The president of the National Confectioners Association (NCA) says nearly 3,000 confectionery items are introduced in the U.S. each year, more than any other food category.
Grocery Headquarters: How is the confectionery category performing?
Larry Graham: Confectionery products remain top performers in the retail sales market. Despite a shaky economy for the past two and half years, sales continue to increase an average of 3% per year, with a nearly 4% gain this past year. Like most industries, confectionery has had to deal with rising operational costs, including increases in transportation and shipping as well as higher sugar and energy prices.
Another indicator of true organic growth in our category is that retail sales are keeping pace with the number of units sold. This translates to the fact that confectionery items are reliable profit generators for retailers. Consumers spend about $93 per person 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 the growth of our annual trade show, the Sweets & Snacks Expo. Attendance was up more than 7% for two years in a row. While we are happy about this growth, we are not complacent and continue to make every effort to help our industry flourish.
What trends are currently driving growth in the category?
Confectionery manufacturers drive innovation more than any other food category. In fact, nearly 3,000 products are introduced each year in the U.S. and 30% of total confectionery sales are garnered from product less than two years old. For the past year, chocolate in all forms has been the driving force behind big sales. Consumer trends also affect sales and retailers should be aware of some key mind-shifts happening at the checkout:
- Consumers seek innovation but are also more aware of product ingredients and sourcing. More and more, they will seek out products that are globally minded (sustainable) and/or locally produced;
- Brands that boast more natural and simple ingredients will garner more attention from shoppers in the store;
- Ethnic buying power is up and retailers need to be aware of their in-store demographic and plan accordingly with bolder flavors and more multi-cultural offerings;
- Superfruits, antioxidants and flavanols are still a hot combination that offers great taste and functional properties;
- Nostalgia and retro candies remain a hit with the more mature demographic who are anxious to share their treats and memories with their own families; and
- On-the-go lifestyles continue to flood the marketplace and demand for simple, no-fuss packaging and consumption will get only hotter in the coming year.
Tell us about the 2011 Sweets & Snacks Expo, being held May 24-26 in Chicago?
The Sweets & Snacks Expo is the largest confectionery and snack trade show in all of the Americas, with 14,000-plus industry professionals attending from more than 60 countries. With more than 80% of attendees seeking to buy snack products in addition to confectionery items, we changed the name of our show last year to more closely reflect our audience.
This year we have committed to providing not only a superior buying/selling atmosphere but also an awesome experience that embodies the “cool factor” of our industry.
With total attendance surpassing 14,000, there are nearly 500 exhibitors comprised of confectionery, cookie, snack and gourmet companies as well as retailers from every distribution channel.
Innovation Alley debuts at this year’s show. This hot new destination in a prominent location on the show floor will highlight the newest producers and entrepreneurs of innovative products who are launching some of the most creative and coolest products in the confectionery and snack industry.
Why should supermarket retailers attend?
Confectionery, cookies and salty snacks are the largest food product category in supermarkets—enjoying double-digit growth despite the down economy. With $21 billion in sales, supermarkets lead all other channels in retail sales in the category. But drugstores and dollar stores continue to grow sales at an aggressive pace. That’s why it is 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 to build sales going forward?
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 the 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.