Candy and snacks: What's in store for retailers
National Confectioners Association: What are the current challenges and opportunities for retailers?
Anne-Marie Roerink: The biggest challenge is the ongoing pressure on income, which isn’t unique to retailers. While the rate of inflation has moderated throughout 2023, current food and beverage prices are much higher than pre-pandemic. Combined with everything else that has become more expensive, many consumers are making changes to how they shop. This includes the amounts they buy and what and where they shop. Price and promotions have become much more important and everyday value formats are reaping the benefits.
That said, the current market is not a race to the bottom, and there are many reasons why consumers are willing to spend more. The top three are 1) holidays and celebrations, 2) personal indulgence, and 3) brands that have earned their loyalty. For this reason, confectionery and snacks have a unique advantage. This explains why chocolate, candy, and snack items have experienced very strong sales over the last few years.
NCA: Candy and snacks have been high-performing categories for many retailers. How can we get the most out of them?
Roerink: Candy and snacks are categories that have unique incrementality. Confectionery, especially seasonal confectionery, can prompt spontaneous purchases. Retailers who leverage endcaps, secondary displays, and the checkout lane are likely to see increases in average cart size. Incremental purchases make the big snack displays during the Super Bowl or Halloween worth the effort. These are key opportunities for retailers to test products at a more aggressive price point and sell at full value throughout the year.
NCA: With shoppers so focused on value, how important is innovation for retailer assortment right now?
Roerink: There is a reason why the Sweets & Snacks Expo, the candy and snack industries’ largest trade event, has grown significantly over the last five years. As retailers realize the opportunity these categories provide, they are making a larger investment in products and trends that align with shopper preferences. While each category has a few big sellers that make up a large part of sales, hundreds of smaller brands represent a smaller but important piece of the sales curve.
That’s what makes the candy and snack aisles so exciting: you can find your favorites and browse for new options. Recent research found parents often purchase different types of candy for themselves than they do for their children. The difference may be chocolate versus candy or sweet versus sour. The options in confectionery are diverse and can accommodate any taste preference. For retailers, these options - including emerging brands - allow for differentiation.
The other opportunity lies in the seasonality of candy and snacks. While a wide assortment may be a challenge for some retailers, having limited-time offerings can inspire and delight shoppers by creating a scavenger-hunt environment that features new items throughout the year.
NCA: Any category or retail predictions? What trends do retailers need to focus on in 2024?
Roerink: Looking at the recent trend lines, we will likely see unit/volume pressure going into 2024. But the good news is that consumer demand is still strong, and we should see trendlines moving in the right direction. Providing various pack sizes can be a strong option for 2024. I also suspect we will see a continued focus on more frequent and aggressive promotions.
NCA: Where can retailers get started if they're interested in maximizing candy and snack sales?
Roerink: Candy and snacks provide a unique opportunity for retailers to differentiate, delight, and convert. In addition to finding locally produced items, retailers should attend Sweets & Snacks Expo to discover the latest and greatest innovations. Having attended myself in the past few years, I always discover items with new ingredients and flavors, both domestic and international. It’s amazing to watch these new trends appear. Sweets & Snacks Expo is where they’re first discovered.
I’ve also noticed that innovation in candy and snacks is a preview to flavor and ingredient change in other categories, like bakery. Sweets & Snacks is a great place to see what’s on the horizon. There’s Inspiration galore, and that's what we need to prompt new ideas and shoppers’ interest.
NCA: What is the Sweets & Snacks Expo? Where can I learn more?
Roerink: Sweets & Snacks Expo is the premier business-to-business event for the confectionery and snack industries. It was specially designed for retailers and distributors and is unrivaled in new product launches, business-building solutions, and innovations in merchandising. Sweets & Snacks features the latest and greatest in the candy and snack industries. The show will be held May 14-16 in Indianapolis, Indiana. Don’t skip the pre-show day, May 13, for the Most Innovative New Product Awards Ceremony and the Supplier Showcase, a chance for attendees to see innovations in packaging, machinery, ingredients and more. You can learn more at SweetsAndSnacks.com.