United States
Confectionery Market
February 2010
U.S. Confectionery Market
Overview
2010 USA Economic Trends
•Recession ending??? GDP grew 6% in 4th Quarter 2009
•Stock market – DJ – 10,500 …and growing
•Retail sales surprise in 3rd and 4th quarter 2009
•Interest rates remain low
•Consumer spending ????
Issues to watch!
•Unemployment still at 10%
•Housing market still down
•Oil prices rising again
•Still difficult to borrow
•Commodity prices head even higher
•Savings rate up – spending down
2010 USA Retail Trends
•Uptick in third and fourth quarter sales
•Shopping trips declined
•Big spending shift to value channels
•Increased coupon usage
•Confectionery seen as a recession resistant category
•Organic sales decline
•What’s going to happen with Holiday retail sales?
•2009 – 3.6% growth (SpendingPulse projection)
•2008 - declined 2.3%
•2007 - 2.4% growth
Cocoa Prices at Historic Highs
Cocoa price per ton
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
2003
2004
2005
2006
2007
2008
2009
Sugar Prices near Historic Highs
U.S. Cents per pound
Refined beet sugar f.o.b. Midwest
50
45
40
35
30
25
20
15
10
5
0
2003
2004
2005
2006
2007
2008
2009
Corn Sweetener Prices near Historic Highs
Corn Sweetener Prices have stabilized but are high by historical standards.
U.S. $ per pound
$30
$25
$20
$15
$10
2003
2004
2005
2006
2007
2008
2009
Commodities Pricing
Milk – significantly lower in 2009
Peanuts – lower than 2008 but increasing
Walnuts – prices jumped at end of 2009
Pistachios – Iranian crop shortages drive prices higher
Almonds
The 2009 U.S. Confectionery Market
The U.S. Retail Confectionery Category generates
approximately $29 billion in retail sales
Retail Sales (NCA projection)
Manufacturers Shipments (NCA projection)
Domestic Manufacturer Shipments
Imports
Exports
$
$29.3
$18.7
$17.9
$2.0
$1.2
%
Change
+3.6%
+3.4%
+3.4%
+0.9%
-1.3%
The retail profit margin is approximately 35% for the confectionery category.
Estimated sales in billions
NCA Shipment Data and Global Trade Atlas Import/Export Data
Chocolate Candy represents approximately
58% of total confectionery dollar sales.
2009 Confectionery Categories Analysis
Category
Retail Sales
$ Billions
Domestic
Shipments
$ billions
Shipment
% Growth
Vs. 2008
Imports
$ billions
Import %
Growth
Vs. 2008
Exports
$ billions
Export %
Growth
Vs. 2008
Total
Confections
$29.3
$17.9
+3.4%
$2.0
+0.9%
$1.2
-1.3%
Chocolate
$16.9
$10.8
+3.4%
$0.8
+11.2%
$0.7
-2.8%
Non-Chocolate
$9.3
$5.2
+5.4%
$1.1
-3.6%
$0.3
Even
Gum
$3.0
$1.9
+1.5%
$0.2
-18.8%
$0.1
+10.0%
This analysis shows figures for 2009 shipments and retail sales.
NCA estimates based on Source:
2008 US Department of Commerce,
Census Bureau 311D, Confectionery Report and
NCA Manufacturer Shipment Reports, IRI Data
Confectionery Sales Steady
Due to price increases in the confectionery industry in 2009 the industry
saw an increase in dollar sales combined with a decrease in tonnage.
