Hitting the sweet spot
Whether for comfort, indulgence or novelty, consumers are loading up on candy. Inflation and other worries are not preventing people from satisfying their sweet tooth. Manufacturers are responding with innovative new items while still appealing to shoppers’ desire for nostalgia.
According to the National Confectioners Association, in its 2023 State of Treating Report, in 2022 confectionery category dollar sales grew 11.1% compared to 2021. Citing sales figures from IRI, NCA noted that chocolate dollar sales increased 9.4% in the 52 weeks ending Feb. 26, while non-chocolate dollar sales increased 14.6%.
“It’s evident when consumers treat themselves, they want premium, and they are also reaching for the excitement of the non-chocolate segment,” said Lou DiMarco, executive vice president for Hilco, which makes Warheads Popping Candy, licensed candy and other treats.
DiMarco pointed to some innovative launches last year, such as mini candy cones with chocolate-filled centers, gummies with dextrose and new brands joining the popping candy segment. “It’s out of the box thinking,” he said. “These types of items are spurring new impulse sales in older categories.”
Non-chocolate leads the way
Manufacturers of non-chocolate items are enjoying much growth. “Overall we’ve seen a very good 2021 and a fantastic 2022,” said Jeff Greenwald, marketing manager at CandyRific.
Candy is the perfect moderately priced treat, so inflation has little effect on sales. “If something went from $2.49 to $2.99, it wasn’t a blow to your wallet,” Greenwald said.
He added that much of the growth comes from the emerging consumer segment of “kidults,” or adults who purchase products designed for kids. For these consumers, and kids, CandyRific offers candy fans featuring licensed characters from Star Wars, Marvel and Nickelodeon.
While nostalgia is appealing, so are new products. According to the NCA report, 61% of candy shoppers look for confectionery products they have never purchased.
“The candy category is in very good shape,” said Robert Swaigen, vice president of global marketing for Jelly Belly. “Innovation continues to be an important driver of category success.”
Swaigen added that among the trends driving innovation are global flavors of food and beverages, many of which translate well to confections.
Other consumer trends
Seasonal sales activity is a big driver in candy sales, especially post-pandemic, as people reunite socially. “Overall, consumers see candy as an integral and fun part of life, in particular to share with friends and family around holidays and traditions,” said Molly Jacobson, director of business development at Frankford Candy. “The growth in the category proves it.”
“Consumers are increasingly interested in snackable, Instagrammable experiences with favorite brands they can share with family and friends,” Jacobson said. “Consumers want products that allow them to share their own twists on how they’re interacting with the candy.”
In addition to visual appeal, consumers also want taste, texture and sound. Frankford Candy introduced Kellogg’s Rice Krispies Candy Bars recently, featuring a combination of crunchy cereal and creamy candy.
Gummies are gaining popularity, and Mars Wrigley expanded its gummies portfolio. Gum, which saw sales decline during the pandemic, is also regaining popularity. “Gum has proven to be resilient,” said Mike Gilroy, vice president of trade development and sponsorship at Mars Wrigley. “As social situations normalized, we’ve seen gum rebound significantly.”
Retailers can drive sales by merchandising the right products that answer current consumer trends. “Categories and brands that cement themselves with growing new rituals and new shopping habits win,” Gilroy said.
For many people, staying home is among the new rituals. “They are doing more of what brings them joy—particularly spending time with family and enjoying home-centric activities like game or movie night,” said Mark Pestana, senior director, team lead drug customers for The Hershey Company. “They are embracing snacking as a part of self-care and affordable indulgence.”
Drug stores have an opportunity to drive sales in the candy category. “Shoppers are seeking value more than ever, but value comes in many shapes and sizes with definitions that range from price sensitivity to convenience driven,” Pestana said. “To reach as many shoppers as possible, drug stores must offer a variety of pack types, sizes, prices, piece counts, etc. to fulfill their shopper’s perception of value.”
Candy as Self Care?
Candy has not exactly been considered a healthful treat, but that may change.
The National Confectioners Association, in its 2023 State of Treating Report, noted that 79% of consumers agreed that physical health and emotional well-being are interconnected, and 86% agreed that it is fine to occasionally treat yourself with chocolate and candy.
Manufacturers say candy can have certain healthful attributes. “We truly believe candy is ahead of a lot of ingredient changes of more natural and more clean ingredients,” said Jeff Greenwald, marketing manager at CandyRific. “Candy is a very enjoyable, very OK-to-eat treat.”
Consumers might soon demand better-for-you options in the candy section, especially in drug stores, where people shop for health-related items as well as treats. Sugar is on people’s minds, and social media trends include sugar challenges, sugar-free products, and insulin-related information. “Consumers will continue to educate themselves on reducing insulin response to the foods they eat,” said Lou DiMarco, executive vice president for Hilco. “Long term that will be a big ask from consumers to the CPG industry in all segments."