The German bear: Which brand is helping US sugar confectionery outpace chocolate?
Dollar sales for non-chocolate grew +4.5% in the first half (H1) to reach $3.92bn, according to IRI data for the latest 26 weeks ending June 25, 2017.
US chocolate sales rose only +2.5% over the same period to $6.88bn.
Chewy candy, novelties and mints were standout performers in US non-chocolate, as well as a renowned confectioner whose US presence is growing rapidly.
[Source: IRI, a Chicago-based market research firm (@iriworldwide), H1 2017, Total U.S. Multi-Outlet w/ C-Store (Supermarkets, Drugstores, Mass Market Retailers, Gas/C-Stores, Military Commissaries and Select Club & Dollar Retail Chains)]
Haribo winning market share
German company Haribo is gaining market share in chewy candy, the largest non-chocolate segment by dollar sales, at the expense of leaders Wrigley and Mondelēz.
Haribo grew its market share in the segment +1.3% as its sales of non-chocolate chewy candy in the US climbed +32.5% to $113.8m in H1.
It is still the fifth in the category behind Wrigley, Mondelēz, Ferrara Candy and private label.
But all its main rivals lost market share, except Ferrara.
2020 factory: Haribo growing in America
Haribo entered the US in 1982 when it opened a sales office in Baltimore, Maryland.
Haribo of America is today headquartered in Rosemont, Illinois. In October this year, it announced 55 new jobs at its US headquarters, taking the workforce to 114 full-time employees.
The company currently imports products to the US from its European factories.
But it plans open its first factory in the US by 2020 in Kenosha County, in southeast Wisconsin.
The 500,000 sq ft facility will be one of the world’s largest confectionery factories, according to Haribo of America’s CFO.
The company expects to almost double its US workforce by 2021.
The Gold Bear
Haribo’s Gold Bear brand has been its US growth driver.
US Gold Bear sales in H1 grew +30.8% to $74.6m, making it the fifth bestseller in US non-chocolate chewy candy.
The brand is cheaper than its main branded competitors.
Average unit prices for Gold Bears was $1.63 in H1, making it cheaper than average prices for Skittles ($1.70), Starburst ($1.92) and Sourpatch Kids ($1.83).
Top 10 players in US chewy candy (H1 2017)
Source: IRI, a Chicago-based market research firm (@iriworldwide), H1 2017, Total U.S. Multi-Outlet w/ C-Store (Supermarkets, Drugstores, Mass Market Retailers, Gas/C-Stores, Military Commissaries and Select Club & Dollar Retail Chains)
Mints & novelties
The US mint segment is also a rising star driven by smaller companies.
Wrigley’s Lifesavers plain mints and Perfetti Van Melle’s Mentos mints – the market leading brands - both lost market share in H1.
However, Tootsie Roll’s Junior Mints, Ferrara Candy’s Bobs Sweet Stripes and Piedmont Candy’s Red Bird brand made strong dollar sale gains.
Novelty non-chocolate was up +18.7% to $341.3m in H1 driven by huge growth for Nestlé USA’s SweeTarts novelty candy.
SweeTarts launched a limited edition range of gummies in partnership with college football teams last year.
Changing hands: Ones to watch
The US sugar confectionery segment is poised for change.
The Ferrero Group announced in October 2017 it would acquire Ferrara Candy, brand owner of Trolli and Black Forest Organics.
Nestlé USA’s confectionery business is also up for sale, including sugar confectionery brands SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, Spree and Runts.
