Driving confectionery sales through promos, micro-occasions, catchy displays

25-Apr-2024 - Last updated on 25-Apr-2024 at 13:59 GMT

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Related tags Confectionery Chocolate

Consumers continue to buy sweet treats as rewards and to celebrate despite higher prices due to inflation, helping confectionery sales reach $48bn in 2023 and potentially $61bn by 2028, according to the National Confectioners Association’s State of Treating report.

In 2023, confectionery sales reached nearly $48.8bn across vending, online and standalone candy stores, according to NCA’s report per Euromonitor data. The highest dollar growth segments within the category were chocolate ($25.9bn), non-chocolate candy ($19.2bn) and gum ($3.7bn).

In the same year, US confectionery sales reached $35bn in grocery, club, commissaries, convenience, drug and dollar stores, per Circana data as cited by NCA. Chocolate and non-chocolate candy saw an increase in dollar sales by 5.8% and 12.1% from 2022, respectively, due to inflation.

While both chocolate and non-chocolate candy saw a decline in units in 2023, 5.4% and 1.8%, respectively, gum and mints saw a 1.8% growth in units and a 15.4% increase compared to sales in 2022.

Merchandising, pricing strategies to boost sales

In retail, NCA suggests placing confections “front and center online and in-store,” with particular emphasis on endcaps, secondary displays and eye-catching, engaging displays like retail theater.

Consumers rely on price to determine their purchasing decisions, followed by brand loyalty. NCA emphasizes the integration of gifting, brand extensions and innovations to drive brand loyalty in retail.

Sales promotions continue to attract consumers as they spend less, with 41% of consumers shopping for deals in the category. NCA emphasizes the role sales promotions, buy-one-get-one and variety packs can play in providing a range of price points to help drive units in retail.

According to the report, US consumers generally feel that sweet treats contribute to a balanced lifestyle, with 86% emphasizing “that it is perfectly fine to treat,” in addition to 80% of consumers who believe in the interconnectedness between physical and emotional health. NCA emphasizes highlighting portion size variety, nutrition information and treating recommendations on packages, digital assets and in-store displays.

With consumers treating themselves to chocolate and candy two to three times per week, 90% of consumers surveyed prefer to treat themselves to chocolate.

Holidays offer an additional treating occasion for consumers and to drive sales for companies, particularly Valentine’s Day, Easter, Halloween and winter holidays, which account for 64% of total confectionery sales.

With a decline in units for chocolate and non-chocolate candy, brands are encouraged to lean into the season, including micro-occasions between the big four seasons like Father’s Day, Mother’s Day, graduations and National Candy Month in June, in which more than 60,000 retailers participated last year.

NCA projects National Candy Month’s sales has the potential to add $500m in incremental sales to the confectionery category, and help close the sales gap between Easter and Halloween.

Based on Euromonitor data, the US confectionery market is poised for growth with an additional $12.2bn (including the impact of inflation) between 2024 and 2028, with continued growth for chocolate and non-chocolate candy.

“Our new research shows that, even when faced with unpredictable environmental shifts and changes, consumers feel a strong connection to chocolate and candy – and they embrace classic favorites and innovative novelties with an emotional drive that keeps the category fresh and vibrant. Consumers seek out chocolate and candy to help enhance holiday seasons, family celebrations and those important ‘treat yourself’ moments,” John Downs, president and CEO, National Confectioners Association, shared in a statement.