Inflation may be taking a bite out of candy sales, but there are still good points.
Let’s unpack the confectionery category:
- The National Confectioners Association predicts: US confectionery sales (including chocolate, non-chocolate, chewing gum and mints) will achieve $44.9 billion by 2026. Last year the category raced $36.9 billion for sale.
- While US confectionery sales are rising 11.3% year after year (in the 52 weeks ending July 10), inflation takes its toll, according to Candy and Snack Today. Growth has slowed to 4.6% in the last four weeks of that period, and according to the consumer price index, the prices of candy and chewing gum have risen 6.9% YoY.
- Non-chocolate candy had the most annual growth in the same period at 14% ($10.3 billion in sales), while chocolate generated the most sales ($17.3 billion) with a slightly slower growth of 9.4%, by Candy and Snack Today. Chewing gum sales grew 13.7% to achieve $2.7 billion.
- Eighty percent of candy purchases are impulsive, according to Advantage Solutions. That could be a problem: a survey from May Jungle Scout found 72% of US consumers made less enjoyable or impulsive purchases due to economic uncertainty.
- In July, Michele Buck, CEO at The Hershey Co., warned the company will not be able to meet consumer demand for Halloween and the holiday season due to capacity constraints. It wouldn’t come as a surprise if other candy makers face similar challenges, especially if inflation and supply chain problems continue to affect commodities.
Why do we care about: The category may have been losing a bit lately, but two of the four big candy holidays are just around the corner. Retailers must give consumers a deal they can’t refuse and use offers and promotions to reconcile impulse buying.