Interview: John Downs, President and CEO of the NCA, on Halloween, Covid-19, Black Lives Matter and the future of the candy industry

With Easter celebrations thrown into chaos at the start of the Coronavirus pandemic, there has been six months of uncertainty as to whether Halloween will happen for Americans in the traditional sense. Downs and the NCA have been adamant that ‘Halloween is Happening’, albeit safely, and the organization, with its headquarters in Washington, has been on a mission to keep its members and consumers informed of best practices on how to prepare for and celebrate this year’s festival. Passion and enthusiasm Whenever John Downs talks about the confectionery industry in the United States, he does so with passion and enthusiasm, after all, as President and CEO of its main trade body, is there a sweeter role in the corporate world? It’s a fun job for sure, but there is also a serious side to it and along with his infectious enthusiasm for candy, Downs never misses an opportunity to reiterate how important the industry is to the American economy, bringing in at least $36bn annually and employing more than 50,000 people across the country. Since Downs took over at the NCA six years ago with 650 member companies including Hershey, Mars, Mondelez, Ferrero, Ferrara Candy Company, Lindt & Sprüngli and Russell Stover Chocolate, the organization enjoys a reputation for getting things done and its influence straddles the country’s socio-economic and political landscape. Within the first year, he initiated a transformational change agenda to move the organization to a mission-driven advocacy association, including expansion into global markets, which, says Downs, is one of his proudest achievements to date, resulting in a strong brand identity. “ We have increased our capability in government relations and public affairs, scientific and regulatory communications and I'm very proud of the team that we've built . “ I'm very proud in terms of going out and getting the best talent and the metaphor I use is like a sport’s team. You want results you want to win championships? You want to get things done and you have got to go find the talent and put them in the right role so you can execute against your plan . “ And so when the pandemic arrived in the US, the ground was shifting beneath our feet, and the government shut down the economy – the NCA jumped into action with a very robust advocacy communications and lobbying effort dealing with Congress. “We dealt with government agencies, from the FDA to the USDA to the CDC to the Department of Homeland Security to state and local governments so we could minimize any supply chain disruptions that might occur related to supporting our industry and we've been very, very successful against all of that .” Downs says his team has been magnificent during the global health crisis and will continue to work as hard. “Given the foundation that we have built here in Washington … for example, the NCA has 50 members of the US House that are members of the candy caucus. We had 30 of those members send a letter to the CDC [the Centers for Disease Control and Prevention] trying to get a line in terms of Halloween happening, and some of our thinking, so we’ll be working hard on behalf of the industry post pandemic.” In normal circumstances, the NCA’s relatively new initiative of making June ‘National Candy Month’ would have given the sector a mid-year sales boost in what is seen as a quiet period before the all in-important Halloween season kicks in. There is still more to come on National Candy Month, as NCA sees the opportunity as one that is a multiple year journey where manufacturers and retailers will work together to bring it to life. Downs says the winter holidays are important to the industry and represent another big candy moment – “ but none is bigger than Halloween ”. The NCA moved fast with its Halloween is Happening message, reassuring members, some perhaps nervous of making it to Christmas under lockdown or social distancing restrictions. “ Halloween is a huge American tradition and celebration with family and friends ,” says Downs, “ chocolate and candy are going to be front and center as people enjoy the holiday with their favorite treats . “ “ We are very cautious but if you look at the consumer research that we've been doing heading into Halloween for our campaign and we've been guided by the research and the data, and basically people across the country are looking for ways to add some sense of normalcy and joy into their lives again . “ And so there's this insatiable appetite after being locked down for seven months and dealing with a lot of uncertainty and seriousness . “ There is an appetite to celebrate this Halloween tradition with family and friends and balancing fun and enjoyment with safety. And so that's been the message we've been putting out on our Halloween Central website .” Even without the big season events like Halloween, Easter and Christmas, confectionery and candy have been doing quite well during the pandemic, bringing comfort and a little indulgence to people to relieve all the stress and anxiety. Consumers are also aware of course that an unhealthy lifestyle and obesity can be trigger points for COVID-19 and the NCA is keen to promote a balanced diet when it comes to candy indulgence. Healthy confectionery Does Downs think healthy confectionery will become the norm once the virus has been contained? “ If you look at the results over the last seven months in terms of the business side, and look at the data, we did a lot of consumer research back in 2017-2018 related to consumer segmentation and what we found out, which is very interesting, is that all types of consumers enjoy chocolate and candy and we asked the Natural Marketing Institute and the Hudson Institute to do some very robust research for us. “ They identified five consumer segments - from wellbeing all the way to what they call the ‘eat, drink and be merry’ group - the ones that were in to taste and quantity etc., And we looked at the consumption index as it relates to wellbeings, food actives, and what they called ‘fence-sitters’, ‘magic bullets’ and ‘eat, drink and be merry’ consumers and the consumption index is about the same, which is really interesting for all the types of