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January 2008

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Title: January 2008


1
United States Confectionery Market
  • January 2008

2
U.S. Confectionery Market Overview
3
  • 2007-2008 USA Economic Trends
  • Economy slowing
  • Retail sales growth down
  • Unemployment ends year at 5
  • Up from 4.6 in 2006 but low in historical terms
  • Housing market declines affecting job growth
  • High oil prices
  • Federal Reserve cutting interest rates
  • Fears of inflation
  • Fear of recession
  • Commodity prices higher

4
  • 2007-2008 USA Retail Trends
  • 2007 Holiday retail sales slowed
  • 2.4 growth vs 2.9 in 2006
  • Luxury Retailers continue to do well
  • Convenience and Drug doing well
  • Mass, dollar and supermarket experience slow
    growth
  • Overall retail is growing at a slower pace

High gas pricing negatively affecting all
retailers
5
The 2007 U.S. Confectionery Market
The U.S. Retail Confectionery Category generates
approximately 29 billion in retail sales
  • Change
  • Retail Sales 29.1 3.5
  • Manufacturers Shipments 18.9 3.0
  • Domestic Manufacturer Shipments 17.5 2.7
  • Imports 2.2 4.0
  • Exports 0.9 13.1

The profit margin is approximately 35 for the
confectionery category.
Estimated sales in billions NCA Shipment Data and
Global Trade Atlas Import/Export Data
6
2007 Confectionery SalesManufacturers sales
grew 3 in 2007
  • Category Retail Sales Manf. Sales
    Lb. Sales
  • Total 29.1 Billion 18.9 billion
    3.0 7.2 Billion 2.3
  • Chocolate 16.3 Billion 10.6 billion
    2.9 3.5 Billion 0.3
  • Non-Choc. 9.4 Billion 6.1 billion
    3.8 3.2 Billion 2.5
  • Gum 3.2 Billion 2.1 billion
    4.1 0.6 Billion 0.1

NCA Estimates base on U.S. Dept. Of Commerce
MA311D Report and NCA Monthly Shipment Reports
2006 US Department of Commerce 311D Confectionery
Report 2007 NCA Monthly Shipment Reports through
October 2007
7
2007 Confectionery SalesRetail Sales Summary
  • Trade Total Sales Growth Chocolate
    Growth Non-Chocolate Growth Gum Growth
  • Measured Confections vs. 2006 Confections vs.
    2006 Confections vs. 2006
    vs. 2006
  • FDMx 8.5 billion 3.5 4.9 billion 3.5 2.4
    billion 1.3 1.2 billion 8.1
  • FDMW 12.0 billion 4.6 6.7 billion 5.0 3.5
    billion 2.3 1.8 billion 7.5
  • FDMWC 16.5 billion 5.0 8.5 billion 5.3 4.9
    billion 2.4 3.1 billion 8.8
  • All Others 12.6 billion 7.8 billion 4.5
    billion 0.2 billion
  • Total Sales 29.1 billion 16.3 billion 9.4
    billion 3.2 billion

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.
2006 US Department of Commerce 311D Confectionery
Report 2007 IRI Reports through 12/30/07
8
2006 Per Capita Retail Sales
  • The average U.S. Consumer spent 94 on
    confectionery products in 2006

Department of Commerce Data is released in late
summer. Please return in August for actual 2007
data.
2006 US Department of Commerce 311D Confectionery
Report
9
Chocolate Candy represents approximately 56 of
total confectionery dollar sales.
Confectionery Categories Analysis
Category Retail Sales Billions Domestic Shipments billions Shipment Growth Vs. 2005 Imports billions Import Growth Vs. 2005 Exports billions Export Growth Vs. 2005
Total Confections 29.1 17.5 3.0 2.2 4.0 0.9 13.1
Chocolate 16.3 10.4 2.9 0.8 5.4 0.6 16.6
Non-Chocolate 9.4 5.0 3.8 1.3 2.6 0.2 13.6
Gum 3.2 2.1 4.1 0.1 7.7 0.1 -15.3
  • The value of imported confectionery consumed is
    slightly under 15, however much of this is from
    US suppliers producing product overseas and then
    bringing into the U.S.

