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Document Sample
United States
Confectionery Market
February 2010
U.S. Confectionery Market
Overview
2010 USA Economic Trends
•Recession ending??? GDP grew 6% in 4th Quarter 2009
•Stock market – DJ – 10,500 …and growing
•Retail sales surprise in 3rd and 4th quarter 2009
•Interest rates remain low
•Consumer spending ????
Issues to watch!
•Unemployment still at 10%
•Housing market still down
•Oil prices rising again
•Still difficult to borrow
•Commodity prices head even higher
•Savings rate up – spending down
2010 USA Retail Trends
•Uptick in third and fourth quarter sales
•Shopping trips declined
•Big spending shift to value channels
•Increased coupon usage
•Confectionery seen as a recession resistant category
•Organic sales decline
•What’s going to happen with Holiday retail sales?
•2009 – 3.6% growth (SpendingPulse projection)
•2008 - declined 2.3%
•2007 - 2.4% growth
Cocoa Prices at Historic Highs
Cocoa price per ton
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
2003 2004 2005 2006 2007 2008 2009
Sugar Prices near Historic Highs
U.S. Cents per pound Refined beet sugar f.o.b. Midwest
50
45
40
35
30
25
20
15
10
5
0
2003 2004 2005 2006 2007 2008 2009
Corn Sweetener Prices near Historic Highs
Corn Sweetener Prices have stabilized but are high by historical standards.
U.S. $ per pound
$30
$25
$20
$15
$10
2003 2004 2005 2006 2007 2008 2009
Commodities Pricing
Milk – significantly lower in 2009
Peanuts – lower than 2008 but increasing
Walnuts – prices jumped at end of 2009
Pistachios – Iranian crop shortages drive prices higher
Almonds
The 2009 U.S. Confectionery Market
The U.S. Retail Confectionery Category generates
approximately $29 billion in retail sales
%
$ Change
Retail Sales (NCA projection) $29.3 +3.6%
Manufacturers Shipments (NCA projection) $18.7 +3.4%
Domestic Manufacturer Shipments $17.9 +3.4%
Imports $2.0 +0.9%
Exports $1.2 -1.3%
The retail profit margin is approximately 35% for the confectionery category.
Estimated sales in billions
NCA Shipment Data and Global Trade Atlas Import/ Export Data
Chocolate Candy represents approximately
58% of total confectionery dollar sales.
2009 Confectionery Categories Analysis
Category Retail Sales Domestic Shipment Imports Import % Exports Export %
$ Billions Shipments % Growth $ billions Growth $ billions Growth
$ billions Vs. 2008 Vs. 2008 Vs. 2008
Total $29.3 $17.9 +3.4% $2.0 +0.9% $1.2 -1.3%
Confections
Chocolate $16.9 $10.8 +3.4% $0.8 +11.2% $0.7 -2.8%
Non-Chocolate $9.3 $5.2 +5.4% $1.1 -3.6% $0.3 Even
Gum $3.0 $1.9 +1.5% $0.2 -18.8% $0.1 +10.0%
This analysis shows figures for 2009 shipments and retail sales.
NCA estimates based on Source:
2008 US Department of Commerce,
Census Bureau 311D, Confectionery Report and
NCA Manufacturer Shipment Reports, IRI Data
Confectionery Sales Steady
Due to price increases in the confectionery industry in 2009 the industry
saw an increase in dollar sales combined with a decrease in tonnage.
