As Valentine’s Day approaches, retailers will be promoting sweet treats to consumers. The candy category generally does well during specific holiday periods such as Halloween, Christmas, and Easter. Out of the 4 major ‘candy’ holidays, Valentine’s Day usually garners 16% of the annual holiday market compared to the 34% share of the industry's holiday revenues that are tied to Halloween.
But candy retailers may be feeling some pressure this year. The National Confectioner’s Association foresees a negative trend for 2010 because Valentine’s Day falls on a Sunday. This follows negative spending in 2009 when candy sales dropped 9.4% for the holiday.
A survey by The Nielsen Company indicates there are categories that consumers favor even when finances are tight so candy marketers have reason for optimism. Here’s how candy sales at food/drug/mass merchandiser stores broke out in the past year and the percentage change from the previous year:
- Total candy sales: $10.6 billion (-3.4%)
- Branded candy: $10.2 billion (-4.2%)
- Private label candy: $455 million +5.5%
- Candy chocolate: $6.984 billion (-6.1%)
- Brand chocolate: $6.894 billion (-6.3%)
- Private label chocolate: $100 million +3.0%
- Candy non-chocolate: $3.682 billion 0%
- Non-chocolate branded: $3.3 billion (-1.1%)
- Non-chocolate private label $355 million +5.9%
Despite the small drop in revenue measured by Nielsen last year, candy remains a perennial favorite and the industry saw 6,000 new products come to market in 2008. Keep in mind that the Nielsen numbers show only a portion of the entire $28 billion in confectionery product retail sales but they do show a trend.
Consumer behavior with respect to candy mirrors their behavior when shopping for other food items – a shift toward private labels. As the figures above indicate, sales of private label chocolate grew 3% while private label non-chocolate grew 5.9%.
To counteract the general consumer sentiment and the negative effects of the Sunday holiday, look for marketers to promote gourmet value at everyday low prices during the upcoming Valentine’s Day holiday.[Sources: National Confectioners Association; Candy Conflict, Facts, Figures & The Future, Nielsen, 2009]