consumers. “ There's not a whole lot of difference. So, what that has said to us was there's something to this emotional wellbeing of chocolate and candy - and we've seen that during the pandemic, right?” Downs also says there has been a huge bump in online sales (up 69%) and the NCA is encouraging its members to embrace ecommerce. “ So that's why we put out information related to chocolate and candy sales being up 4.1% since March 15th of 2020. And then if you look at the performance of the business and by channel, I mean you see that this is impacted channels a little bit differently, but if you look you will see mass up, look at grocery being up you look at online sales. I mean, it's really interesting. Our online sales for candy are up over 65% from low single digits to now mid to high single digits in terms of online and now convenience store seem to be coming back a little bit. “ So, it's interesting in terms of people treating themselves during COVID-19. Will healthy confectionery be the norm going forward? I’m not sure it’s the norm but I do think you will see small increases in that trend .” Downs’s career in the corporate world spans more than 30 years in senior executive roles. Prior to joining NCA, he enjoyed a 28- year career in the Coca-Cola system on the bottling company side and with The Coca-Cola Company. Married with four grown-up children, Downs is used to the vicissitudes of both work and family life, and his outgoing and big personality is an ideal fit for a sector that brings fun and comfort into consumers’ lives. As a leader, the transformation over the past six years of the NCA speaks for itself but events over the past eight or nine months have been a real challenge and is one that Downs has risen up to, steadying the ship through choppy waters and leading by example. Black Lives Matter As a father, a businessman and head of a hugely important trade association, Downs hasn’t shied away either from confronting the recent social injustices highlighted by the Black Lives Matter movement. Downs was quick to write a comment piece to NCA members after the George Floyd killing, reminding them of the values of the organization and he says the NCA is having a dialogue looking for change and will address some of the issues. “ Our world has changed in such a big way and I think as I've witnessed what's happening not only within our industry, but outside our industry in the country, this has been the biggest collective and individual learning moment in all of our lifetimes . “A disruption of this magnitude transforms everything and we're dealing with all this radical uncertainty and here in the United States we've never had to deal with a pandemic and a health crisis, a wrecked economy with high unemployment and an economic crisis tied to the pandemic. “Also, the mass protests reveal some deep structural, social political and civil issues that we have with racial Injustice and income inequality … and then a presidential election on top of that. “So. it's like we've never had all these things converge it one time and so it's more important than ever for you know, companies and businesses and trade associations to really talk about it. “You need to have a dialogue about it, right? So, we're encouraging that dialogue. We want to make sure that we can educate ourselves so we have a better understanding and recognize this moment in time in our history. “ We want to look at ourselves in the mirror and acknowledge what we may not know, what we may not fully understand. We want to listen to others, especially other DC stakeholders and drive for solutions to some of these really big problems in our society and we want to play a small part … and I am really encouraged by the conversations on diversity and inclusion that we'll have with our board ,” he says. Sweets & Snacks Expo The magnitude of the impending coronavirus pandemic became evident at the NCA’s State of the Industry meeting in Florida in early March. Towards the end of the conference, news was coming through of a number of trade shows and conferences that had already been taken off the calendar, turning the focus onto the Sweets & Snacks Expo, scheduled for May in Chicago. “ This was obviously a very difficult and painful decision, but obviously the right decision ,” says Downs, when he took the decision to pull the trade fair, one of the largest in the world. “ It took us a couple weeks and I was in constant communication with our executive committee, but the number one priority was safety for the confectionery industry .” The Expo accounts for 55% of the NCA’s annual revenue, but as well as the financial hit, Downs says it was also a blow because of the unique and special nature of the candy industry. “ You know there is no replacement for the sense of seeing innovation, first-hand. You smell it. You see it, you taste it, you touch it and you're with your customers and it’s a great event .” Downs says he expects to make a decision about next year in the Fall and he remains “ hopeful ” the event will go ahead but couldn’t say specifically if it will be in Chicago, it all depends on the state of Illinois and its mandate in terms of reopening next year. One part of the NCA’s strategy that is powering forward regardless is its five-year Thrive in 25 initiative and its young professionals' network. “ They're terrific. They're smart. They represent the future of our industry and it’s about the demographic destiny coming our way as it relates to consumers in our market place, which is going to be really good for the confectionery industry down the road ,” he says. Downs says that the transformation of the NCA over recent years, where it has been able to fight its corner and promote a heathy attitude towards candy, is down to the brands as they reflect the values of the industry and are purpose driven - and like Downs himself bring passion, empathy and optimism as well as fun to America’s candy sector “ You know, you need to make sure that you are communicating and also making sure that your behavior is matching up with your consumer expectations of you ,” he simply says.

Interview: John Downs, President and CEO of the NCA, on Halloween, Covid-19, Black Lives Matter and the future of the candy industry

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