Transcript Document

United States
Confectionery Market
January 2008
U.S. Confectionery Market
Overview
2007-2008 USA Economic Trends
•Economy slowing
•Retail sales growth down
•Unemployment ends year at 5%
•Up from 4.6% in 2006 but low in historical terms
•Housing market declines affecting job growth
•High oil prices
•Federal Reserve cutting interest rates
•Fears of inflation
•Fear of recession
•Commodity prices higher
2007-2008 USA Retail Trends
•2007 Holiday retail sales slowed
•2.4% growth vs 2.9% in 2006
•Luxury Retailers continue to do well
•Convenience and Drug doing well
•Mass, dollar and supermarket experience slow growth
•Overall retail is growing at a slower pace
High gas pricing negatively affecting all retailers
The 2007 U.S. Confectionery Market
The U.S. Retail Confectionery Category generates
approximately $29 billion in retail sales
Retail Sales
Manufacturers Shipments
Domestic Manufacturer Shipments$17.5
Imports
Exports
%
Change
+3.5%
+3.0%
$
$29.1
$18.9
+2.7%
$2.2
$0.9
+4.0%
+13.1%
The profit margin is approximately 35% for the confectionery category.
Estimated sales in billions
NCA Shipment Data and Global Trade Atlas Import/Export Data
2007 Confectionery Sales
Manufacturers $ sales grew 3% in 2007
Category
Retail Sales
Total
Chocolate
Manf. Sales
%
Lb. Sales
%
$29.1 Billion $18.9 billion
+3.0%
7.2 Billion
+2.3%
$16.3 Billion $10.6 billion
+2.9%
3.5 Billion
+0.3%
Non-Choc.
$9.4 Billion
$6.1 billion
+3.8%
3.2 Billion
+2.5%
Gum
$3.2 Billion
$2.1 billion
+4.1%
0.6 Billion
+0.1%
NCA Estimates base on U.S. Dept. Of Commerce MA311D Report and NCA Monthly Shipment Reports
2006 US Department of Commerce 311D Confectionery Report
2007 NCA Monthly Shipment Reports through October 2007
2007 Confectionery Sales
Retail Sales Summary
Trade
Measured
Total Sales
Confections
% Growth
vs. 2006
Chocolate
Confections
% Growth
vs. 2006
Non-Chocolate % Growth
Confections
vs. 2006
Gum
% Growth
vs. 2006
FDMx
$8.5 billion
+3.5%
$4.9 billion
+3.5%
$2.4 billion
+1.3%
$1.2 billion
+8.1%
FDMW
$12.0 billion
+4.6%
$6.7 billion
+5.0%
$3.5 billion
+2.3%
$1.8 billion
+7.5%
FDMWC
$16.5 billion
+5.0%
$8.5 billion
+5.3%
$4.9 billion
+2.4%
$3.1 billion
+8.8%
All Others
$12.6 billion
*
$7.8 billion
*
$4.5 billion
*
$0.2 billion
*
Total Sales
$29.1 billion
$16.3 billion
$9.4 billion
$3.2 billion
Trade Channels:
F – Supermarkets
D – Drug Stores
M – Mass Merchants
W – Wal-Mart
C – Convenience Stores
NCA Estimates base on U.S. Dept. Of Commerce MA311D Report and Information Resources, Inc.
2006 US Department of Commerce 311D Confectionery Report
2007 IRI Reports through 12/30/07
2006 Per Capita Retail Sales
$100
$93.92
$80
$60
$52.16
$40
$29.77
$20
$9.05
$0
Total
Chocolate
Non Chocolate
Gum
The average U.S. Consumer spent $94 on confectionery products in 2006
Department of Commerce Data is released in late summer. Please return in August for actual 2007 data.
2006 US Department of Commerce 311D Confectionery Report
Chocolate Candy represents approximately
56% of total confectionery dollar sales.
