Confectionery innovation thrives, despite recession

Cocoa, sugar and corn sweetener prices are near historic highs. Consumer spending has declined and commodity prices have risen. Thanks to the worldwide recession, confectioners are not only presented with new challenges, but also with opportunities.

According to the National Confectioners Association’s (NCA) 2008 Industry Review, based on data from Information Resources, Inc. (IRI), candy and gum ranked third among 2008 food categories, and first among snack categories. Furthermore, in 2008, manufacturing dollar sales for the chocolate, non-chocolate and gum categories grew 1%, as estimated by the NCA based on the U.S. Dept. of Commerce MA 311D Report and NCA Monthly Shipment Reports. Although the confectionery industry might seem recession-resistant, it’s still encountering recessionary pressures.

For instance, seasonal candy sales decreased last year thanks in part to the economy and also to unfavorable dates, the NCA reports. Based on Dec. 12, 2008 IRI data, Valentine’s Day sales decreased 0.2%, Easter sales decreased 7.1%, Christmas sales decreased 3.1% and Halloween sales increased just 0.1%. However, the NCA predicts a 2% increase in seasonal sales this year.

Although the recession has made its mark on industries across the board, it’s not stopping innovation. Instead, it’s creating new opportunities.

As a result, consumers are looking for value-added products, like theater box candies. In fact, licorice grew 9.4% while gummy and chewy candy increased 7.6% in 2008. Additionally, everyday gourmet chocolate sales rose 28%. And the dark chocolate trend is still holding its own, but at a slower pace, the NCA reports. Dark chocolate grew 12% last year.

Trends for 2009, as predicted by the NCA, include exotic chocolate flavorings, such as citrus, spice, salt and fruits, high cocoa content chocolate, single origin chocolate and gourmet packaging. In the sugar-free gum category, which increased its sales by 11%, trends include exotic fusion flavors and fortified products. The NCA also expects to see more sugar-free and low-calorie product offerings in 2009.

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