Dive Brief:
- Sales for the U.S. confectionery market are expected to hit $35.86 billion this year and $38.19 billion by 2020, according to a recent industry report from Technavio reported on by Food Business News. The firm estimates segment volumes to increase at a CAGR of 0.81% to reach 7.61 billion pounds by 2020.
- To boost growth of the confections segment, manufacturers are making changes to adjust to challenges the market faces today, including "peer-to-peer acquisitions, portfolio diversification through acquisitions, the alignment of indulgences with current consumer trends and international expansion," Food Business News reported.
- A number of trends drive today's confectionery industry: clean labels and natural ingredients; barks, brittles and bites; and bold or unique flavor combinations, such as chocolate and fruit, fruit and nuts or the addition of pink Himalayan sea salt.
Dive Insight:
One of the most visible moves in the U.S. confectionery industry this year was Mondelez's failed attempt to acquire Hershey this past summer. Both companies have since made strides to separately grow their confectionery and chocolate empires, like looking to China as an area of potential growth.
Mondelez has also begun exploring more brand partnerships within its own portfolio, such as pairing Oreo with its European chocolate brand Milka. Hershey has diversified beyond its standard chocolate portfolio to include premium brands like barkTHINS, meat snacks like Krave jerky and dried meat bars and better-for-you, protein-based products under the SoFit line.
Mars, the world's largest confectionery company, has focused on clean labels, particularly the removal of artificial colors, which the company pledged to replace over the next five years. The company has run into challenges finding natural alternatives for brightly colored candies like Skittles, Starbursts and M&M's.
As the confectionery segment becomes more crowded with innovations from major manufacturers and startups alike, packaging is also top of mind for manufacturers hoping to stand out on store shelves. Manufacturers can use innovations to achieve better convenience, demonstrate flavors and appearance or convey branding messages such as "premium" or "classic."