The Candy Files: Confectionery industry 2015 year in review
We’ve traveled the globe this year and added correspondents in the US to bring breaking industry news and analysis for the confectionery sector.
The stories below have been handpicked by our editors as the most important confectionery news for industry professionals in 2015 that may also shape the sector’s direction for the coming year.
January –Lindt surges and UK candy checkout cull
Lindt made a positive start to 2015 and surprised analysts by surpassing CHF 3bn ($3bn) in its 2014 annual results. Its group sales grew 17.4%, leading one analyst to say it was “playing in a league of its own” in a chocolate market that grew just 2-3% throughout the year.
In the UK, supermarket giant Tesco removed confectionery from checkout zones at its convenience stores in favor of better-for-you items – other UK retailers would follow suit later in the year.
In other news, Jelly’s Belly’s R&D manager and accidental inventor of the barf-flavored jelly bean was crowned ConfectioneryNews Personality of the Year 2014.
February – Ferrero owner dies and Hershey simplifies formulations
Hershey pledged to move to simplified ingredients and announced its Kisses and Hershey’s Milk Chocolate would remove GMOs and artificial vanillin. The US chocolate leader said its existing lineup would eventually cut artificial colors and flavors and high-fructose corn syrup. In contrast, Mars stood by artificial colors and flavors after coming under pressure from consumer groups.
The long-term owner of Ferrero and formerly the world’s richest confectioner died. It sparked speculation that the Italian firm could be an acquisition target for Nestlé but Ferrero CEO Giovanni Ferrero, Michelle’s son, said the firm “is not and will not be up for sale”.
Also, Hershey, Mars and See’s Candies were hit by a US lawsuit brought by non-profit As You Sow, accusing the firms of failing to label lead and cadmium content in chocolate contrary to Californian law. Claims rejected by Hershey.
Istanbul-based Toller Gida won most innovative new product at the world’s largest confectionery fair, International Sweets and Biscuits Fair (ISM), for SoundyCandy, a hard boiled sweet with the acoustic effects of hard boiled candy.
March – Poverty alleviation quizzed in cocoa sustainability drive and Ferrero plans China plant
In March, Ferrero unveiled plans for a plant in China, its first in the fledgling chocolate market.
A Hershey executive and the National Confectioners Association’s (NCA) president said the chewing gum market was finally poised to grow following a troubled five years.
Also, civil society organizations published the 2015 Cocoa Barometer and said that while progress had been made in the drive for cocoa sustainability, extreme poverty has largely been ignored. It found just 6.6% of the value of a $1 chocolate bar reaches the farmer, while chocolate manufacturers receive 35.2% and retail & taxes take 44.2%.
In processing news, Texas-based Lehrmitt Design Studios introduced 3D chocolate molds that allow intricate designs on chocolate surfaces that the firm claimed were not possible with existing technology.
April – Supply chain control and cocoa polyphenol craze
In April, Ferrero took greater control of its supply chain by purchasing almost 700 hectares of land for €7.95m ($8.64m) to set up a hazelnut plantation. It followed a move last year to acquire the world’s largest hazelnut supplier Oltan as prices for hazelnuts – a key ingredient for Ferrero Rocher and Nutella – hit record highs.
Meiji said a cocoa polyphenol health craze was helping to boost dark chocolate sales in the mature Japanese market.
ConfectioneryNews was at the Asia Choco Cocoa Congress in Singapore, where Mars said the chocolate industry must not let the Indonesian cocoa sector fail if it wants to secure a cocoa supply to cater to the emerging markets. Conference delegates added that the industry must ramp up support for good agricultural practices on cocoa farms or else rainforest will be cut to make way for future cocoa plantations.
May – 3D printing potential and CocoaAction steps up
In May, UK-based technology firm Choc Edge said 3D printing holds great promise to further develop the $13.4bn global personalized confectionery market.
Mondelēz International announced plans to bring Trident gum to China, while the World Cocoa Foundation’s CocoaAction platform announced a $52m education program in Ivorian cocoa communities. Over 60% of 15 to 24-year-olds in the world’s premier cocoa-producing country never complete primary school.
In other news, The Albanese Confectionery Group, Project7 gum and Ferrero USA’s Tic-Tac Minions were among the winner’s at the National Confectioners Association’s (NCA) Sweets & Snacks Expo’s most innovative product awards 2015.
June: Barry Callebaut names new boss and Wrigley pins hopes on sour gum
In June, Barry Callebaut said Unilever Foods president Antoine de Saint-Affrique would take over from Juergen Steinemann as the company’s CEO from 1 October this year.
