Market focus: US confectionery sector faces key challenges amid coronavirus pandemic

The world’s biggest single confectionery market is always an interesting one to observe, but like all others, the US market faces a battle to recover from the effects left in the wake of coronavirus affecting the nation. Neill Barston reports

Having reported on last year’s US Sweets and Snacks Expo in Chicago, it was clear the market was in a strong place from the sheer number of new launches.

Everything from Hershey marking its 125th anniversary, major lines from the likes of Mars and Mondelēz International, through to Ferrero gaining a breakthrough with its own expanded lines, showed a positive growth pattern.

As the single largest confectionery market in the world, it’s where major trends are often spawned, though what translates well on US soil, doesn’t always necessarily work quite as well in other territories.

However, the past year has been a good one for America, with the statistics to prove it. The overall market category value for 2019 stood around $36 billion, which showed a slight recovery over the previous twelve months. According to research from the Euromonitor organisation, the increase in consumers seeking products promoting health and wellbeing has increasingly found its way into the confectionery market for the region.

The US has traditionally been behind Europe in terms of reducing ingredients that are not natural, but from speaking to a number of leading businesses at Sweets and Snacks in 2019, there seemed a general consensus that there was a need to deliver improvements on this area of product development. This has certainly be reflected in consumer studies worldwide (including within America, that have suggested consumers are seeking a greater array of products that have healthier options, or can be easily identified as being clean label, without artificial additives.

Coming into 2020, the signs were equally positive, with the National Confectioners Association unveiling plans for a national candy month in the US (June), which has been just one of its measures to continually help drive product innovation on a considerable scale. However, the US market, as with every other sector of industry, seriously hit the buffers in March with the highly unwelcome emergence of coronavirus.

John Downs, president of the NCA, subsequently made an urgent appeal to the US government that the sector, which directly employs around 55,000 people, needed urgent assistance. In response, the US government agreed a historic financial stimulus package of $1.7 trillion to help stabilise  the economy from a massive health pandemic shockwave.

The effects of coronavirus have been immediately felt with the fact that a total of six million citizens have registered for unemployment in the wake of a near shutdown of the economy as an urgent search for a vaccine for the virus begins.

While physical stores have been forced to temporarily close, some businesses have managed to continue trading online – which has been an increasing area of focus for some of the bigger manufacturing brands. Though quite how long it will take for ‘business as usual’ to continue in the US, and elsewhere, is hard to judge, with events surrounding the spread of coronavirus changing at a considerable pace.

But the NCA has confirmed that in spite of the cancellation of Sweets and Snacks (which serves as the annual focus point for product launches), there will be web-based activity lined-up across the summer that may well ensure a degree of continuity for the industry. However, the loss of the event which was scheduled to take place in Chicago between 19-21 of this month represents a considerable blow to the industry, with so much innovation within the sector typically being unveiled at the trade fair.

For the first time this year, the sector showcase had lined-up an additional day for the event dedicated to equipment suppliers for the confectionery sector, which had included a number of major global machinery, systems and ingredients businesses. Organisers of the event have confirmed that it will return for 2021, between May 24-27 (which will also include the supplier showcase), which will no doubt prove particularly significant for the sector in light this year’s forced cancellation.

 

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