NCA estimates based on Source 2006 US
Department of Commerce, Census Bureau 311D,
Confectionery Report and NCA Manufacturer
Shipment Reports
10
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.
  • Most food categories are represented by less
    than five companies.
  • 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, 2007 Dollar Sales IRI
TOTAL U.S. - F/D/MX
11
Continuous Growth of Confectionery
  • Total value and pounds of confection sold at
    retail has increased consistently over the past
    five years

Department of Commerce Data is released in late
summer. Please return in August for actual 2007
data.
2006- US Dept of Commerce 311 D Report
12
U.S. Confectionery The Retail Market
13
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 2007 estimates based on IRI, U.S. Department
of Commerce, MSA Vending Data, NCA Shipment
Report and other industry sources.
14
2007 Retail Channel Performance
Based on 52 Week Sales January - December 2007
Channel 2007 Sales 2007
Growth Supermarkets 4.6 2.4 Wal-Mart 3.5
7.3 Mass X Wal-Mart 1.4 6.5.5 Convenience
Stores 4.5 6.2 Drug Stores 2.6 3.9 Wareh
ouse Clubs 2.2 2.0 Dollar Stores .8 0.2 V
ending 1.2 0.7 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.
Indicates NCA estimate
  • 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

15
Total Chocolate/Non-Chocolate/Gum Dollar Share
  • U.S. Department of Commerce Census
  • Bureau 2006 MA 311D Report

16
Candy and Gum Ranked 3rdAmong 2007 Food
Categories
Candy and Gum Ranked 3rd among 2007 Food
Categories in Food, Drug and Mass Outlets
IRI Food, Drug Mass Excluding Wal-Mart
112/30/2007
17
Candy and Gum is the Largest Snack Category
IRI Food, Drug Mass Excluding Wal-Mart
112/30/2007
18
2007 Confectionery Sales
Manufacturers Sales Through October, 2007
Lbs. Chocolate Candy 3.5 -0.1 Non-Ch
ocolate Candy 4.4 1.6 Gum 6.6 1.4 NCA
Monthly Shipment Reports
19
Confectionery Seasonal Merchandising
20
  • What Affects Seasonal Sales?
  • Date/Day of Holiday
  • The Economy
  • Consumer Confidence
  • Shopping Patterns/Habits
  • Merchandising Strength/Visibility

21
Confectionery Seasonal Sales ( in millions of
dollars)
  • 2004 2005 2006 2007 2008
  • Valentines Day - 1,010 970 971 1,036 1,075
  • Easter - 1,906 1,761 1,884 1,987 1,865
  • Halloween - 2,041 2,088 2,146 2,202 2,265
  • Christmas - 1,342 1,375 1,389 1,420 1,430

Results and Projection as of January 2008 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

22
Total Confectionery Seasonal Shares
  • Syndicated IRI data understates actual seasonal
    sales. It only includes packages with seasonal
    graphics, and does not count regular packs sold
    during the season
  • Halloween is severely impacted, none of the big
    bags that are popular are counted as Halloween
    sales.
  • Actual seasonal sales are 50 to 100 higher than
    reported in IRI data tables

NCA estimates based on December 30, 2007 IRI
Data, NCA Manufacturers Shipment Reports and U.S.
Department of Commerce MA311D Report
23
Seasonal Confectionery Trends
2007 2006 2005 2004 2003
2002 VALENTINES -4.0
-3.0 -7.6 6.5 EASTER
-7.6 5.5 2.2 -2.2 HALLOWEEN
2.4 0.7 -0.4
CHRISTMAS -3.5 -1.4
-3.0 IRI FDM
0.1
6.7
5.4
7.0
2.3
2.8
2.6
2.4
1.0
2.2
NCA projects a 2.1 increase in 2008
24
Holiday Dates/Days
Holiday 2007 2008 2009 2010 Valentines
Wednesday Thursday Saturday Sunday Easter 4
/8 3/23 4/12 4/4 Halloween Wednesday Frid
ay Saturday Sunday Christmas Tuesday Thursday
Friday Saturday Thanksgiving
11/22 11/27 11/26 11/25
Shopping Days 33 28 29 30
Indicates negative date for holiday sales
Indicates positive date for holiday sales
Indicates neutral date for holiday sales
25
U.S. Confectionery Trends
26
Trends - What's for 2007/2008
Hot
  • Dark chocolate sales accelerating - 50 in 2007
  • Chocolate experiences
  • Chocolate tastings
  • Chocolate and wine pairings
  • Exotic chocolate flavorings citrus, spice, salt,
    fruits
  • High cocoa content chocolates
  • Gourmet chocolate bars
  • Gourmet packaging for chocolates
  • Single origin chocolates
  • Urban names for upscale chocolates

27
Trends - What's for 2007/08
Hot
  • Sugar Free gum - 13.5 sales
  • Exotic fusion flavors
  • Fortified products
  • Theater Box candies
  • Event merchandising theaters, birthday, game
    nights
  • Single-serve seasonal items
  • New seasonal offerings
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