Confectionery

SIC 5145

Companies in this industry

Industry report:

This industry classification includes wholesale distributors of confectionery and related products such as candy, chewing gum, salted or roasted nuts, popcorn, soda fountain syrups and toppings, and potato and corn chips.

According to Dun & Bradstreet Marketing Solutions, 3,738 establishments operated in the wholesale confectionery industry in 2010. About 40,800 people were employed in the industry, and total annual sales were around $3.6 billion. The states controlling the largest share of confectionery market were California, New York, Texas, and New Jersey. Combined, they accounted for almost 40 percent of industry revenues.

According to the National Confectioners Association (NCA), in 2009 supermarkets generated 21 percent of total sales in this industry. Convenience stores accounted for 19 percent of sales, while Wal-Mart accounted for 17 percent, drug stores for 12 percent, and warehouse clubs for 11 percent. Vending machines, dollar stores, and bulk sales each accounted for about 5 percent of all sales. Despite the recession of the late 2000s, sales of candy rose 4.1 percent in 2009, whereas sales of gum were flat.

Candy consumption in the United States increased throughout the late twentieth century. Up from 16.0 pounds per capita in 1986, it stood at 20.7 pounds in 1990, and, according to the NCA, had reached 23.4 pounds by 1995. By 2004, the average American was eating 24.7 pounds of candy a year.

Although production in the confectionery industry declined in the 2000s, retail sales rose due to price increases. Retail sales of candy reached $29.3 billion in 2009, up from $25.8 billion in 2003. Of the two candy product categories--chocolate and nonchocolate--chocolate held its place as the most popular, accounting for 58 percent of candy sales in 2009.

Gum consumption and chewing gum sales also experienced tremendous growth in the U.S. market during the 1980s, 1990s, and 2000s. According to the International Chewing Gum Association (ICGA), which was created in 2005 by a merger between the National Association of Chewing Gum Manufacturers and the European Association of the Chewing Gum Industry, total domestic factory sales increased from $716.0 million in 1980 to $1.3 billion in 1990, and sales passed $1.4 billion in 1994. By the early 2000s, chewing gum sales had doubled to $2.8 billion, with sugarless gum accounting for an increasing percentage of sales. Worldwide, the chewing gum market was worth $23 billion in 2008, according to Euromonitor International. The United States remained the largest consumer of gum in the early 2010s. According to the ICGA, Americans chewed an average of 182 stick equivalents per person per year.

According to the Food Institute, the confectionery industry underwent major restructuring in the early 2000s, with more consolidations in 2003 than the industry had seen in a decade. Nine consolidations were reported, and there were a total of 11 mergers and acquisitions. These included Farley & Sathers Candy Co., which purchased gum brands from Hershey's Foods Corp., and Just Born Inc., of Bethlehem, Pennsylvania, which acquired Goldenberg Candy Company.

In 2010 one of the industry leaders was The Hershey Co. of Hershey, Pennsylvania, with annual sales of $5.2 billion and 13,700 employees. With 2009 sales of $30 billion and 70,000 employees, Mars Inc. of McLean, Virginia, offered several food products, including candy, and also owned the world's largest chewing gum manufacturer, the Wm. Wrigley Jr. Company. Other major players in the industry were Kansas City, Missouri-based Russell Stover Candies Inc., Godiva Chocolatier Inc. of New York, and Tootsie Roll Industries of Chicago. In 2010 food industry giant Kraft Foods of Northfield, Illinois, purchased Cadbury, well known for its chocolate.

According to figures from Dun & Bradstreet, a majority of establishments in this industry were small, with about 60 percent employing fewer than five workers. About 34 percent employed between 5 and 49 people, and the remainder were large companies with more than 50 employees. Of the 40,800 people employed in the industry, California was home to the most with 4,377. Other leading states in terms of number of workers were New York (3,399), Pennsylvania (2,468), Texas (2,212), and Tennessee (2,168).

U.S. exports of confectionery products were on the rise in the late 2000s. According to the NCA, in 2008 exports increased more than 20 percent as compared to the previous year. Chewing gum accounted for the largest increase, gaining 27.4 percent, followed by chocolate products with a gain of 24.2 percent and nonchocolate candy with a 17.3 percent increase. Other figures from Supplier Relations US showed that $1.4 billion of nonchocolate confectionery products were imported into the United States in 2009. Exports were worth about $500 million.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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