U.S. Confectionery Market Size, Share & Trends Analysis Report By Type (Chocolate, Sugar, Gum), By Distribution Channel (Hypermarkets & Supermarkets, Convenience Stores), Competitive Landscape, And Segment Forecasts, 2020 - 2025

Industry Insights

The U.S. confectionery market size was USD 36.4 billion in 2016 and is anticipated to gain traction over the forecast period. This can be attributed to the increasingly efforts and money invested on research & development by market players in order to innovation and rebrand their brand images.

Market players are observed introducing healthy snacks such as protein rich bars, dark chocolates with higher percentage of cocoa, and low-sugar content chocolates and chewing gums. Moreover, decreasing cocoa prices in the international market is also acting in favor of the market players.

The increasing development in demand for US candies internationally is primarily propelling demand for the market. Moreover, an accelerating growth in the number of consumers switching to healthy snacks is propelling market players to introduce innovation in their product portfolios.

Market players are constantly facing competition from the increasing healthy snacks market as the population of health-conscious consumers is growing each year. They are turning to fresh fruits, healthy snacks, diet food, and cereal bars, among other snack items. However, market players are observed introducing healthy protein bars, premium dark chocolates, and implementing cross-brand selling within the market to strengthen their market position.

U.S. Confectionery Market Trends

Packaging and labeling are one of the most important factors for confectioners as it has a direct relation to the finished product cost, quality, and shelf life of the products. Laser marking performs the packaging and coding by transforming the substrate surface. The suitability of laser coding on various types of materials used in packaging and high-speed marking makes enabled industry players to speed up their operations, thus helping in generating more output in less production time.

Utilizing new and innovative packaging technology to encourage consumer engagement is expected to drive the market. For instance, in 2017, Nestle launched personalized KitKat pack promotion. They worked on ultimate packaging with an added photo or break phrase of customer’s choice to generate more than 56,000 personalized KitKat packs.

The growing trend of resalable packaging for convenient on-the-go packs is expected to drive the market over the forecast period. Moreover, consumers love the ease of use. Unwrapped and loose candies are a growing trend for extended consumption at home. In 2016, The Hershey Company redesigned ready cases for packaged chocolate candy brands. One-piece design, simpler design, and no cover packaging help retailers to unload and position it in store.

Growing health awareness regarding the harmful effects of chemicals and artificial ingredients used in confections is expected to shift consumer preference to organic products. In addition, increasing government support with various subsidies, and a rising trend of consistency in organic foods are the major drivers of the industry. Government regulations & standards for the identification of organic products also act as major driving factors for the growth of the organic food market.

In the U.S., food or agricultural products are labeled with the term organic, and these products are produced per USDA organic regulations that define standards, which integrate the cultural, mechanical, and biological practices that conserve biodiversity and promote ecological balance. Manufacturers are restricting the use of harmful chemicals and additives in food to produce organic food through reusable resources.

Confections contain various ingredients such as cocoa, cacao, sugars, preservatives, and added flavors & colors. Such confections are regulated by various regulatory bodies around the globe withholding a plethora of regulations owing to the health concerns and safety standards. Owing to increasing awareness regarding health, energy conservation, and the environment, the regulatory bodies are introducing stringent regulatory frameworks. Regulatory bodies such as Food and Drug Administration (FDA) have amended several rules regarding vital role-playing ingredients such as sugar, artificial sweeteners, etc. as well as labeling, packaging, energy conservation, etc.

Type Insights

The chocolate segment acquired the largest market share in the U.S. confectionery market and was valued at USD 20,608.2 million in 2016. The segment is projected to maintain its dominance over the forecast period.

Chocolate segment showcased the highest penetration, owing to the introduction of dark chocolates, organic and alcohol flavored chocolates. In addition, companies operating in the market have introduced chocolates that comprise exotic nuts and fruits. Moreover, they have introduced protein bars and low sugar content chocolate bars.

However, the gum segment is anticipated to grow with at the highest CAGR of 7.3% over the forecast period. This can be attributed to the availability of sugar-free and medicinal quality chewing gums that helps avoid cavity and bad breath. Moreover, chewing gums are also considered as a good exercise for shaping jaws and strengthening facial muscles, which acts as another reason for growing demand for them.

Distribution Channel Insights

The hypermarkets & supermarkets segment dominated the U.S. confectionery market and is expected to reach maintain its dominance in the market in the next eight years.

The primary reason for the dominance of hypermarkets & supermarkets in the U.S. confectionery market is the higher availability of variants in such locations. These stores comprise large space and experience high footfall as compared to other stores. Hence, they possess a larger share in the distribution type segment than other retail outlets.

However, others segment comprising wholesalers, supercenters, club stores, mass merchandisers, gasoline station, and other value stores are expected to witness significant demand. This can be contributed to the changing consumer behavior and changing marketing strategies of market players.

U.S. Confectionery Market Share Insights

The market is highly fragmented with the presence of a few established players holding a significant market share in the market. Prominent players in the market include The Hershey Company, Mars, Inc., Mondelez International, Inc. and Nestle SA, among others.

The top four players in the market together constitute around 50% of the total market share. As a consequence, there is a tough fight between the market players to expand or retain their existing market share.

Switching costs are quite low for both consumers as well as retailers. As a result, there exists a possibility of consumers switching to new products and cheaper private labels available in the market, especially during the times of economic downturns or slowdowns. However, product differentiation bolstered both by inherent characteristics and by strong branding enables players to maintain a hold over customers to some extent, thereby alleviating rivalry.

U.S. Confectionery Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at country level and analyze the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the U.S. confectionery market report based on types, and distribution types:

• Type Outlook (Revenue, USD Million; 2014 - 2025)

  • Chocolate

  • Sugar

  • Gum

• Distribution Type Outlook (Revenue, USD Million; 2014 - 2025)

  • Hypermarkets & Supermarkets

  • Convenience Stores

  • Food & Drinks Specialists

  • Others