Sector Trend Analysis – Confectionery trends in the United States

Global trade overview of confectionery

The global import market for confectionery has experienced an increase in CAGR of 3.6% from US$37.6 billion in 2017 to US$43.2 billion in 2021. In 2021, the United States was the largest global importer of confectionery valued at US$5.6 billion, (1,521.5 kilotonnes), followed by Germany with imports valued at US$3.4 billion (708.0 kilotonnes) and the United Kingdom (UK) with import values of US$3.0 billion (668.8 kilotonnes).

The United States imported 13% of the total world market share for confectionery, representing an increased CAGR of 5.1% from a value of US$4.6 billion (1,296.8 kilotonnes) in 2017. Canada in comparison, was the sixth largest market for confectionery, accounting for 3.8% of the total world market share in 2021 at a value of US$1.6 billion, (380.3 kilotonnes); representing an increased CAGR of 3.1% from imports valued at US$1.4 billion (355.4 kilotonnes) in 2017.

Confectionery market in the United States

The top three suppliers of confectionery to the United States were Canada (US$2.1 billion, 525.9 kilotonnes), Mexico (US$1.4 billion, 522.5 kilotonnes) and Germany (US$374.8 million and 88.7 kilotonnes) in 2021. Turkey registered the largest increase over the 5-year period (2017-2021) at a CAGR of 20.4%, followed by Spain (16.6%), and Poland (15.7%). Alternatively, China registered a negative CAGR of 4.5%, decreasing from a supply value of US$155.9 million in 2017 to US$129.7 million in 2021.

In 2021, top imported confectionery products to the United States were sugar confectionery not containing cocoa (HS code 170490) valued at US$2.3 billion (765.6 kilotonnes), followed by chocolate and other cocoa preparations in packings of ≤2 kilograms (HS Code 180690) valued at US$1.4 billion (238.8 kilotonnes) and chocolate and other cocoa preparations in blocks, slabs or bars weighing >2 kilograms (HS code 180620) valued at US$847.1 million (286.3 kilotonnes).

Canada, being the top supplier of confectionery products to the United States, accounted for 37.8% of the total market share, followed by Mexico (24.6%) and Germany (6.7%) in 2021. Canada was the United State's top supplier for all chocolate and other cocoa confectionery preparations, along with chewing gum products (HS code 170410) over the year. Meanwhile, Mexico was the top supplier of sugar confectionery products not containing cocoa (including white chocolate) and sweetened cocoa powder. Germany was best known for its products of filled or non-filled chocolate and other preparations containing cocoa in blocks, slabs or bars ≤2 kilograms.

Canada's performance

In 2021, top Canadian confectionery products imported from the United States were chocolate and other cocoa preparations in blocks, slabs or bars weighing >2 kilograms (HS code 180620) valued at US$604.7 million (234.9 kilotonnes). followed by chocolate and other cocoa preparations in packings of ≤2 kilograms (HS Code 180690) valued at US$566.3 million (98.0 kilotonnes) and sugar confectionery not containing cocoa (HS code 170490) valued at US$405.5 million (110.4 kilotonnes). Chocolate and other cocoa preparations, in packings of ≤2 kilograms (excluding in blocks, slabs or bars and cocoa powder) grew the most in value terms since 2017 at a CAGR of 6.0%; while sweetened cocoa powder decreased by a CAGR of 7.9%, along with sugar confectionery not containing cocoa, including white chocolate (excluding chewing gum) by 2.2% between 2017 and 2021.

As reported by the United States, Canada had a supply gap for confectionery products of (US$3.5 billion) with total American imports of US$5.6 billion from the world compared to imports from Canada of US$2.1 billion in 2021.

Canada's confectionery global export market

In 2021, Canada exported US$2.2 billion of confectionery to global markets, representing an increased CAGR of 2.9% from exports valued at US$2.0 billion in 2017. The United States was the largest export market for Canadian confectionery with a market share of (94.9%) valued at US$2.1 billion, followed by Mexico (3.1%) valued at US$69.1 million, and Australia (0.5%) valued at US$10.4 million in 2021.

Several of the top ten suppliers to Canada have registered significantly positive CAGRs between 2017 and 2021, namely being Saudi Arabia (85.2%), Mexico (54.9%), Chile (33.1%), United Kingdom (21.1%), and Australia (20.1%). Alternatively, markets reporting negative supply growths to Canada were South Korea, Japan, and Hong Kong.

Global retail sales of confectionery

Global retail sales of confectionery increased by a CAGR of 2.6% from US$166.0 billion in 2016 to US$189.0 billion in 2021 and is expected to continue to increase at a 5-year period growth of 6.3% to reach US$256.7 billion in 2026. The United States was the largest retail sale market for confectionery products at a value of US$39.5 billion (20.9%), followed by China at US$14.1 billion (7.4%), and Germany valued at US$13.3 billion (7.1%) in 2021.