Brazilian confectioners joined the booming US premium chocolate race with single-origin Brazilian chocolate, while Mars-owned Wrigley focused its R&D spend on its Juicy Fruit brand to win back young American consumers with fun sour flavors.
In an ongoing lawsuit accusing Nestlé, Cargill and ADM of enabling child slavery in the Côte D’Ivoire, a dissenting judge warned US chocolate makers would stop buying cocoa from the West African nation if the case succeeds. The case continues.
July – Mars accepts WHO sugar guidance and Perfetti Van Melle faces class action
In July, Mars went against the industry tide to say it supported the World Health Organization’s guidance that added sugar should account for under 10% of a person's daily calories. It set targets for new products to be under 250 calories per serving and made a forary into the snack bar market with new brand goodnessknows.
Tulane University found around two million children were working in hazardous cocoa labor in Côte D’Ivoire and Ghana during the 2013/14 harvest season, up 18% from 2008/09.
Elsewhere, Perfetti Van Melle was hit by a US class action lawsuit that accused the firm of deceiving consumers by slack-filling Mentos chewing gum containers – claims the confectioner said it would vigorously defend.
In other news, Cargill’s deal to acquire ADM’s chocolate business was approved by the European Commission, Lindt continued to perform above a stagnating chocolate market in the first half of the year, while Mondelēz introduced Oreo Thins to the market.
August - Support for sugar cane cutters and Salmonella found in chocolate
In August, supply chain advisor Solidaridad said the confectionery industry should do more to support sugar cane cutters after thousands of Central American cane workers died from kidney disease mainly due to perilous working conditions.
In Western Europe, at least 14 countries and numerous brands were affected by Salmonella contamination in chocolate products leading to widespread recalls for brands such as Consenza, Atkins and Dr Schär.
Some major confectioners struggled in the first half of the year after raising wholesale prices. Hershey reported a second quarter loss of almost $100m, while Nestlé’s first-half confectionery sales dipped around $300m compared to the same period last year.
September - 3D gummies and the future of merchandising
In September, German confectioner Katjes created the world’s first 3D-printed gummies.
Natural colors supplier GNT said a big shift from artificial and additive colors to coloring foods was imminent as new EU rules on colors were due to enter full force.
Mondelēz said wearables and beacon technology were marketing tools of the future after partnering with eight tech startups from power brands like Oreo and Trident. Irene Rosenfeld’s firm also said it would simplify ingredients used in its products and remove artificial colors and flavors by 2020.
Mars continued its cocoa flavanol research with dietary supplements and questioned chocolate as an appropriate delivery vehicle.
Three class action lawsuits were brought in California accusing Mars, Nestlé and Hershey of using child labor to produce their best-selling chocolate brands. The firms said they are tackling the issue and would fight the cases.
October – Mars snaps up Grupo Turin; Nestlé rolls out Cailler
Fairtrade International’s departing CEO Harriet Lamb said the chocolate industry should double the price it pays for cocoa to secure its supply and to alleviate poverty in the developing world.
Also in October, Nestlé addressed a purported gap in its portfolio by rolling out its super-premium brand Cailler in the US, UK, Germany and China solely via e-commerce and travel retail.
Hershey’s troubles continued in Q3 with a reported 31% drop earnings after lower than expected US candy, gum and mint sales and a slowdown for chocolate sales in China.
Also, Mars acquired premium Mexican chocolatier Grupo Turin, while Nestlé increased capcity for its popular Butterfinger Cups.
November – Fruit juice fermentation and Mars' impluse rethink
In November, Valrhona Chocolat claimed it has opened doors to a new category of confections with a chocolate couvertures made from double-fermented cocoa beans using fruit juice.
Mars Chocolate and Wrigley announced the firms would look beyond traditional checkouts to stimulate impulse buys and adopted a new merchandising strategy also fit for mobile purchasing platforms, self-checkouts, e-commerce sites, cafés and pharmacies.
In other news, an online marketing company debunked an urban myth that chocolate bars have shrunk. Some have, but it largely depends on the product and the comparison date.
December – Rumors and speculation
For the final month of the year, analysts predicted a big merger between Hershey and Ferrero – a claim Hershey called ‘speculation’.
Rumors were also rife that Mondelēz was looking to offload UK brand Terry’s Chocolate Orange – the firm declined to comment.
Elsewhere, French supplier Roquette introduced an ingredient based on starch that can create gelatine-free chewy candies and also chewing gum that can be produced without expensive lamination equipment.