Confectionery Categories Analysis
Category
Retail Sales
$ Billions
Domestic
Shipments
$ billions
Shipment
% Growth
Vs. 2005
Imports
$ billions
Import %
Growth
Vs. 2005
Exports
$ billions
Export %
Growth
Vs. 2005
Total
Confections
$29.1
$17.5
+3.0%
$2.2
+4.0%
$0.9
+13.1%
Chocolate
$16.3
$10.4
+2.9%
$0.8
+5.4%
$0.6
+16.6%
Non-Chocolate
$9.4
$5.0
+3.8%
$1.3
+2.6%
$0.2
+13.6%
Gum
$3.2
$2.1
+4.1%
$0.1
+7.7%
$0.1
-15.3%
The value of imported confectionery consumed is slightly under 15%, however much of this is from US
suppliers producing product overseas and then bringing into the U.S.
NCA estimates based on Source:
2006 US Department of Commerce,
Census Bureau 311D, Confectionery Report and
NCA Manufacturer Shipment Reports
The Confectionery Market is Very Diverse
Next 6-10
12%
There are more than
300
domestic confectionery
manufacturers
Next 11 -30
9%
Top 5
70%
Private Label
3%
All Other
6%
Manufacturer Market Share Concentration
•
The confectionery category is much more diverse than other similar sized food categories.
•
Most food categories are represented by less than five companies.
•
There are 300+ suppliers competing for the remaining 30% of confectionery sales.
•
The uniqueness of the confectionery category is that each suppliers makes distinctly different items
catering to the diverse tastes and demands of the consumer.
52 Week Sales December 30, 2007
Dollar Sales IRI TOTAL U.S. - F/D/MX
Continuous Growth of Confectionery
Total value and pounds of confection sold at retail has increased
consistently over the past five years
$24.0
$24.4
$25.8
$27.4
7.0
6.7
7.1
2001
2002
2003
Dollars Sold at Retail, Billions
$27.9
$28.2
7.3
7.6
7.7
2004
2005
2006
Pounds Sold at Retail, Billions
Department of Commerce Data is released in late summer. Please return in August for actual 2007 data.
2006- US Dept of Commerce 311 D Report
U.S. Confectionery
The Retail Market
Retail Confectionery
Market Share by Trade Channel
Warehouse Clubs*
7.6%
Bulk
5.4%
Vending
4.2%
Dollar Stores*
2.9%
Others
24.9%
Drug Stores
8.6%
Mass X Wal-Mart
4.7%
Supermarkets
15.3%
Wal-Mart
11.4%
Convenience Stores
15.0%
*estimates
* * Others include: department stores, food service and ingredient sales, fundraising, give-aways,
independent grocers, mail order/internet, military, specialty/candy stores, theaters and concessions
NCA 2007 estimates based on IRI, U.S.
Department of Commerce, MSA
Vending Data, NCA Shipment Report
and other industry sources.
2007 Retail Channel Performance
Based on 52 Week Sales – January - December 2007
Channel
Supermarkets
Wal-Mart
Mass X Wal-Mart
Convenience Stores
Drug Stores
*Warehouse Clubs
*Dollar Stores
Vending
*Bulk
2007 $ Sales
$4.6
$3.5
$1.4
$4.5
$2.6
$2.2
$.8
$1.2
$1.4
2007 % Growth
+2.4%
+7.3%
+6.5.5%
+6.2%
+3.9%
+2.0
+0.2%
+0.7%
-0.5
The confectionery retail market has grown across all trade channels but convenience stores, club stores,
dollar stores and chain drug stores have outpaced the overall retail market.
* Indicates NCA estimate
•Source: NCA estimates based on input from
Information Resources, Inc. NCA/CMA Monthly
Shipment Reports and U.S. Department of Commerce.