In 2021, Canada was the 11th largest global confectionery market at a retail sales value of US$3.9 billion with a market share of 2.0% and a CAGR of 2.4% (2016-2021), which is expected to reach US$5.0 billion increasing by a CAGR of 5.3% (2021-2026).

Retail sales of confectionery in the United States

Overall, retail sales of confectionery in United States increased by a CAGR of 3.5% from US$33.2 billion, (2,737.8 thousand tonnes) in 2016 to US$39.5 billion (2,981.2 thousand tonnes) in 2021. Chocolate confectionery was the largest category of confectionery by a market value share of 56.5%, followed by sugar confectionery (36.1%), and gum (7.4%) in 2021. Between 2021 and 2026, gum products registered negative value growth by a CAGR of 3.8% and a volume decline of 5.7%.

During the forecast period of 2021 (actual base year) to 2026, confectionery retail sales are expected to continue to increase in value by a CAGR of 5.8% from US$42.6 billion (2,994.3 thousand tonnes) in 2022 to US$52.4 billion (3,268.0 thousand tonnes) in 2026. Sugar confectionery is expected to register the highest growth, followed by chocolate confectionery, and closely behind by gum products (2021-2026).

Competitive landscape

In 2021, the top three confectionery companies and their top brands in the United States, controlling 55.5% of the total retail market share were The Hershey Company at 23.6% (Reese's, Hershey's, Ice Breakers), Mars Incorporated at 22.9% (M&M's, Snickers, Extra/Orbit), and Ferrero & related parties at 9.0% (Ferrero Rocher, Kinder, Trolli). Private label companies represented a 2.7% market share at a value of US$1.1 billion in 2021.

Market segmentation

Chocolate confectionery

In the United States, chocolate confectionery was the largest category of confectionery with retail sales valued at US$22.3 billion, representing an increase of 3.8% in CAGR from retail sales of US$18.5 billion in 2016. The chocolate confectionery category is expected to continue to grow by a CAGR of 5.6% to reach sales of US$29.3 billion by 2026.

Top chocolate confectionery products were chocolate countlines, chocolate pouches and bags, and seasonal chocolate types in 2021. Chocolate products sold with toys registered the highest growth by a CAGR of 57.4%, while all other chocolate confectionery sub-categories had moderate growth over the historic period (2016 to 2021). All chocolate sales did well over last year (2020-2021), and are forecast to experience total growth between 22.8% and 36.8% (2021 to 2026).

United State's top five chocolate confectionery companies and its top brands, representing a total market share of 79.5% (US$17.8 billion) were The Hershey Company (Reese's), Mars Inc. (M&M's), Chocoladefabriken Lindt & Sprüngli AG (Ghirardelli), Ferrero and related parties (Ferrero Rocher), and Nestlé SA (Kit Kat) in 2021. Private label companies represented a 1.9% market share at a value of US$422.4 million over the last year.

Sugar confectionery

In 2021, sugar confectionery was the 2nd largest confectionery category in the United States with retail sales valued at US$14.3 billion, representing an increased CAGR of 5.0% from retail sales of US$11.2 billion in 2016. The sugar confectionery category is expected to continue to grow by a CAGR of 6.2% to reach sales of US$19.3 billion by 2026.

Top sugar confectionery products were pastilles, gummies, jellies and chews (49.4%), followed by power & standard mints (8.9%), and medicated confectionery types (5.9%) in 2021. Pastilles, gummies, jellies and chews registered the highest growth by a CAGR of 7.1%, while both power & standard mints sugar confectionery sub-categories had negative growth over the historic period by 3% (2016 to 2021). All sugar confectionery did well over last year (2020-2021), and are forecast to experience total growth between 17.4% and 40.2% (2021 to 2026).

United State's top five sugar confectionery companies and its top brands, representing a total market share of 45.4% (US$6.5 billion) were Ferrero & related parties (Trolli), Mars Inc. (Skittles), The Hershey Company (Twizzlers), Mondelez International Inc. (Sour Patch Kids), and The Perfetti Van Melle Group (Airheads) in 2021. Private label companies represented a 4.5% market share at a value of US$643.3 million over the last year.

Gum

In 2021, gum was the 3rd largest confectionery category in the United States with retail sales valued at US$2.9 billion, representing an declined CAGR of 3.8% from retail sales of US$3.5 billion in 2016. The gum category is expected to recover and grow by a CAGR of 5.5% to reach sales of US$3.8 billion by 2026.

