NCA president and CEO John Downs shoots for the moon ahead of Sweets and Snacks Expo
John Downs, CEO and President of the National Confectioners Association, takes inspiration from the Apollo moon landings at SOTIC. Pic: NCA
The State of the Industry Conference in Miami, organised by the National Confectioners Association, proved an exceptionally revealing event, showcasing continued growth for the US industry, as editor Neill Barston discovers meeting John Downs, the organisation’s president and CEO
As the Florida sun shines intensely on the US Turnberry resort amid its opulent palm tree lined surroundings, there’s an infectiously enthusiastic mood amid the latest edition of the annual State of the Industry Conference. With around 700 of the industry’s senior executives gathered to hear crucial updates at the National Confectioners Association (NCA) event, there’s clearly a recognition that while supply chain challenges and increased trading costs are still impacting, there’s a palpable sense of sector determination and buoyancy.
The well-heeled location, fittingly bestowed with a stylish approach drive, featuring staff greeting a steady stream of executive vehicles, is the kind of refined setting that underscores the level of success the region’s market is experiencing. Indeed, as the amiably confident NCA president and CEO John Down joins Confectionery Production for an interview, he’s not long departed its stage to round off the event with a fresh rallying call for the industry to pull together in order to maintain its momentum. For while the US market bucked global trends last year in driving a comparatively high level of growth, 2023’s headwinds are markedly more pronounced.
In spite of this, the region’s dynamic candy industry still managed $42 billion in sales for 2022, powered by the commercial clout of its heaviest hitters, including Mondelēz, Mars Wrigley, Hershey and Ferrero. As for the NCA’s CEO, he appears in fine form, having earlier held court at the event with a memorable opening address channelling the spirit of the Apollo Moon landings, in which the president energetically pronounces “the industry has achieved its moonshot” with the successful Always A Treat Campaign, espousing the merits of responsible enjoyment of confectionery.
“That was our industry “It” and we found it, in terms of meeting our consumers where they wanted to be met, to meet their wants and desires,” enthuses John of the ongoing campaign, which appears to have struck a chord with its huge target audience.
“We did a lot of research, and we knew where we started in 2016, to where we ended up, we had moved the needle. It was a little bit uncomfortable, a bit tough, but it was an achievement. The cool thing about it is the five original companies that were part of it laid the groundwork, but the rest of the industry grabbed the spirit of Always a Treat. They worked on their own different things on innovation in packaging, and on transparency and education. We have been recognised as having a best-in-class commitment to do something that is very meaningful in the marketplace – our retailers embraced this too,” adds the CEO, who notes the ongoing project also offers a valuable boost to consumer confidence, which remains a key factor to the ongoing development of a thriving business category.
As the association president adds, its core messaging is also being amplified through a huge amount of data linked to its State of Treating Report. This offers significant insights into seasonal trends, shopper behaviour and offers a core point of reference for retailers and manufacturers alike. Commenting on the financial performance of the region’s sector, he says that its distinct achievements are not to be underestimated, though he asserts there’s no room for complacency.
“There are a lot of challenges that companies are facing now – they have gross margin pressures, wage inflation, labour costs, and shortage of labour, and within their workforces, they are trying to attract and retain the best and brightest talents. Some of those supply chain challenges are getting a little bit better now, but even given those issues, the demand is there – which is quite a stunning story for the category.” As the conference’s data-led sessions reveal, this year’s candy market performance is maintaining its upward trajectory despite wider economic disruptive forces that are impacting regionally, and globally. The issue of inflation is a particularly concerning one for the wider business, as it seeks to balance the needs of responsible sourcing, and engaging with retailers, distributors and consumers with an ever-changing array of new products.
Though there may be key sector-wide matters weighing upon the category, such as increases in logistics costs and product ingredients, as well as responding to health campaigners’ notably vocal lobbying over dietary concerns, it seems there’s a commendable ‘can-do’ spirit of resilience prevailing amid the market.
“We’re upbeat, and that’s in our DNA, it’s something we represent as an industry, and that’s why it is so unique and special,” he says of the candy business as a whole.
While the overarching tone of the conference feels very much like a genuine family celebration, there are some serious moments touching on topics of concern which the NCA is keenly aware of.
Moreover, the core issue of sustainability, that crops up amid the overall mix of topics at the event, and remains a core wider topic that the organisation is engaging with. Among the most prominent ‘bigger picture’ tasks at hand lies in supporting key agricultural communities supplying chocolate supply chains in West Africa, and addressing associated significant issues of child labour and deforestation linked to activity across a number of industries, including cocoa.
With 1.5 million children still at risk of being engaged in hazardous labour in Ghana and Ivory Coast, it’s a huge issue that does not appear to be significantly diminishing in scale, even with the present efforts of governments and industry. Significantly, with environmental and social welfare concerns being highly valued by consumers, it is little wonder that such topics on transparency, traceability and sustainable sourcing are being taken to new heights in terms of increasing awareness on the part of consumers.