$27.4 $27.9 $28.2 $27.4 $28.2 $29.3
$25.8
7.7 7.4 7.2
7.1 7.3 7.6 7.1
2003 2004 2005 2006 2007 2008 2009
Dollars Sold at Retail, Billions Pounds Sold at Retail, Billions
2009- US Dept of Commerce 311 D Report and
NCA Manufacturers Shipments
2008 Per Capita Retail Sales
$100 $92.91
$80
$60 $52.46
$40 $28.34
$20 $9.54
$0
Total Chocolate Non Chocolate Gum
The average U.S. Consumer spent $93 on confectionery products in 2008
2008 US Department of Commerce 311D Confectionery Report
U.S. Confectionery
The Retail Market
Candy and Gum Ranked 4th
Among Food Categories- December 2009
$ Billions
$0.0 $3.0 $6.0 $9.0 $12.0 $15.0
Carbonated Beverages +2.6% $13.80
Milk -15.3% $10.80
Product Categories
Salty Snacks +7.8% $9.20
Candy& Gum +4.1% $9.10
Cereal +1.2% $6.60
Ice Cream -0.3% $4.50
Soup -1.4% $4.20
IRI Food, Drug & Mass
Cookies +1.1% $4.10 Excluding Wal-Mart 12/27/2009
Bottled Juice -1.2% $3.80
Candy and Gum Ranked 4th among 2009 Food Categories in Food, Drug and Mass Outlets
Candy and Gum is the
2nd Largest Snack Category
$ Billions
$0.0 $2.0 $4.0 $6.0 $8.0 $10.0
Salty Snacks +7.8% $9.20
Candy& Gum +4.1% $9.10
Product Categories
Ice Cream -0.3% $4.50
Cookies +1.1% $4.10
Snack/Granola Bars +3.0% $2.40
Bakery Snacks $1.10 +6.1% IRI Food, Drug & Mass
Excluding Wal-Mart 12/27/2009
Dry Fruit $0.50 +5.8%
Misc. Snacks $0.40 +7.6%
2009 Retail Channel Performance
Based on 52 Week Sales – Ending December 27, 2009
Channel 2009 $ Sales 2009 % Growth
Supermarkets $4.9 +5.7%
Wal-Mart $4.0 +3.4%
Mass X Wal-Mart $1.4 +2.2%
Convenience Stores $4.6 +3.0%
Drug Stores $2.8 +3.0%
*Warehouse Clubs $2.5 +4.7%
*Dollar Stores $1.2 +6.1%
Vending $1.1 -1.9%
*Bulk $1.2 +2.1%
The confectionery retail market grew across all trade channels but supermarkets, dollar stores, and
warehouse clubs outpaced the overall retail market in 2009.
* Indicates NCA estimate •Source: NCA estimates based on input from Information Resources, Inc.
NCA/CMA Monthly Shipment Reports and U.S. Department of Commerce.
•Sales Figures in billions
Confectionery
Seasonal Merchandising
What Affects Seasonal Sales?
•Date/Day of Holiday
•The Economy
•Consumer Confidence
•Merchandising Strength/Visibility
Confectionery Seasonal Sales
(** in millions of dollars)
2006 2007 2008 2009 2010 projections *
Valentine’s Day - $971 $1,036 $1,024 $928 $935*
Easter - $1,884 $1,987 $1,846 $1,990 $1,970*
Halloween - $2,146 $2,202 $2,209 $2,207 $2,225*
Christmas - $1,389 $1,420 $1,376 $1,401 $1,420*
* – projections for 2010
Seasonal confectionery
Results and Projection as of February 2010 sales grew
Source: Sales figures are compiled by National Confectioners Association
based on input from Information Resources, Inc. NCA/CMA Monthly Shipment
1.2% in 2009
Reports and U.S. Department of Commerce
Seasonal Confectionery Trends
2010 2009 2008 2007 2006 2005
VALENTINE’S +0.7%* -9.4% -0.2% +6.7% +0.1% -4.0%
EASTER -1.0%* +7.9% -7.1% +5.4% +7.0% -7.6%
HALLOWEEN +0.8%* Even +0.1% +2.6% +2.8% +2.3%
CHRISTMAS +1.4%* +1.8% -3.1% +2.2% +1.0% +2.4%
* IRI FD&M
NCA projects a 0.4% increase in 2010 for total seasonal sales.
Holiday Dates/Days
Holiday 2009 2010 2011 2012 2013
Valentine’s Sat. Sunday Monday Tuesday Thursday
Easter 4/12 4/4 4/24 4/8 3/31
Halloween Sat. Sunday Monday Wed. Thursday
Christmas Friday Sat. Sunday Tuesday Wed
Thanksgiving 11/26 11/25 11/24 11/22 11/28
Shopping Days 29 30 31 33 27
Indicates positive date for holiday sales Indicates neutral date for holiday sales Indicates negative date for holiday sales
U.S. Confectionery
Trends
Trends - for 2009/2010
•Core mass brands grew in units and dollars
•Consumers moved to value channels and value brands
•Seasonal sales rebound with improving economy
•Dark chocolate sales continue to grow but at a slower pace
•Dark chocolate sales increased 9% in 2009
•Everyday gourmet chocolate flat in 2009
•Consumers want gourmet product at a value price
•Emerging trends in 2010
•More private label chocolates
•Upscale private label/gourmet packaging
•Mass brands introducing more dark chocolate items
•Exotic chocolate flavorings: citrus, spice, salt, fruits
•High cocoa content chocolates
•Gourmet packaging for chocolates
Trends - for 2009/2010
•Value products grew significantly
Nut/Coconut Candy grew 12.1%
Gummies and chewy candy grew 11.6%
Licorice grew 4.7%
Theater Box candies grew 6%
King sized candies up significantly
•Sugar Free gum - +7.3% sales
Exotic fusion flavors
Fortified products
•Seasonal candy increased in in 2009
Reflection of difficult economy
More favorable dates in 2009
Seasonal confectionery will grow 2.0%
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