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Industry Dynamics

Market Trends

table 1

The US Market
(in US$ Billions)
WHOLESALE MANUFACTURERS  
Chocolate & Chocolate Type $ 8.1
Non-Chocolate Type $ 4.3
Chewing Gum $ 1.6
Non-Confectionery Items $ 1.6
RETAIL MANUFACTURERS $ 8.2
TOTAL $23.8 Billion

Throughout the beginning of the new millennium, the international confectionery industry can expect continued growth and prosperity. The U.S. confectionery industry (valued at $23.8 billion – see Table 1) enjoys steady expansion spurred by a robust economy and consumer demand for new confectionery products. Canada’s market is also steadily expanding, and currently valued at approximately $5 billion.

The global economic value of the confectionery market (Candy) is valued at $79 billion USD, and is growing at a compound annual growth rate of 0.7%. Sales are lead by the massive U.S. market.

North America is the largest market, valued at $35.9 billion and growing at a compound growth rate of 2.7% (in dollars that is approximately $950 million in growth per year). Leading worldwide growth markets in per capita consumption are Vietnam, Brazil, Ireland, China and the Czech Republic (with increases between 11% to 25%).

The confection industry is one of the better performing categories in the packaged food universe from a unit volume growth standpoint. While more recently the overall growth in the North American candy category has slowed to the single-digit range (up 3% and 5.6% in previous years), it’s still a higher rate of growth than most of the other large packaged food categories and continues to expand.

“Our novelty candy business is outpacing our overall growth," said John Sullivan, vice president at Toys R Us, North America’s largest toy store chain. "When you walk into our stores, it's the first thing you see." Leading the industry is Cap Candy, which has seen sales jump 700 percent since it introduced spinning lollipops in 1993 (Pathfinder Foods carries multiple lines of Cap merchandise).

Table 2


Segments of the Food & Beverage Industry
(in $US Billions)
Refrigerated and frozen foods $195.6
Meat, poultry and prepared foods $128.6
Dairy $ 78.5
Beverage $ 72.5
Snack food & wholesale bakery $ 82.6
Candy & gum (U.S.) $ 23.8

The Herman Goelitz Candy Co.'s Jelly Belly beans got their start as a bulk item, according to Jeff Cox, vice president of sales for the gourmet division that handles all bulk sales. "Approximately 70 percent of what we sell is bulk ... and we are growing in double digits every year."

 "North America's sweet tooth is out of control,'' says Bonnie Liebman, the nutrition director for the Centre for Science in the Public Interest, a Washington-based, nutrition-oriented consumer group. These trade benchmarks clearly speak for themselves. Candy is not a trend that will dissipate; it is not a fad (like pet rocks for instance) that will disappear as quickly as it materialized. Pathfinder Foods estimates that its core market within Canada represents approximately $5 billion per year of total service offerings and with market growth of 3% per year.

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