$27.4
$25.8
7.1
2003
$28.2
$27.9
7.3
2004
7.6
2005
Dollars Sold at Retail, Billions
2009- US Dept of Commerce 311 D Report and
NCA Manufacturers Shipments
$27.4
$28.2
7.7
7.4
2006
2007
$29.3
7.2
7.1
2008 2009
Pounds Sold at Retail, Billions
2008 Per Capita Retail Sales
$100
$92.91
$80
$60
$52.46
$40
$28.34
$20
$9.54
$0
Total
Chocolate
Non Chocolate
Gum
The average U.S. Consumer spent $93 on confectionery products in 2008
2008 US Department of Commerce 311D Confectionery Report
U.S. Confectionery
The Retail Market
Candy and Gum Ranked 4th
Among Food Categories- December 2009
$ Billions
$0.0
$3.0
$6.0
$9.0
Product Categories
Carbonated Beverages
+2.6%
Milk
+7.8%
Candy& Gum
+4.1%
Cereal
+1.2%
-0.3%
Soup
-1.4%
Cookies
+1.1%
Bottled Juice
$15.0
$13.80
-15.3% $10.80
Salty Snacks
Ice Cream
$12.0
-1.2%
$9.20
$9.10
$6.60
$4.50
$4.20
$4.10
IRI Food, Drug & Mass
Excluding Wal-Mart 12/27/2009
$3.80
Candy and Gum Ranked 4th among 2009 Food Categories in Food, Drug and Mass Outlets
Candy and Gum is the
2nd Largest Snack Category
$ Billions
$0.0
$2.0
$4.0
$6.0
Product Categories
Salty Snacks
+7.8%
Candy& Gum
+4.1%
Ice Cream
-0.3%
Bakery Snacks
$10.0
$9.20
$9.10
$4.50
+1.1% $4.10
Cookies
Snack/Granola Bars
$8.0
+3.0%
$2.40
$1.10 +6.1%
Dry Fruit
$0.50 +5.8%
Misc. Snacks
$0.40 +7.6%
IRI Food, Drug & Mass
Excluding Wal-Mart 12/27/2009
2009 Retail Channel Performance
Based on 52 Week Sales – Ending December 27, 2009
Channel
Supermarkets
Wal-Mart
Mass X Wal-Mart
Convenience Stores
Drug Stores
*Warehouse Clubs
*Dollar Stores
Vending
*Bulk
2009 $ Sales
$4.9
$4.0
$1.4
$4.6
$2.8
$2.5
$1.2
$1.1
$1.2
2009 % Growth
+5.7%
+3.4%
+2.2%
+3.0%
+3.0%
+4.7%
+6.1%
-1.9%
+2.1%
The confectionery retail market grew across all trade channels but supermarkets, dollar stores, and
warehouse clubs outpaced the overall retail market in 2009.
* Indicates NCA estimate
•Source: NCA estimates based on input from Information Resources, Inc.
NCA/CMA Monthly Shipment Reports and U.S. Department of Commerce.
•Sales Figures in billions
Confectionery
Seasonal Merchandising
What Affects Seasonal Sales?
•Date/Day of Holiday
•The Economy
•Consumer Confidence
•Merchandising Strength/Visibility
Confectionery Seasonal Sales
(** in millions of dollars)
2006
Valentine’s Day - $971
Easter $1,884
Halloween $2,146
Christmas $1,389
2007
$1,036
$1,987
$2,202
$1,420
2008
$1,024
$1,846
$2,209
$1,376
2009
$928
$1,990
$2,207
$1,401
2010 projections *
$935*
$1,970*
$2,225*
$1,420*
* – projections for 2010
Results and Projection as of February 2010
Source: Sales figures are compiled by National Confectioners Association
based on input from Information Resources, Inc. NCA/CMA Monthly Shipment
Reports and U.S. Department of Commerce
Seasonal confectionery
sales grew
1.2% in 2009
Seasonal Confectionery Trends
2010
2009
2008
2007
2006
2005
VALENTINE’S
+0.7%* -9.4% -0.2% +6.7%
+0.1%
-4.0%
EASTER
-1.0%* +7.9% -7.1% +5.4%
+7.0%
-7.6%
HALLOWEEN
+0.8%* Even
+0.1% +2.6%
+2.8%
+2.3%
CHRISTMAS
+1.4%* +1.8% -3.1% +2.2%
+1.0%
+2.4%
* IRI FD&M
NCA projects a 0.4% increase in 2010 for total seasonal sales.
Holiday Dates/Days
Holiday
2009
2010
2011
2012
2013
Valentine’s
Sat.
Sunday
Monday
Tuesday
Thursday
Easter
4/12
4/4
4/24
4/8
3/31
Halloween
Sat.
Sunday
Monday
Wed.
Thursday
Christmas
Friday
Sat.
Sunday
Tuesday
Wed
Thanksgiving
11/26
11/25
11/24
11/22
11/28
Shopping Days
29
30
31
33
27
Indicates positive date for holiday sales
Indicates neutral date for holiday sales
Indicates negative date for holiday sales
U.S. Confectionery
Trends
Trends - for 2009/2010
•Core mass brands grew in units and dollars
•Consumers moved to value channels and value brands
•Seasonal sales rebound with improving economy
•Dark chocolate sales continue to grow but at a slower pace
•Dark chocolate sales increased 9% in 2009
•Everyday gourmet chocolate flat in 2009
•Consumers want gourmet product at a value price
•Emerging trends in 2010
•More private label chocolates
•Upscale private label/gourmet packaging
•Mass brands introducing more dark chocolate items
•Exotic chocolate flavorings: citrus, spice, salt, fruits
•High cocoa content chocolates
•Gourmet packaging for chocolates
Trends - for 2009/2010
•Value products grew significantly
 Nut/Coconut Candy grew 12.1%
 Gummies and chewy candy grew 11.6%
 Licorice grew 4.7%
 Theater Box candies grew 6%
 King sized candies up significantly
•Sugar Free gum - +7.3% sales
 Exotic fusion flavors
 Fortified products
•Seasonal candy increased in in 2009
 Reflection of difficult economy
 More favorable dates in 2009
 Seasonal confectionery will grow 2.0%