CHICAGO -- Sweet and savory snack junkies from around the globe flocked to Chicago’s McCormick Place from May 22-24 to sample up-and-coming products at the annual Sweets & Snacks Expo hosted by the National Confectioners Association. There was more to do than eat, though, as industry experts discussed what’s trending, what’s flat and the medium between brick-and-mortar and online shopping.
The "State of the Market: Candy and Snack" educational session, led by Larry Levin and Sally Lyons Wyatt, two executive vice presidents of Chicago-based market research firm IRI, covered insights and trends for each segment, areas for growth and consumer behavioral shifts that affect category sales.
Here are nine takeaways from the presentation …
1. Top players remain king
Candy drove nearly $25 billion in sales in 2017, more than a third of which was attained by the top industry brands, such as Hershey, Mars and more. The same goes for snacks, with 53% of last year’s snack sales coming from the top players, including Frito-Lay and Pringles.
2. Private label is gaining attention
Private-label distribution grew 29% in 2017, and retailers are now leveraging all areas of their stores to merchandise these options. More than 83% of millennials say private-label products are just as good as national brands, which is partially driven by consumers being educated on what private label means and what it offers, Levin said. As a result, even manufacturers are launching premium and organic private-label products to reel in consumers.
3. 'Other' options are driving snacking
The top snack drivers in 2017 included:
“Other” salted snacks, products such as Gardetto's, Chex Mix and Harvest Snaps (dollar sales up 28%)
Tortilla chips (up 15%)
Potato chips (12%)
Cheese snacks (12%)
Dried meat snacks (7%)
On-trend snacks featuring portable energy, protein and fiber attributes also are “winning with today’s growing snacking cultures,” Levin said.
4. Nonchocolate leads candy
Candy growth last year came entirely from nonchocolate chewy candy (up 57%), small chocolate boxes (24%) and seasonal candy (19%), Levin said. He foresees candy launches breaking $100 million within the next year.
5. New product appeal is strong
Nearly 5% of consumer packaged goods (CPG) sales in the snack and candy categories last year were driven by new products, and two-thirds of product innovation came from everyday chocolates, according to Levin. He noted “rising star” products such as Hershey’s Gold, M&M’s Caramel, Lay’s Poppables and Kinder Joy as examples. And regarding pacesetters—first-year CPG sales success for newly launched products—Kinder Joy is set to be the largest the industry has ever seen, Levin said.
6. Utilize generational differences
Sales growth for snack and candy categories will rely on younger generations, the speakers said. And for good reason: More than 87% of candy sales growth in 2017 came from Gen X and millennials, and the latter group is driving nearly 50% of snacking growth. These younger generations constantly crave unique flavors and have a broader appeal for snacks and candy than their older counterparts, Levin said. Nonetheless, targeting what older generations want—which depends on the different needs that come with age—may spark even more growth in the categories, since older consumers are a lagging sales demographic for snacks and candy. “Innovation for generations will restore momentum in brick-and-mortar and online shopping,” Levin said.
7. Online is a way of life
Online sales experienced double-digit growth across key snack and candy segments in 2017, and in total, grew 7%, Wyatt said. This is a serious wake-up call for more traditional retailers who haven’t adjusted to 2018 lifestyles. “Online isn’t an alternative strategy,” said Levin. “It’s a must strategy.”
8. Holiday launches can help
Holiday innovation around snacks and candy has driven growth recently and can continue to do so, Levin and Wyatt said. Seasonal candy contributed to nearly one-fifth (19%) of total candy sales in 2017. Not only does this pertain to big holidays such as Christmas and Thanksgiving but smaller ones as well.
9. Authenticity is key
Standing out is vital for garnering consumers’ dollars and loyalty, Levin said. This is attainable through what he calls “influential personalization”—implementing things such as pop-up shops and unique brand marketing to attract patrons. “Consumers love unexpected experiences,” said Levin. “Authenticity is a core ingredient to win today’s shoppers. [You need to] tell the brand’s story.”