State of the Industry reflections: John Downs, NCA’s president and CEO interview
John Downs at SOTIC 2024. Pic: Neill Barston
Seeming in relaxed form, John Downs concluded the event with some added notes of motivation for the assembled audience at the State of the Industry Conference in Miami, reaffirming his view that there’s plenty of dynamism and determination that will see the industry within the US through its various supply chain challenges, writes Neill Barston.
Refreshingly, it’s clear that in spite of the complex trading conditions the industry finds itself in, the president and CEO has lost none of his personal enthusiasm for playing a central role in driving the industry’s development. (See our exclusive video review of this year’s State of the Industry event here).
“It’s such an honour and a privilege for me to be in this role. You can just ask my wife or kids. They say ‘dad, you are just all in. You’re all in on chocolate and candy. It’s been the coolest career that I’ve had,’ he smiled, reflecting on his journey to date.
However, as he alluded to earlier in the event, there are indeed some bumps in the sector’s road ahead that are creating headwinds. Some of these factors are ‘bigger picture issues’ including 2024 being a pivotal national election year, with the outcome of the contest – most likely between incumbent Democratic president Joe Biden, and his arch Republican rival Donald Trump, may well have notable ramifications for the segment.
This thorny topic was under the microscope during a key session at SOTIC with leading political analyst George Will (below, centre), who expressed dismay at the complexities of gaining policy results with the much- divided Senate and Congress.
Perhaps the biggest target in terms of policy remains the prospect of gaining sugar programme reform, “which would be the biggest win” if they could attain it, which the CEO notes may potentially finally have a hearing at national level later this year, shortly before November’s due election.
“It’s absolutely critical that we continue our advocacy work in Washington. We have transformed NCA into a mission driven advocacy. That’s what I’ve done in my tenure and it’s critical to the success of our category and our member companies so they can continue to do the things that they do well to grow their business.
“So, for all business leaders, for all companies, for all trade associations, it is a very frustrating time. It’s a frustrating time to be having to do policy and politics and advocacy work in Washington because it is a dysfunctional environment,” notes John, who says that despite such hurdles, the NCA has a strong team in place that is putting in the miles to represent its broad membership base.
While there are clearly some very direct tests ahead including prompting the FDA to engage on tackling pressing regulatory matters such as much-contested state-wide bans on the use of widely used red dyes.
There are also consumer media challenges surrounding concerns raised over trace elements of cadmium found in some dark chocolate, which are collectively being addressed by the sector, giving the NCA’s CEO cause for genuine hope.
He acknowledged that many of the tests that the sweets and snacks business is facing right now are readily found across the food and drink market. With cocoa having tripled in price to present peaks of around $10,000 a tonne, as well as significant spikes in sugar costs, these may be tangibly concerning factors, yet the US ‘can do’ spirit seems very much in evidence in Miami.
“The soaring costs are those two big commodities that presents a big short-term challenge, and that’s an issue. And then there’s the pricing that’s been taking place over the last couple of years, as well as the financial pressures around consumers.
“That’s all converging here. But people are optimistic. We’re very optimistic about what’s going to happen as we move forward in 2024. There could still be some softening and units and volume okay, but the category is still very strong and very vibrant,” reveals the CEO, on its position in being determined to push forward with its ambitious agenda supporting the sector’s continued growth.
Better-for-you options
As Confectionery Production has reported over the past couple of years, one of the fast-rising categories that appears to be very much here to stay is that of the ‘better-for- you’ healthier option segment.
This is something the NCA’s CEO is keenly aware of, and says he’s noticing products in this segment continue to gain traction.
“We’ve had some really good insights on ‘better-for-you’ at this year’s event, looking at how people really think about the category, and people are looking at clean ingredients and what is best for them and their families,” added the CEO, who says that there’s optimism out there in retail stores, which are reportedly working hard on their experiential side of the business to help maintain sales momentum amid a tough market.
He confirmed that a lot of decision making is presently around perceived affordability of confectionery ranges, which he concedes is presently down among consumers (dropping from 74 per cent
last year feeling that their treats were at a comfortable price, which dipped to 55 per cent this year, amid financial pressures, which he felt was symptomatic of the wider challenges in the market. With so much that is happening at present, what does he believe has been the biggest change in the market that he’s seen in recent years?
“One thing that has changed the most is the biggest learning laboratory for all of our lives, both personally, as well as professionally in business was the Covid-19 pandemic. “It’s the biggest thing that’s ever happened to the world, if you look at the performance of this category coming out of Covid, it’s nothing short of remarkable.
“So, if you think about the resilience, and you think about the performance, and you think about the execution it was a great testament to how consumers just really love their treats,” noting that consumers just needed a sense of fun and happiness to get them through one of the most surreal chapters in living memory.
As he observed, one of the key lessons from the pandemic remains that “you’ve got to perform and you’ve got to transform at the same time,” noting that somehow we all perhaps emerged through the other side of such an experience recognising there was plenty of hard work to be done to restore a sense of balance.
New venue, new chapter
Finally, turning his attention to the fast- approaching Sweets & Snacks Expo for this year, he offered an enthusiastic appraisal of its prospects. As he stated, the timing was right for taking the show out on the road from its traditional home in Chicago, with the event already having had a sample of Indianapolis hospitality when it relocated there amid the pandemic to a positive response.
“So the theme this year is big and bold – in a new city and new venue. It’s a really wonderful fit for us there. It’s convenient and very accessible. We’re going to have record attendance, exhibitors and sponsorships, and we’re going to have an amazing experience in Indianapolis. We are all so excited for it, and so is the industry.
