Dive Brief:
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Despite deflation that makes growing top line sales challenging, chocolate and non-chocolate combined grew 2% in 2016—exceeding total store growth of 1.5%, according to The Shelby Report. An estimated 5,000 new candy items were introduced in 2016 — up from 2015's 3,500 new offerings — generating nearly $1.5 billion in new sales.
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New items, premium chocolates, chewy candy and shareables helped contribute to a strong 2016. The Shelby Report also reported growth for the entire category in online sales, a trend that is likely to continue and one retailers and manufacturers need to take advantage of in order to grow.
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Despite the strong showing, there were some areas of concern. While dollars grew, units and volume pressure were prevalent. Gum and mints were off, and chocolate wasn’t as strong as it has been in recent years.
Dive Insight:
Candy sales were generally strong across the board. Part of what's fueling the growth is the smart introduction of new products, especially in areas like premium chocolates, chewy candy and even mints.
Still, candy is not the only sugar snack to post a growth in sales. The reason? While 75% of consumers answered an NPR survey last year saying they were eating wholesome food, and similar studies have found almost equal results, people still love to indulge. Most people would rather eat their calories than drink them, according to a Harris Poll, with 87% of consumers preferring to have their calories come in the form of food.
Globally, CPG producers cut sugar and salt from about 20% of their products in 2016, according to Bloomberg. A survey of 102 CPG companies found 180,000 products were reformulated last year — double the amount in 2015. But that hasn't thwarted sales of companies who have doubled-down on sugar. It's likely candy will remain a solid performer for the foreseeable future as consumers indulge and the industry innovates to meet consumer demands.
That's good news for grocery stores, too. Supermarkets could take advantage of America's sweet tooth by expanding their candy selection or prominently displaying these items at high-traffic end caps. Retailers also can grow candy sales by cross-merchandising with flowers, toys and even the likes of barbecue supplies. One uncertainty for candy sales, however, is e-commerce. As more grocery sales move online, it remains to be see now retailers and manufacturers dependent on candy will respond.