Chewing gum accounted for 91.8% of sales at a value of US$2.7 billion, with bubble gum having the remainder 8.2% of sales (US$238.1 million) in 2021. Both chewing gum and bubble gum categories registered negative growths by CAGRs of 4.0% and 1.1%, respectively over the historic period (2016 to 2021). Despite the negative growths, both confectionery gum types did fine over last year (2020-2021), and are forecast to recover with total growth between 30.2% and 30.6% (2021 to 2026).

The top five gum confectionery companies and its top brand in the United States, representing a total market share of 91.4% (US$2.7 billion) were Mars Inc. (Extra/Orbit), Mondelez International Inc. (Trident/Dirol), The Hershey Company (Ice Breakers), The Perfetti Van Melle Group (Mentos), and Tootsie Roll Industries Inc. (Double Bubble) in 2021. Private label companies represented a 0.1% market share at a value of US$204.0 million over the last year.

Retail distribution channels; confectionery product sector (off-trade)

The majority of United State's confectionery market is distributed through store-based retailing (US$37.2 billion) versus non-store retailing (US$2.3 billion) during the historic period, specifically 94.2% (store-based) and 5.8% (non-store e-commerce retailing) in 2021. American grocery retailers distribute most of the confectionery products (US$30.0 billion) representing a market share of 75.9%, mainly within hyper/supermarkets (43.1%), forecourt convenience retailers (12%), and grocery warehouse clubs (9.4%) over the last year. The remainder of confectionery products are distributed through non-grocery specialists (17.2%) such as health & beauty specialists (8.1%), general merchandise stores (5.6%), and vending outlets (1.1%) in 2021.

In 2021, online e-commerce sales increased by 4.2% percentage points (p.p) from a value of US$543.9 million in 2016. Proportionately, distribution sales within grocery retailers and non-grocery specialist outlets, respectively declined from 77.1% and 19.3% in 2016 to 75.9% and 17.2% in 2021.

Product launch and trend analysis

New product launch analysis

Mintel's Global New Products Database (GNPD) indicated that there were 7,901 new confectionery products launched (including new variety/range extension, packaging, formulation or relaunched) in the United States between January 2017 and September 2022.

The number of yearly product launches has declined in growth by a CAGR of 6.2% from confectionery new product count of 1,536 in 2017 to 1,187 in 2021. The average number of new confectionery products launched over this period (2017-2021) was 1,412.8 per year, which peaked at 1,910 products in 2019. Thus far, 837 new products were launched between January and September in 2022.

Description of above image

	2017	2018	2019	2020	2021	2022 (up to September 1)
Confectionery	1,536	1,281	1,910	1,150	1,187	837

Source: Mintel, 2022

In 2021, top confectionery sub-categories were chocolate confectionery at 655 products [including seasonal (252), wrapped pieces (200), tablets (125), countlines (30)], pastilles, gums, jellies & chews (220), marshmallows (34), gum (31), and lollipops (31). Top growing food categories amongst these confectionery products included bakery (+400%) and sugar & gum confectionery (+14.8%); while declining categories included snacks (-81.8%) and chocolate confectionery (-6.7%) between Q3-2021 and Q3-2022.

Meanwhile, top claims associated with these new confectionery products released during the prescribed period were Kosher, seasonal, low/no/reduced allergen, gluten free, and no additives or preservatives in 2021. Trending claims were vitamin/mineral fortified (+1000%), Halal (+750%), children for 5-12 years of age (+700%), economy (+550%), and low/no/reduced transfat (+433%) between Q2-2021 and Q2-2022.

In 2021, preferred flavours (including blends) were unflavoured/plain, peanut butter, strawberry, caramel/caramelised, and cherry. The fastest growing flavors were ginger (+500%), Chikki Indian sweet - nougatine/brittle/buttercrunch (+500%), apple/coffee/nougat or Turron (+400%), and peach (300%) between Q3-2020 and Q3-2022.

New ingredients within the last 12 months included sweet potato powder, Quillaia extract (type 1), red bean paste, jujube paste, Nata de Coco, Oblaat powder, plum powder, and date juice. Top package types for these products were flexible in a stand-up pouch or sachet, carton, rigid box, tub or jar format in 2021.

Top parent companies launching confectionery food products in the United States between 2017 and 2022 (Jan. - Sept.) were Mars/Mars Wrigley Confectionery (1,077), Hershey (669), Gruppo Ferrero (395), Lindt & Sprüngli (273), and Aldi Group (222). Top confectionery brands over this period included M&M's (172), Sugarfina (157), Trader Joe's (94), Russell Stover (86), and Hershey's (83). Recent new brands launched into the American market (September 2022) were Meigum (lemon flavored soft candy), Meiji Poifull (drink mix flavored gummies), Nobel Petagu (cola flavored soft candy), and Coris Horadekita! (Do-it-yourself apple flavored chewy candy).

