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January 2009

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Title: January 2009


1
United States Confectionery Market
  • January 2009

2
U.S. Confectionery Market Overview
3
  • 2008-2009 USA Economic Trends
  • U.S. and world economies in recession
  • Stock market declines 30
  • Retail sales decline in second half of 2008
  • Unemployment ends year over 7
  • Up from 4.6 at year-end 2006
  • Housing market bubble burst
  • Unstable oil prices
  • Year ends with historically low interest rates
  • Difficult to borrow credit crunch
  • Consumer spending declines
  • Commodity prices higher

4
  • 2008-2009 USA Retail Trends
  • Shopping trips declined
  • Spending shift to value channels
  • Increased coupon usage
  • Confectionery seen as a recession proof category
  • Organic sales decline
  • 2008 Holiday retail sales declined
  • Other than gasoline purchases retail sales
    declined 1.5 in December vs 2.4 growth in 2007

Credit crunch and lost investments impacting
consumer spending
5
Cocoa Prices at Historic Highs
Cocoa price per ton
2003
2005
2004
2007
2006
2008
6
Sugar Prices near Historic Highs
U.S. Cents per pound
Refined beet sugar f.o.b. Midwest
2003
2005
2004
2007
2006
2008
7
Corn Sweetener Prices near Historic Highs
U.S. per pound
2003
2005
2004
2007
2006
2008
8
Commodities Pricing
Milk Corn Syrup Peanuts Walnuts Pistachios Almonds
9
The 2008 U.S. Confectionery Market
The U.S. Retail Confectionery Category generates
approximately 28 billion in retail sales
  • Change
  • Retail Sales 28.0 2.2
  • Manufacturers Shipments 18.3 1.0
  • Domestic Manufacturer Shipments 17.5 1.0
  • Imports 2.0 0.2
  • Exports 1.2 21.6

The profit margin is approximately 35 for the
confectionery category.
Estimated sales in billions Estimates based on
NCA Shipment Data and Global Trade Atlas
Import/Export Data
10
2008 Confectionery SalesManufacturers sales
grew 1 in 2008
  • Category Retail Sales Manf. Sales
    Lb. Sales
  • Total 28.0 Billion 18.3 billion
    1.0 6.9 Billion -4.0
  • Chocolate 15.9 Billion 10.3 billion
    2.9 3.4 Billion -1.9
  • Non-Choc. 8.6 Billion 5.7 billion
    3.8 2.9 Billion -7.9
  • Gum 3.5 Billion 2.2 billion
    4.1 0.6 Billion 0.1

NCA Estimates base on U.S. Dept. Of Commerce
MA311D Report and NCA Monthly Shipment Reports
2008US Department of Commerce 311D Confectionery
Report 2008 NCA Monthly Shipment Reports through
November 2008
11
2008 Confectionery SalesRetail Sales Summary
  • Trade Total Sales Growth Chocolate
    Growth Non-Chocolate Growth Gum Growth
  • Measured Confections vs. 2007 Confections vs.
    2007 Confections vs. 2007
    vs. 2007
  • FDMx 8.8 billion 2.0 5.0 billion 1.9 2.5
    billion 0.2 1.3 billion 6.1
  • FDMW 12.4 billion 1.4 6.9 billion 1.2 3.6
    billion -1.2 2.0 billion 6.2
  • FDMWC 16.8 billion 2.2 8.6 billion 2.3 4.9
    billion 0.1 3.2 billion 4.9
  • All Others 11.4 billion 7.3 billion 3.7
    billion 0.3 billion
  • Total Sales 28.0 billion 2.2 15.9
    billion 2.3 8.6 billion 0.1 3.5
    billion 4.9

Trade Channels F Supermarkets D Drug
Stores M Mass Merchants W Wal-Mart C
Convenience Stores
NCA Estimates base on U.S. Dept. Of Commerce
MA311D Report and Information Resources, Inc.
2008 US Department of Commerce 311D Confectionery
Report 2008 IRI Reports through 12/28/08
12
2007 Per Capita Retail Sales
  • The average U.S. Consumer spent 91 on
    confectionery products in 2007

Department of Commerce Data is released in late
summer. Please return in August for actual 2008
data.
2008 US Department of Commerce 311D Confectionery
Report
13
Chocolate Candy represents approximately 58 of
total confectionery dollar sales.
2007 Confectionery Categories Analysis
Category Retail Sales Billions Domestic Shipments billions Shipment Growth Vs. 2006 Imports billions Import Growth Vs. 2006 Exports billions Export Growth Vs. 2006
Total Confections 27.4 16.5 3.0 2.2 -0.8 0.9 15.0
Chocolate 15.5 9.9 -0.3 0.8 4.6 0.6 18.9
Non-Chocolate 8.7 4.7 -0.8 1.2 -4.9 0.3 12.9
Gum 2.4 1.5 4.1 0.1 8.1 0.1 -15.4
  • This analysis shows figures for 2007 shipments
    and retail sales. The chart will be updated in
    August.

NCA estimates based on Source 2008 US
Department of Commerce, Census Bureau 311D,
Confectionery Report and NCA Manufacturer
Shipment Reports
14
The Confectionery Market is Very Diverse
There are more than 300 domestic confectionery
manufacturers
Manufacturer Market Share Concentration
  • The confectionery category is much more diverse
    than other similar sized food categories.
  • There are 300 suppliers competing for the
    remaining 30 of confectionery sales.
  • The uniqueness of the confectionery category is
    that each suppliers makes distinctly different
    items catering to the diverse tastes and demands
    of the consumer.

