11 Big Trends in Confection
By CSP Staff on Apr. 21, 2017CHICAGO -- Health and wellness aren’t the only things catching consumers’ eyes these days. People still want to satisfy their sweet cravings with chocolatey, chewy and melty treats. So it’s no surprise that, with data from Nielson and IRI, CSP’sCategory Management Handbook reports that candy sales and units are on the rise.
This special report looks at what’s driving success in the candy category, from the overall trends to the fast-growing products to the insights that may lead to future growth.
The Trends
Despite the buzz around better-for-you products, consumers still have indulgent cravings. In fact, the global confectionery market is projected to reach $232 billion by 2022, according to Allied Market Research, Portland, Ore. Here are three trends moving the needle.
New-product blitz
The year 2016 saw high-profile hits from major brands, including The Hershey Co.’s Reese’s Pieces Peanut Butter Cups and Mars’ Caramel M&M’s. What that means for innovation in 2017 remains to be seen, but big candy brands aren’t resting on their laurels.
Occasion-based treating
Gifting is on the rise. Holidays and candy go hand in hand, sure, but major manufacturers are upping their seasonal games. Expect convenient and innovative twists on old standards to help boost those holiday candy sales.
Go gummy
With new shapes and unique flavors, gummy candy is seeing unprecedented growth. Certainly, strong industry sales could be due to the fast pace of innovation, but retailers are also devoting more space to the segment.
The Fastest Growers
Nonchocolate gained nearly a point (0.8) in share of dollar sales of c-store candy in 2016, according to Nielsen data for the 52 weeks ending Dec. 31, 2016. Chocolate was essentially flat (up 0.1 point from the prior year). But each type had its gainers. Read on …
Chocolate: Twix Caramel king size
Nielsen finds that c-store sales of king-size chocolate rose more than 3% in the 52 weeks ending Dec. 31, 2016. At the same time, standard sales dipped nearly 7%. With an increase of almost 7%, Twix Caramel king size had the largest c-store sales gain among the 10 largest chocolate UPCs. The king-size Reese’s Fast Break and Kit Kat UPCs also had healthy gains.
Nonchocolate: Life Savers Gummies 5 Flavors
Nielsen data shows a 3% increase in sales of c-store nonchocolate candy in the 52 weeks ending Dec. 31, 2016, to hit $5.9 billion. Unit sales were off 2%. Sales growth was stronger in the king package size, with dollars up more than 8% in 2016. Among the leading UPCs, the king-size Life Savers Gummies 5 Flavors grew c-store sales by almost 26%.
Gum: Wrigley’s Extra
Nielsen reported a more than 6% decline in unit sales of gum for the 52 weeks ending Dec. 31, 2016, with sugarless and regular both down about 6%. Six of the top 10 gum brands in c-stores lost dollar sales in 2016, according to Nielsen figures. Wrigley’s Extra c-store sales were an exception, gaining almost 5% in the 52 weeks ending Dec. 31, 2016.
Mints/breath fresheners: Mentos
After strong growth in 2015, c-store sales of breath fresheners cooled off in 2016, with units off nearly 4%, according to Nielsen. Among the leading brands, Mentos defied the decline the most, with a 4% unit sales gain and 10% c-store sales increase.
The Insights
Putting the data into perspective, the expertise and insights that follow may influence strategies for future success in the candy category.
Category-management best practice
If standard-size candy bars were their own category, they would rank as the 15th-largest category overall in c-stores, according to Nielsen figures. They contribute up to $1.3 billion in annual sales, or 23% of total confection sales, for c-stores—larger than the gum and mint segments combined.
That said, c-store sales of standard-size bars have been on a downward trend, which is concerning considering how loyal customers are to certain pack sizes. According to Hershey research, 24% to 29% of c-store shoppers will purchase only a standard-size candy bar and not switch to a different pack size. Meanwhile, 32% to 37% will purchase only a king-size bar.
Category insight
Breath fresheners had a soft 2016, with sales down 1.6%, according to Nielsen figures. Alan Tobin, senior manager of category strategy and insights, c-store/VCFr/specialty/foodservice, for The Hershey Co., says this decline follows strong growth in 2015, when many new, innovative products hit the market.
Consumer in focus
For the candy set, Mars recommends a plan-o-gram with “flavor zones” that efficiently sort brands to fit shoppers’ needs, as opposed to creating vertical blocks by pack type, which could cause confusion at the point of purchase. The flavor-zone approach has a few benefits, according to Mars. They include:
- It leads with power brands.
- It creates larger/better brand blocks.
- In testing, it showed growth for all manufacturers.
- It has shown success in the market.
A recent success
Felix Oliu, former director of category management, center of the store, for Murphy USA and CSP’s 2017 Category Manager of the Year winner in the candy category, shares a success story.
“We decided to take out the Sathers two-for-$1.50 line and implemented the two-for-$2 price point. We saw a significant rise in the dollar-volume increase, as well as the unit increase. The two-for-$2 [price] is perceived as a better value by our customers [and it] does indeed have a better value on a cents-per-ounce basis.”
Check out the 2017 Category Management Handbook.