Chocolate candy sales totaled $2.66 billion for the 52 weeks ending Dec. 28, 2014, according to Information Resources Inc. (IRI) data. That’s a jump of 3.2% compared to same period the previous year. Unit sales for the same period totaled 1.83 billion, up 0.47% over the same period.
Meanwhile, non-chocolate candy brought in dollar sales of $1.98 billion for the same period, a rise of 4.37%, while unit sales of 1.55 billion, were up 1% over the previous year.
“Non-chocolate is benefiting from very high growth in the biggest segment, which is chewy candy,” said Jenn Ellek, senior director, trade marketing and communications for the National Confectioners Association (NCA). “Taking up more than one-third of total non-chocolate sales, chewy candy has been on fire. For instance in the last two months of the year, chewy candy grew a whopping 9.5%, compared with breath fresheners at 4%, hard candy at 0.8% and novelty at 1.6%.”
When it comes to chocolate, Ellek noted that gourmet chocolate continues to be a very hot segment of the market, having featured double-digit growth for several fiscal quarters.
Regarding popular flavor trends in 2015, Ellek pointed to sour and tart salts; alternative, natural sugars like coconut; locally-sourced ingredients on the label; and increasingly bolder flavor pairings—“think curry and toffee in one bite and far out spices originating from Japan and the Middle East,” Ellek said.
PRICING WOES
Price increases in 2014 continue to impact the chocolate and non-chocolate categories at the retail level in 2015.
“In the first half of the year, units will be soft,” said Tim Cote, vice president of marketing at Beaverton, Ore.-based Plaid Pantry, which operates 109 locations. “The price increase and promotional spending cuts from some candy companies combined with generally weak innovation will be a drag on units until we cycle last year’s price increase.”
The promotion-driven Millennial is always looking for a deal, and that extends into the candy category.
“Pricing is up and the customer is not sure that there is value at the new price point,” Cote said. “We have performed well with items that have been willing to price promote as aggressively with us as they do with grocery.”
Candy customers today, he noted, like bigger sizes.
“We recently added SUP (stand up poly) bags,” Cote said. “There is a general trade up around the store that could extend into candy, but bar sizes are a little off. A 3.5-ounce tablet bar is a little too big.”
SKU count is up slightly at Plaid Pantry stores. As theater boxes have been cut back, bags of all sizes have gained share of shelf.
“People see value in the bigger sizes. The continuing downtrend in standard bars will lead to SKU reductions soon unless something changes,” Cote predicted.
As for non-chocolate sales, sour candy is in high demand from Plaid Pantry customers, but hard candy struggles with shoppers. Meanwhile, seasonal products and other limited-edition items are doing better than they have in years, Cote said. That should lead to more shelf space.
Retailers can capitalize on the extra dollars customers are saving now that gas prices have dropped about $1 per gallon compared to around the same time last year.
“Convenience stores have a great opportunity to market and merchandise against those savings with reminders at the fuel pumps,” Ellek said.
