NCA: 1998 WAS RECORD YEAR FOR CANDY CONSUMPTION

WILLIAM SMYTH

MACLEAN, Va. -- According to the latest review from The National Confectioners Association here, 1998 was the best year on record for candy consumption in the United States.

The review, called "Issues, Trends and Performance of the Chocolate and Confectionery Industry," features a historical review of candy's performance over the past 100 years, as well as predictions for 2000.

In 1998, candy became a larger part of holiday celebrations, as candy and gourmet chocolates increased in popularity. Information Resources, Inc., Chicago, reported that retail confectionary sales were up 3.1% to $8.3 billion for the 52-week period ended January 3, 1999. Supermarkets saw a 1% increase to $3.8 billion in sales, while mass merchants increased sales 9.3% to $2.7 billion, according to IRI data.

The non-chocolate category was up 6.3% to $2.3 billion in sales and is being led by breath fresheners, which were up 15.3%. Chewy candies, like gummies, jelly beans and taffy, jumped 14.1% in sales, while chocolate saw a decrease of 0.9% to $3.2 billion.

Seasonal candy experienced record sales in 1998 for all major holidays, including Valentine's Day, Christmas, Halloween and Easter, and overall sales increased 5.2%, according to IRI. However, in light of a difficult fourth quarter sales season by some of the top retailers, Christmas candy sales experienced a 2.9% decrease for the first time this decade.

Two areas that thrived in 1998 were gift-boxed chocolates and novelty candy. Boxed chocolates grew 2.9% in 1998 and are projected to grow up to 16% by 2002. Novelty candy and gum products continue to sustain growth, with novelty candy sales jumping 10.1% for the period. Over the past four years the category has grown more than 35%, according to IRI. Gum was up 0.9% and generated $1 billion in sales in 1998.

The review also looked at demographics and food trends, and according to Susan Smith, senior vice president of public affairs for the NCA, the population of children ages 5-14 is growing slightly faster than the rest of the population. This is good news for retailers, as this age group constitutes 40% to 45% of total candy and gum sales, she said.

"In addition to the interest in functional foods, Americans are consuming more and more bite-size foods and candies, as well as ethnic foods," Smith said. "Interestingly enough, foods with enough fat in them to make them tasty are enjoying a resurgence in popularity."

The changing consumer and retail environment are vital for confectionery sales. "The supermarket industry is a mirror image to the confectionery industry in that it has grown and reshaped itself through the twentieth century," said Jim Corcoran, director of trade relations for the NCA.

"As the retail community changed from small specialty shops offering limited goods to the era of supermarkets and then super centers, consumer expectations changed with them," he added.

According to Corcoran, today's consumers are beginning to reach the age of "no-stop-shopping." Internet and home delivery supermarkets are getting a chunk of retail sales, while candy and gum are getting competition from fruits and vegetables, breakfast bars, cereal bars, meat snacks and other instant consumption foods.

"Not necessarily healthier-for-you candy, these items represent a revolution in the distribution system and consumer tastes," said Corcoran. "Retailers are delivering. The choices for satisfying on-the-go food needs are endless, as are places you can shop for them."