Consumers crave bold flavors, packaging variety

Consumers never tire of candy. Euromonitor data indicates that U.S. dollar sales for chocolate increased 19% between 2007 and 2012, and non-chocolate sales were up 17%. Euromonitor and the National Confectioners Association expect solid growth in the next five years, with the category “adding more than $6 billion in sales between 2013 and 2018.”

(For the full category review, including sales data, click here.)

While chocolate sales will continue to be strong, non-chocolate is the segment to watch in 2014. Modest increases in the cost of cocoa could increase the price of finished chocolate, at the same time non-chocolate prices could dip due to a decrease in the price of sugar. “That could give non-chocolate a pricing edge in the coming year,” said Jenn Ellek, a spokeswoman for the NCA. “There’s an opportunity for retailers to give extra attention to their displays of pegged non-chocolate confections at great prices, while still leveraging the solid sales that chocolate items bring to the table.”

Bold and indulgent flavors, such as a savory and sweet mixes, and the crossover between snacks and confections are recent examples of category homeruns.

Jelly Belly’s Tabasco-flavored jelly beans were a hit last year. “They’re quite spicy and attract a more male consumer,” said Tomi Holt, a spokeswoman for the brand. The company plans to introduce another new, edgy flavor in January.

Unwrapped, bite-sized confections also are a high-growth segment. Mars is adding new sizes to two of its M&M’s flavors: M&M’s Brand Mint Dark Chocolate in a laydown bag and M&M’s Brand Peanut Butter Candies in an 8-oz. stand-up pouch. “Consumers are scooping up these flavor variations, and these new pack types will drive incremental sales and bring growth to the category,” said Larry Lupo, VP sales for the convenience and drug channels at Mars Chocolate North America.

Seasonal sales represent more than half of confection sales for the drug channel, according to Lupo. “Retailers need to incorporate seasonal merchandising and secondary displays to merchandise the category to its best advantage,” he said.

NCA’s Ellek said it is important for retailers to plan ahead with effective seasonal merchandising. “Start early and promote often,” she said. She also cautioned against marking down too early since eleventh-hour holiday sales are huge for the drug channel.