According to reporting from Morkes Chocolates, a recent study indicates that when men crave food, they tend to crave fat and salt. When women crave food, they tend to desire chocolate.
Let’s face it: chocolate is always going to be a dominating factor for the candy industry. The trends for chocolate are consistent, but the products that consumers choose tend to change as socioeconomic conditions change. In times of recession, affordable chocolate products tend to be the most popular. As the threat of recession recedes, consumers look to private label niche chocolate products for a more “luxurious” experience. Assuming there isn’t a recession like in 2007-2009, look for this segment of the candy industry to continue seeing strong sales.
It’s All About the Nuts
- According to an NCA survey, 41% of shoppers purchase chocolate products which include nuts or dried fruit.
- For products that include hazelnuts, real dollar sales were up 9% in 2015. For almonds, real dollar sales were up 4% in 2015.
- Dried fruits added to chocolate saw a 2015 sales increase of 56%.
- Fruit and nut farming in the United States offers $29 billion in total revenues and has seen an annualized growth of 4% over the past 5 years.
- From data supplied by the USDA, 3 of the top 4 US specialty crop exports are tree nuts and the value of these exports exceeds $6 billion. This market has grown 70% since 2010.
- Growing demand for nuts has kept prices rising even though supplies have also been rising, particularly because of health and nutrition demands being a key driver within the candy industry as a whole.
- US consumption for nuts has actually grown faster [102%] than the export marked [82%] in the past 5 years.
The issue for the candy industry when it comes to fruits and nuts isn’t the demand. It’s the water supply. Many of the top products that are used in the candy industry are primarily based on California farming. In February 2015, the statewide snowpack average was just 21% of normal. According to the LA Times, 2016 levels were better at 87% of normal, but 55% of the state remains in either extreme or exceptional drought. If water levels can continue to improve, then this will keep prices rather stable and demand levels high for the candy industry. If not, look for price increases to happen and the industry to adapt by creating more mini candy products that include fruits and nuts instead.
Why Mini Candies Change Everything
- Smaller-sized candies that are presented in resealable packages have had a CAGR of more than 10% globally.
- According to CSP Daily News, the retail sales of mini candies grew by more than $1 billion in the past 5 years and that growth rate is expected to continue over the next 5 years.
- Mini candies also typically dominate the seasonal candy market, which accounts for over 20% of total sales each year. Year over year growth was 8.5% in this category, making it one of the strongest for the candy industry.
- What makes mini candies attractive for seasonal purchases is that their resealable packaging can include holiday-specific items, including shapes, colors, and even flavors that meet religious or cultural needs.
Mini candies also do one other thing: make the consumption of candy feel more guilt-free. Instead of an entire candy bar, a small “fun size” candy with the same flavors can be consumed. As consumers grow more health-conscious, look for even more options in this category to appear to appeal to changing taste preferences. When combined with the other candy industry trends, there will be stable growth in this category and many others in the next decade.
9 Secrets to Increasing Website Visitors and Email Subscribers