•Sales Figures in billions
Total Chocolate/Non-Chocolate/Gum
Dollar Share
CHOCOLATE
CANDY
56%
GUM
11%
NON-CHOCOLATE
CANDY
33%
U.S. Department of Commerce Census
Bureau 2006 MA 311D Report
Candy and Gum Ranked 3rd
Among 2007 Food Categories
$ Billions
$0.0
$3.0
$6.0
$9.0
-1.4%
Product Categories
Carbonated Beverages
Milk
+11.2%
Candy& Gum
+3.5%
Salty Snacks
+2.6%
Cereal
Ice Cream
Soup
Cookies
Bottled Juice
$12.0
+0.7%
-1.2%
$15.0
$13.50
$12.40
$8.50
$7.90
$6.40
$4.50
+2.4% $4.10
-1.9%
$4.00
+3.3% $3.80
Candy and Gum Ranked 3rd among 2007 Food Categories in Food, Drug and Mass Outlets
IRI Food, Drug & Mass
Excluding Wal-Mart 112/30/2007
Candy and Gum is the
Largest Snack Category
$ Billions
$0.0
$2.0
$4.0
$6.0
Product Categories
Candy& Gum
+3.5%
Salty Snacks
+2.6%
Ice Cream
-1.2%
Bakery Snacks
Dry Fruit
Misc. Snacks
$10.0
$8.50
$7.90
$4.50
-1.9% $4.00
Cookies
Snack/Granola Bars
$8.0
+11.0% $2.30
$1.00 +8.4%
$0.50 -4.0%
$0.30 +18.1%
IRI Food, Drug & Mass
Excluding Wal-Mart 112/30/2007
2007 Confectionery Sales
Manufacturers Sales Through October, 2007
$
Chocolate Candy
+3.5%
Non-Chocolate Candy +4.4%
Gum
+6.6%
NCA Monthly Shipment Reports
Lbs.
-0.1%
+1.6%
+1.4%
Confectionery
Seasonal Merchandising
What Affects Seasonal Sales?
•Date/Day of Holiday
•The Economy
•Consumer Confidence
•Shopping Patterns/Habits
•Merchandising Strength/Visibility
Confectionery Seasonal Sales
(** in millions of dollars)
2004
Valentine’s Day - $1,010
Easter $1,906
Halloween $2,041
Christmas $1,342
2005
$970
$1,761
$2,088
$1,375
Results and Projection as of January 2008
Source: Sales figures are compiled by National Confectioners Association
based on input from Information Resources, Inc. NCA/CMA Monthly Shipment
Reports and U.S. Department of Commerce
2006
$971
$1,884
$2,146
$1,389
2007
$1,036
$1,987
$2,202
$1,420
2008
$1,075*
$1,865*
$2,265*
$1,430*
Total Confectionery Seasonal Shares
Valentine's Day
16%
Easter
30%
Christmas
21%
Halloween
33%
•
•
Syndicated IRI data understates actual seasonal sales. It only includes packages with
seasonal graphics, and does not count regular packs sold during the season
– Halloween is severely impacted, none of the “big bags” that are popular are counted as
Halloween sales.
Actual seasonal sales are 50% to 100% higher than reported in IRI data tables
NCA estimates based on December 30, 2007 IRI
Data, NCA Manufacturers Shipment Reports and
U.S. Department of Commerce MA311D Report
Seasonal Confectionery Trends
2007
2006
2005
2004
2003
2002
VALENTINE’S
+6.7%
+0.1%
-4.0%
-3.0%
-7.6% +6.5%
EASTER
+5.4%
+7.0%
-7.6%
+5.5%
+2.2% -2.2%
HALLOWEEN
+2.6%
+2.8%
+2.3%
+2.4% +0.7% -0.4%
CHRISTMAS
+2.2%
+1.0%
+2.4%
-3.5%
-1.4% -3.0%
* IRI FD&M
NCA projects a 2.1% increase in 2008
Holiday Dates/Days
Holiday
2007
2008
2009
2010
Valentine’s
Wednesday
Thursday
Saturday
Sunday
Easter
4/8
3/23
4/12
4/4
Halloween
Wednesday
Friday
Saturday
Sunday
Christmas
Tuesday
Thursday
Friday
Saturday
Thanksgiving
11/22
11/27
Shopping Days
33
28
Indicates positive date for holiday sales
11/26
Indicates neutral date for holiday sales
11/25
29
30
Indicates negative date for holiday sales
U.S. Confectionery
Trends
Trends - What's
for 2007/2008
•Dark chocolate sales accelerating - +50% in 2007
•Chocolate experiences
Chocolate tastings
Chocolate and wine pairings
•Exotic chocolate flavorings: citrus, spice, salt, fruits
•High cocoa content chocolates
•Gourmet chocolate bars
•Gourmet packaging for chocolates
•Single origin chocolates
•Urban names for upscale chocolates
Trends - What's
for 2007/08
•Sugar Free gum - +13.5% sales
•Exotic fusion flavors
•Fortified products
•Theater Box candies
•Event merchandising – theaters, birthday, game nights
•Single-serve seasonal items
•New seasonal offerings