Candy Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,670 candy manufacturers in the US combine chocolate, sugar, and other raw ingredients to produce confections and chocolate-based products. Products consist primarily of chocolate and non-chocolate candies. Chocolate candies include bars, baking chocolate, coatings, syrups, liquors, powdered cocoa, fudge, and covered nuts. Non-chocolate candies include gum, chewy candy, hard candy, jelly candy, licorice, marshmallows, and toffee.
Variability in Raw Ingredient Costs
The cost of raw ingredients used in candy manufacturing can vary significantly from year to year, according to trends in commodity prices.
Seasonality
Demand for candy peaks during key holiday periods, with nearly two-thirds (64%) of total confectionary sales occurring during four holidays.
Industry size & Structure
A typical candy manufacturer operates out of a single location, employs 49 workers, and generates about $22 million annually.
- The candy manufacturing industry comprises about 1,670 companies that employ 81,300 workers and generate $36.8 billion annually.
- Chocolate confectionery manufacturing accounts for 53% of industry sales.
- The candy manufacturing industry is concentrated - the top four chocolate confectionary manufacturing firms are about 53% of category sales. While non-chocolate confectionary manufacturing is less concentrated, large firms still dominate - the top 20 companies are 76% of category sales.
- Large companies include Mars Wrigley, Hershey, Nestle, and Tootsie Roll Industries.
Industry Forecast
Candy Manufacturers Industry Growth
Recent Developments
Jul 30, 2024 - Mindful Chewing
- To reverse the longstanding decline in chewing gum sales, Mars Wrigley is launching an international ad campaign that abandons the usual promises such as fresh breath or great taste and emphasizes mindfulness instead, The Wall Street Journal reports. A new ad for its Extra brand claims the act of chewing gum can quell anxiety, improve focus, and boost confidence. While the US gum market rebounded to $3.39 billion in sales in 2023 – surpassing sales of $3.15 billion in 2019 and erasing its pandemic plunge, according to data from Circana, the increase in sales was largely due to inflation, with unit sales falling as prices per unit jumped nearly 50%, WSJ reports. According to Euromonitor, US gum sales peaked in 2010. Mars Wrigley is also trying to get more consumers to purchase gum online by creating purchase opportunities at ecommerce checkouts and devising potential gum subscription products.
- Producer prices for chocolate and confectionery manufacturing jumped 17.7% in May compared to a year ago after rising 8.5% in the previous May versus May comparison, according to the latest US Bureau of Labor Statistics data. The accelerated rise in industry producer prices is driven by the rising cost of ingredients, most notably cocoa. Employment by candy manufacturers dipped 0.7% in May year over year, BLS data shows. After-tax profits for the food industry, which includes candy manufacturers, are declining. Sales for the US candy manufacturers industry are forecast to grow at a 2.21% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to the Interindustry Economic Research Fund, Inc.
- Illinois is one of several US states looking to ban certain food additives found in many popular candies, the National Confectioners Association (NCA) reports. Since California passed legislation last fall to ban four chemicals – brominated vegetable oil (BVO), potassium bromate, propylparaben, and red dye No. 3 – effective in 2027, other states, including New York and Pennsylvania, are considering similar legislation. In April, the Illinois Senate passed the Illinois Food Safety Act (SB 2637) that would ban the four chemicals. “This measure sets a precedent for consumer health and safety to encourage food manufacturers to update their recipes to use safer alternatives,” said the bill’s sponsor, Sen. Willie Preston (D-Chicago). The NCA noted that other states – Indiana, Maryland, South Dakota, Washington, and West Virginia – have rejected similar bills because the proposals lack scientific basis. The chemicals are banned in Europe.
- A trip to the candy store is getting more expensive, driven by increases in the price of sugar, cocoa, and other inputs. Candy and nuts manufacturers and makers of chocolate and confectionery products hiked prices last year, and retail candy prices continue to climb in 2024. Prices paid by consumers for candy and chewing gum were 5.8% higher in February than a year ago, outpacing broader inflation, which was 3.2% in February, according to the US Bureau of Labor Statistics.
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