Chocolate confectionery trends in the Americas

According to Mintel, chocolate confectionery makers selling in the Americas region are incorporating better-for-you (BFY) features into snacking formats - a sub-category that increased in sales during COVID-19 due to its ability to deliver emotional enjoyment during stressful times. A study reveals that 63% of Americans stated that they snacked more often on chocolate in the past year. However, as consumers come out of the pandemic the importance of healthy diets have led to the advancement around options that balance pleasure with BFY features. Meanwhile, chocolate companies in Latin America are embracing ethical and sustainable initiatives.^{Footnote 1}

In 2021, chocolate confectionery launches saw a rise in 'minus' claims on package labels. Most of these brands focused around claims such as low/no/reduced sugar or low carbs, especially with formulations suitable for the ketogenic diet that flags the product's carb content, zero-sugar claims and presence of healthy fats (that is, coconut oil).^{Footnote 1}

Sugar and gum confectionery trends in the Americas

Although the war on sugar has been challenged long before COVID-19, post-COVID consumers are still looking more toward a range of products that contain low/no/reduced sugar and free-from brands that offers 'guilt-free' options - where manufacturers are still trying to win over consumers who lead a sugar-reduced lifestyle without sidestepping treats altogether. In the Americas region, sugar confectionery brands are embracing ethical and sustainable initiatives, along with incorporating BFY claims that do not compromise on indulgent tastes that appeals to the general consumer. Latin American brands are using textures like 'chewy' and 'hard' to appeal to consumers during idol times.^{Footnote 2}

Consumers in North America rely on confectionery companies to act responsibly and those manufacturers that champion societal issues (ie; Williams Sonoma - Organic Gummy Bears with 30% of the price being donated to prevent hunger among children in the USA) and environmental issues (ie; Maud Borup Slam Dunk Basketball Gumballs are made in a wind-powered factory, USA) - including efforts to reduce waste or that contain compostable packaging (HerbaLand Apple Cider Vinegar Gummies, Canada); where 71% of Canadian consumers agree that companies' ethical practices have become more important to them since the beginning of the pandemic.^{Footnote 2}

National lockdown orders and changing shopping habits during the pandemic contributed to the decline in gum sales. In order to revive the gum segment, manufacturers are looking beyond breath-freshening as a primary selling point and are trying innovative strategies by promoting chewing gum as a stress reliever or an offering for energy support. Sugar-free remains as the dominant claim in this category but plant-based claims with gum bases sourced from trees (ie; chicle) have become an innovative trend.^{Footnote 2}

Product examples

Opportunities for Canada

The global confectionery import market is led by the United States at a value of US$5.6 billion in 2021. Canada ranked as the largest supplier to the United States providing confectionery products valued at US$2.1 billion, representing a market share of 37.8% over the last year. Other top competitors within the American confectionery market in 2021, includes Mexico at a supply value of US$1.4 billion (24.6%) and Germany at US$374.8 million (16.7%).

Given the size of the American sector for confectionery products, Canadian producers have an opportunity to expand their exports and innovative products within the market. That said, it is important for Canadian suppliers to work closely with their importing partners and trade commissioners to ensure that the United States' import requirements for their specific products are met.

The Canada-United States-Mexico Agreement (CUSMA) that came into force on July 1, 2020, provides Canadian exporters preferential tariff treatment in the form of reduced tariffs, and access to one of the world's largest economies. The tariff treatment of a good exported to the USA depends on its specific tariff classification as determined by the American Customs Service. To benefit from tariff preferences in the United States, Canadian exporters must ensure goods meet applicable rules of origin. The importer must have a valid certificate of origin in their possession at the time of importation.

Canadian exporters may consult the Canada Tariff Finder to explore tariff information for the US market under the CUSMA, and other foreign markets with which Canada has a free trade agreement.

Please visit 'Annex 2-B of Chapter 2 of CUSMA' or Global Affairs Canada G-2-2: Sugar-containing products - CUSMA (including sugars and sugar confectionery (HS code chapter 1704) and chocolate confectionery (HS code chapter 1806)) for a list of Canada-specific tariff-free rate quotas for confectionery exports to the United States.

For more information

The Canadian Trade Commissioner Service:

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Find a Trade Commissioner

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Resources

• Canada Tariff Finder, 2022
• Euromonitor International, 2022
• Global Affairs Canada, June 22, 2020: G-2-2: Sugar-containing products – CUSMA
• Global Trade Tracker, 2022
• Government of Canada, May 6, 2022 : About CUSMA
• Mintel | 2022.  A year of innovation in chocolate confectionery
• Mintel | 2022. A year of innovation in sugar and gum confectionery
• Mintel Global New Products Database, 2022

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Prepared by: Erin-Ann Chauvin, Senior International Market Research Analyst

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