Linked to this, John adds there’s a strong focus on dialogue with the World Cocoa Foundation (WCF), and some of its senior membership companies including Barry Callebaut, in tackling core industry concerns. “So, we are working very closely with the WCF in a collaborative way to address issues within cocoa and chocolate markets. This includes what is happening in Europe on due diligence legislation, and also in the US at Capitol Hill related to deforestation. “Our Chocolate Council is the lead working group as it relates to the NCA, and we had a robust meeting here at SOTIC, talking about all the issues around cocoa, such as sustainability.
It’s a big agenda, and it is complicated, as we have the origin countries, the political regulators, and decision makers in Europe, the ecosystem of NGOs in Europe and the US, so we are putting a lot of work into this, and so are the companies. We all have a role to play – there’s real rigorous co-ordination between companies, brands and NCA and WCF.” Regarding whether the US might adopt the present EU strands of legislation relating to both deforestation and supply chain sustainability, he says “It’s possible it could happen here in a different form,” in relation to key regulations that could significantly influence how confectionery is bought and sold within the region.
Engaging with businesses
As the CEO states, it’s his organisation’s role to provide a broad forum for discussion among manufacturers, suppliers and retail partners, who collectively inform the wider sector’s evolving standards in best practice and enhancement of operating standards. He says that in delivering such a platform for education and awareness, he is optimistic the sector will continue to respond and enable genuine solutions to such ongoing major issues.
“I think that companies, particularly larger ones, have put together a really good set of metrics against the things that are really important around all this. “So, we share that with our small and mid-sized companies, so that we can educate them as well. We know that for ‘Gen Z’ and millennial consumers aged 18-40, these topics really matters, as they want products that match their values,” acknowledges the CEO, who recognises the importance of such broader policymaking that influences the future shape of the sector.
This is especially the case in relation to its high-level advocacy work with the US government, which it demonstrates through maintaining a keen interest in regulatory affairs on a national level. This has led to the NCA joining in lobbying with the sector on reforming access to sugar markets, amid increasing price rises. There are also some lighter moments too, such as engaging with the White House and its US leader.
As John notes with amusement, a recent meeting with president Joe Biden, saw him exchange jokes with the senior Democrat, with Downs revealing a quip that “I told him I had a better job than he did – he just thought that was great, and just turned to me and said, ‘Amen!’ “It was cool, he was very down to earth, very real, and that was our conversation. He asked me about quite a few things that were going on in the business, which was very nice,” he recalls of the good-natured meeting with the US leader.
Such is John’s easy-going manner, he speaks of such occasions with a breezy confidence of someone who has spent decades in industry – having formerly worked at a senior level with Coca-Cola, where he spent a significant period of his career, he understands the complex dynamics of the wider food and drink sector. “As far as influencing policy change goes, it’s a real process, and there’s lots of things that go into that in terms of how an industry puts together its narrative and story.
“But that’s important to have – candy provides a social currency, everyone loves confectionery, it creates the right level of access and interaction with your political leaders – but it doesn’t mean that things will go your way, it takes a lot of hard work, year in year out, it’s about the long game.” Clearly not one to rest on his laurels, it seems that despite all the tribulations of the past few years that have been consumed by coping with the pandemic and its lingering after-effects, there’s plenty more to come from the organisation’s president.
With the flagship Sweets & Snacks Expo taking place for the final time in Chicago around the corner, there’s plenty to feel optimistic about moving further into what is proving an already eventful year. “I can’t believe it. I’ve been here nearly nine years now at the NCA, as time goes by quickly. I feel as If I still have the same amount of energy and enthusiasm for it as when I walked in on day one. So, as long as I have that going, hopefully they will keep me around for a few more years,” concludes the president of his memorable time leading the major candy organisation, keeping a watchful eye over what remains the world’s largest confectionery market.
State of Treating Report
In terms of the State of Treating report itself, it has continued to prove especially influential as a source of category performance data and offers a deep understanding of ever-evolving consumer attitudes and behaviours.
Following the CEO’s address, Elise Fennig, the NCA’s chief of staff and senior vice president of operations, offered key insights from its latest core study. She notes that key findings from the report include that 79 per cent of consumers agree that physical health and emotional well-being are interconnected, and 86 per cent agree it is fine to occasionally treat yourself with chocolate and candy. Furthermore, 78 per cent believe confectionery sharing and gifting are great traditions. Consequently, consumers buy candy in three to four different retail channels, led by supercentre discount stores as well as supermarkets. In addition, 61 per cent of shoppers look for confectionery products they have never purchased before; innovation is important.
Linked to this, 59 per cent of candy consumers have searched social media on Facebook, YouTube and Instagram for confectionery-related content. Transparency is clearly the currency of trust; 43 per cent of consumers in fact prefer to learn about a brand’s ESG efforts from the package label. As the NCA concludes, the report is intended to provide a deeper understanding of consumer wants and needs, corresponding shifts in the retail landscape and opportunities for the future to support continued category growth.
Among the major findings discussed by Fennig was the balance of retailing – noting that while there are now significant e-commerce opportunities across the confectionery market, consumers are still drawn to traditional means of shopping.