52 Week Sales December 30, 2008 Euromonitor
15
U.S. Confectionery The Retail Market
16
Retail Confectionery
Market Share by Trade Channel
estimates
Others include department stores, food
service and ingredient sales, fundraising,
give-aways, independent grocers, mail
order/internet, military, specialty/candy stores,
theaters and concessions
NCA 2008 estimates based on IRI, U.S. Department
of Commerce, MSA Vending Data, NCA Shipment
Report and other industry sources.
17
2008 Retail Channel Performance
Based on 52 Week Sales January - December 2008
Channel 2008 Sales 2008 Growth Supermarkets
4.7 1.6 Wal-Mart 3.7 -0.1 Mass X
Wal-Mart 1.4 0.1 Convenience
Stores 4.4 4.3 Drug Stores 2.7 3.7 Wareh
ouse Clubs 2.3 3.0 Dollar Stores .9 2.1
Vending 1.1 -1.5 Bulk 1.4 -0.5
The confectionery retail market has grown across
all trade channels but convenience stores, club
stores, dollar stores and chain drug stores have
outpaced the overall retail market.
  • Source NCA estimates based on input from
    Information Resources, Inc. NCA/CMA Monthly
    Shipment Reports and U.S. Department of Commerce.
  • Sales Figures in billions

Indicates NCA estimate
18
Total Chocolate/Non-Chocolate/Gum Dollar Share
  • U.S. Department of Commerce Census
  • Bureau 2008 MA 311D Report

19
Candy and Gum Ranked 3rdAmong 2008 Food
Categories
IRI Food, Drug Mass Excluding Wal-Mart
12/28/2008
Candy and Gum Ranked 3rd among 2008 Food
Categories in Food, Drug and Mass Outlets
20
Candy and Gum is the Largest Snack Category
IRI Food, Drug Mass Excluding Wal-Mart
12/28/2008
21
Confectionery Seasonal Merchandising
22
  • What Affects Seasonal Sales?
  • Date/Day of Holiday
  • The Economy
  • Consumer Confidence
  • Merchandising Strength/Visibility

23
Confectionery Seasonal Sales ( in millions of
dollars)
  • 2005 2006 2007 2008 2009 projections
  • Valentines Day - 970 971 1,036 1,024 1,000
  • Easter - 1,761 1,884 1,987 1,846 1,990
  • Halloween - 2,088 2,146 2,202 2,209 2,225
  • Christmas - 1,375 1,389 1,420 1,376 1,400

Results and Projection as of January 2009 Source
Sales figures are compiled by National
Confectioners Association based on input from
Information Resources, Inc. NCA/CMA Monthly
Shipment Reports and U.S. Department of Commerce

24
Total Confectionery Seasonal Shares
  • NCA estimates based on December 28, 2008 IRI
    Data, NCA Manufacturers Shipment Reports and U.S.
    Department of Commerce MA311D Report
  • Syndicated IRI data understates actual seasonal
    sales. It only includes packages with seasonal
    graphics, and does not count regular packs sold
    during the season

25
Seasonal Confectionery Trends
2008 2007 2006 2005 2004
2003 VALENTINES -0.2 6.7 0.1 -4.0
-3.0 -7.6 EASTER
-7.1 5.4 7.0 -7.6 5.5
2.2 HALLOWEEN 0.1 2.6 2.8 2.3
2.4 0.7 CHRISTMAS -3.1 2.2 1.0
2.4 -3.5 -1.4 IRI FDM
NCA projects a 2.0 increase in 2009
26
Holiday Dates/Days
Holiday 2009 2010 2011 2012
2013 Valentines Sat. Sunday Monday
Tuesday Thursday Easter 4/12
4/4 4/24 4/8 3/31 Halloween Sat.
Sunday Monday Wed. Thursday Christmas F
riday Sat. Sunday Tuesday
Wed Thanksgiving 11/26 11/25
11/24 11/22 11/28 Shopping Days
29 30 31 33 27
Indicates negative date for holiday sales
Indicates positive date for holiday sales
Indicates neutral date for holiday sales
27
U.S. Confectionery Trends
28
Trends - for 2008/2009
  • Everyday gourmet chocolate sales rose 28 in 2008
  • Growth slowed in second half of 2008
  • Dark chocolate sales continue to grow but at a
    slower pace
  • Dark chocolate sales increased 12
  • Core mass brands grew in units and dollars
  • Emerging trends
  • Exotic chocolate flavorings citrus, spice, salt,
    fruits
  • High cocoa content chocolates
  • Gourmet packaging for chocolates
  • Single origin chocolates
  • Increased offering of Everyday Gourmet
    chocolate items
  • Consumers want gourmet product at a value price

29
Trends - for 2008/09
  • Sugar Free gum - 11.0 sales
  • Exotic fusion flavors
  • Fortified products
  • Value products grew significantly
  • Theater Box candies
  • Licorice grew 9.4
  • Gummies and chewy candy grew 7.6
  • Seasonal candy declines
  • Reflection of difficult economy and unfavorable
    dates
  • Seasonal confectionery down 2.9
  • More favorable dates in 2009
  • Increased sugar-free product offerings
  • Increase lower calorie products offered
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