NCA projects hope for confectionery markets with its State of Treating report
A major upturn in online trading for US confectionery companies was highlighted among the key findings revealed in the National Confectioners Association’s annual State of Treating report, writes Neill Barston.
The study was unveiled at the organisation’s annual conference, which this year went virtual, and revealed web-based sales of sweets and snacks ranges increased 74.7% year-on-year, to $3 billion amid the pandemic in 2020.
As previously reported by Confectionery Production, this increased trend has extended to artisan markets, with groups including the Fine Chocolate Industry Association successfully launching an online retailing platform for its members.
Overall, sales for last year stood at $36.7 billion, down 0.2%, which was largely attributed to many retail operations being closed as part of imposed lockdown conditions, as the nation grappled with the unfolding covid crisis that has impacted significantly around the world. Based on the results, sales are expected to rise to $39.5 billion by 2025.
By category, chocolate accounted for $21.9 billion of the annual sales for 2020, which was up 4.2% year-on-year, and non-chocolate sweets including gummies were up 2.9% to a value of $11.5 billion, while gum and mint sales were down 22.7%, put at a value of $3.9 billion for the period.
According to the NCA’s report, a total of 20% of consumers are consciously buying confectionery that has been certified, with Fairtrade, Rainforest Alliance and organic being the key labels. This follows separate recent research from Cargill that revealed around 70% of shoppers are willing to pay more for chocolate confectionery with sustainably sourced ingredients.
Despite the market challenges, John Downs (main image), NCA’s CEO offered a keynote address at the State of the Industry Conference (pictured yesterday), in which he offered an upbeat assessment for the remainder of the year. He revealed that he had been ‘blown away’ by the sector’s response to conditions in setting up new online retail channels, which he believed would make a notable impact.
Significantly, he also looked ahead to the 2021 Sweets and Snacks Expo, which has traditionally been held in Chicago, but has switched to Indianapolis for 2021, and said that plans for the event remained on track, with full ‘covid secure’ considerations being put into place to enable it to be staged this June.
While he acknowledged and sympathised with businesses that had endured challenging business conditions over the past year, Downs believed there was a strong spirit of optimism, quipping that ‘when the going gets tough, the tough eat gummy bears’ on how both the industry, and consumers had adapted to life amid a pandemic.
“E-commerce portals had popped up in a matter of weeks (from the start of the pandemic), consumer communication offered creative ideas to spread joy and happiness, even production lines shifted to mask making, and so many products, and dollars and volunteer hours were donated in support of our frontline heroes and those in need. The love and support shown to our country is absolutely astounding and at NCA we were so inspired by your purpose-driven leadership,” he said addressing the confectionery sector, stating that it had been a year of accelerated learning for everyone.
Writing in his introduction to the report, Downs explained that despite some dramatic shifts and changes, two things in particular have remained constant. This included the ‘enduring place chocolate, candy, gum and mints have in our hearts’ and our lives because of the emotional connection we have with them.’
He explained that covid had changed consumer behaviour but not the desire for permissible indulgence, especially when that indulgence was shared with friends and family. Citing a number of examples, he said that social distancing had presented a number of barriers to traditional gatherings, confectionery featured heavily in zoom parties and at-home movie nights, as well as continuing long-established gift giving at key seasonal points including Valentines and Halloween.
Speaking on the release of the report, Downs added: “When we debuted the 2020 State of Treating report at the beginning of March last year, we never could have imagined the tectonic shift in consumer behaviours and the retail landscape that was about to occur,” John Downs, president & CEO of NCA, said. “This year’s report offers an important insight: people turn to chocolate and candy as a special way of bringing us together and play a critical role in finding safe and creative ways to stay connected to those we care about.”
The annual study’s methodology included shopper insights and sales results to provide a dynamic and comprehensive look at the confectionery industry and the special connection that consumers have with chocolate, candy, gum and mints. Presented annually, the State of Treating report offers an integrated look at the confectionery shopper and the trends impacting purchasing patterns.
Its main key findings from the report included:
77 percent of consumers feel that good emotional well-being leads to better physical health and makes it possible to enjoy life and be happier.
61 percent of shoppers changed up their confectionery purchasing patterns during the pandemic.
41 percent of people bought more value packs with individually-wrapped treats.
Households purchasing chocolate and candy online at least twice in 2020 increased 76 percent, and the annual online dollars per buyer increased by 14.3 percent.
“Amidst the uncertainty this year, the confectionery category has remained resilient –which is a true testament to how chocolate and candy remain an important aspect of our collective emotional well-being,” Downs added. “Whether it’s a quick escape for parents from the chaos of balancing work from home with virtual school, a celebration of a milestone moment or simply sending a treat to a friend from afar, chocolate and candy have helped Americans stay connected even when we couldn’t be together.”
The release of the 2021 State of Treating report was made possible by Blommer Chocolate Company, and it coincides with the second year of NCA’s “Thrive in 2025” five-year strategic plan. The plan outlines NCA’s goals, such as strengthening its advocacy and communications capabilities, identifying the disruptive trends of the future, and developing positive and meaningful thought leadership for the industry.