The president of the National Confectioners Association discusses the opportunities for the candy category and changes at the upcoming industry show.
Grocery Headquarters: What is the future of the candy category? Is candy really recession-proof?
Larry Graham: No consumer product has proven to be recession-proof so far, but candy has definitely shown more resistance than other categories. But like most industries, the confectionery category has had to deal with rising costs, including increases in transportation and shipping as well as higher energy costs. In addition, sugar prices have risen so much in the past year that the NCA formally approached the Under Secretary of the U.S. Department of Agriculture to ask for help on allowing more sugar into the U.S. to lower the price of sugar.
Despite all of this, confectionery retail sales have remained a top performer in this challenging economy with an overall increase of nearly 4% this year, which breaks down to about $93 per person spent each year on confectionery products. Confectionery also has one of the highest household penetration rates of any consumer product.
Another indicator that the industry remains strong is attendance at our annual trade show. Attendance was up at the 2009 Expo, while other industries such as automobiles, printing, restaurants and home building all saw declines in their trade shows. We are enthused about this growth but we are not complacent and we continue to make every effort to help our industry expand their sales.
What trends are driving the category’s growth?
With the most new products debuts of any food category, nearly 3,000 each year, we always have new trends to report. Here are some of the top trends that have driven sales this past year and will likely have some staying power in to 2010:
- Sugar-free gum, some featuring fusion flavor profiles or functional benefits, is up 11% in 2009;
- Licorice, gummi and chewy candy sales are all up;
- Increased theater box-style candy sales, as sharing is popular in tough economic times;
- Citrus, spice, salt and fruits combined with chocolate have an exotic appeal and remain popular; and
- Gourmet chocolate sales continue to grow although at a slower pace than in the past two years. Value-priced gourmet chocolates attract today’s consumer looking for a affordable luxury.
Explain the new name of the NCA show.
The All Candy Expo has evolved into an experience that involves so much more than just a show. Three years ago, snack companies were invited to exhibit at our Expo for the first time to address the needs of the majority of our buying customers. Now with more than 80% of our attendees seeking snack products from hundreds of snack exhibitors, it was time that our show name more closely reflected our community. The 2010 Sweets & Snacks Expo may be a new name, but it promises to deliver all of the same quality of the All Candy Expo. It is the largest confectionery and snack trade show in all of the Americas and more than 15,000 industry professionals attend from over 60 countries.
The exhibiting company attendees are comprised of more than 450 exhibitors, consisting of confectionery, cookie, snack and gourmet companies. The retailer attendees come from every major class of trade. Several hundred members of the trade and consumer press attend from all over the U.S. and the world.
Why should retailers attend?
Confectionery, cookies and salty snacks are the largest food product category in supermarkets, enjoying double-digit growth despite the down economy. With $19 billion in sales, supermarkets lead all other channels in retail sales. But c-stores and drugstores continue to grow sales at a much faster pace than supermarkets; that’s why it’s important for supermarket retailers to attend the Expo where they can find the newest, hottest products that will drive additional sales into their channel.
What do retailers need to do in terms of merchandising to build sales?
We realize how important merchandising is to our industry. Our products thrive on display and merchandising. In fact, candy and snack products are the most responsive categories to display. That is one of the main reasons why NCA wanted to offer the industry a place where retailers could find out what display vehicles are working for others as well as learn how merchandising can increase sales.
We are in our third year of offering a dedicated merchandising area at the Sweets & Snacks Expo. The area features not only the top manufacturers of merchandising vehicles, including displays and shippers, but also a gallery of the “best in class” for merchandising solutions. In fact, for the first time we are offering awards for merchandising solutions at the 2010 Expo.