Innovation has never been more important to sweet treat categories. In an Instagram-obsessed age, new product launches tempt consumers with unique flavors, textures and colors, and keep shoppers returning to the snack aisles. John Downs, president and CEO of the National Confectioners Association (NCA), notes in the Washington, D.C.-based organization’s “Sweet Insights: State of Treating 2021” report that the confectionery category “is better positioned than ever for sustained growth, and our industry has become more consumer-centric in the way it markets its products.”
Here are some key trends that retailers should watch in the sweet treat categories.
Food as Entertainment
The pandemic means that consumers are eating at home more, and that includes consuming more sweet treats. “Confectionery is a strong and important category that offers both inexpensive treats and premium indulgence — which is exactly why it shows strength in good and bad economic times,” says Downs. Confectionery rang up $36.7 billion in sales in 2020 and was the fifth-largest center store category.
During the past year, food has been a way for consumers to bring entertainment into the home, and manufacturers are creating treats that engage snackers in new ways. That trend is likely to continue post-pandemic.
Pennsylvania-based Hershey’s seasonal Build-A-Santa, Build-A-Snowman and Build-A-Bunny bars are a good example of a product that encourages play, enabling kids to break the chocolate bar apart to build a fun figure. Meanwhile, Chicago-based Ferrara is now shipping Funables, a new fruit snack master brand, that includes on-pack activities, custom fruit snack pieces and top licensing partnerships.
For instance, Tic Tac Toe Funables features a pouch that doubles as a game board, and two-sided X and O snack shapes to inspire game play. A licensed Batman Funables includes an on-pack comic strip, and the Baby Shark Funables offers snacks in the shapes of characters on the new Nick Jr. show.
“Families are looking for snacks with high-quality, better-for-you ingredients, and a way to make snacking enjoyable for kids with engaging on-pack experiences,” says Greg Guiddotti, general manager, non-chocolate at Ferrara. “Funables combines both of these elements for a fun snacking experience with each delicious bite.”
Another example of a new launch aimed at targeting at-home living is Ben & Jerry’s Netflix & Chill’d, an ice cream line that debuted in early 2020 for snacking during streaming sessions.
Post-pandemic, consumers are likely to still want their food to “deliver the fun factor,” according to the “2021 Baileys Treat Report,” from London-based Diageo’s Baileys Irish Cream liqueur brand. London-based market research firm Euromonitor’s recent report notes that as manufacturers “look for ways to elevate their image while delivering a unique experience at home,” fun products with a theme will be key for snacking occasions that “warrant a slightly higher spend,” especially in more indulgent snacks categories, such as chocolate confectionery, ice cream and sweet biscuits.
With more time on their hands, consumers are also creating more sweet treats at home, according to Erica Norton, senior director of consumer insights at The Hershey Co.. “For our business, we see this reflected in increases in making s’mores and baking,” Norton says. The company has ramped up in-store support to reflect the new trend. “We’re leaning into s’mores specifically by putting out retail displays earlier than ever before,” she adds. “We’ve also increased advertising against s’mores and leaned into digital advertising around baking for Kisses and Hershey Bars.”
The Wow Factor
Retailers can expect more high-impact “fun” launches as brands “push the boundaries of colors and flavors,” according to Euromonitor’s report. The market research firm notes that more brands are “venturing outside the norms to keep feeding consumer desire to try out a product, engage with a brand digitally and share on social media.”
Products with a wow factor that are perfect for sharing on social media are becoming more prevalent. The “fantasy” food trend, which saw a flurry of unicorn-themed products launched in 2019, continues. Products such as Battle Creek, Mich.-based Kellogg’s Mermaid, Unicorn and Birthday waffles in blue, pink and yellow with rainbow sprinkles, are an example of a colorful themed launch.
Ferrara’s Mother’s brand, maker of Circus Animal cookies, recently launched Sparkling Mythical Creature Cookies, a new variety of bite-sized cookies in four mythical shapes (unicorn, sea serpents, mermaid, and dragon) iced in lavender and white and decorated with sparkling glitter sprinkles. The brand teamed up in April with the specialty bakery chain Sprinkles for a limited-edition cupcake timed to launch on National Unicorn Day (the ninth).
Licensed products are another opportunity to create buzz. “Licenses are very important to the kid’s novelty category,” affirms Clark Taylor, SVP of sales and marketing for Louisville, Ky.-based CandyRific. “Kids base their candy and snack choices on the licenses that they know and love.” A few of CandyRific’s key licenses are Baby Shark, Disney Princesses and Marvel’s Avengers.
“Some of the best promotion opportunities are where retailers build a display around a specific age group and license, such as Paw Patrol or Minions,” says Taylor. “These displays will create added excitement and color blocks in the stores to help create a destination for the consumers.”
“It just takes a little creativity to capture extra sales based on brand tie-ins, movie releases or digital releases,” observes Lou DiMarco, EVP for King of Prussia, Pa.-based Hilco. “With the advent of COVID-19, consumers re-engaged in at-home bonding and digital parties — all tied into the opportunity of purchasing candy. S’mores was up as a segment in 2020-21 because it was a family event, a digital event, and consumers took the treat beyond normal. New flavors and creativity evolved, and retailers who built larger and more elaborate displays captured more sales.”
Consumers Happy to Indulge
Over the past few years, consumers have shifted toward upmarket treats formulated with unusual and organic ingredients, and the pandemic has only accelerated that trend.
“At-home indulgences are providing an out-of-home experience,” says Sally Lyons Wyatt, EVP of client insights at Chicago-based IRI. “Categories like ice cream and frozen novelties are contributing to the growth of overall snacking.” The “true indulgence” segment of the snacking category has outpaced growth of other segments, adds Wyatt.
Brooklyn, N.Y.-based Van Leeuwen Ice Cream, a brand known for made-from-scratch dairy and vegan ice creams, recently launched a line of Van Leeuwen Ice Cream Bars. Englewood Cliffs, N.J.-based Unilever recently repackaged its Magnum ice cream brand and launched four new products, including Truffle Bars.
Indulgence extended to the candy category as well, with sales of premium chocolate outpacing regular chocolate, according to IRI data. “This aligns with premium trends we are seeing in other categories,” notes Wyatt. “During recessionary periods, consumers like to reward themselves and/or family members with a premium product that they may not normally purchase. It’s a special treat taking the form of specialty shop and/or restaurant quality for home consumption.”
Indulgence also extended to gifting. According to the NCA’s “Sweet Insights: State of Treating 2021” report, 36% of Americans said they’d sent or dropped off confectionery gift baskets or care packages in lieu of visiting people during the pandemic.
Flavor Trends Propel Growth
Flavor innovation is key to keeping sweet treat categories exciting. “Consumers continue to love new flavor combinations,” says Norton, of Hershey, whose Kit Kat brand has launched Mocha Duos and limited-edition Birthday Cake and Apple Pie flavors. According to Norton, Hershey’s salty/sweet combinations, such as Reese’s Big Cup with Pretzels, launched late last year, continue to be fan favorites.
Baileys Treat Report predicts sweet and salty mashups will get even more interesting in 2021. The report cites an influx of oat-based milk chocolates and ice creams and a crossover of Japanese indulgence treats as two trends to watch in the coming months.
Experts also say that lighter, crunchier and crispier textures are becoming more popular in the sweet treat segments. While such products have traditionally been dominated by creamy and melting consistencies, some consumers are viewing these attributes as “too heavy and unhealthy,” according to Euromonitor’s report. Recent launches, such as Kit Kat Thins, which offers two wafer layers instead of three, and Trolli Crunchy Crawlers, gummies with a crunchy coating, are examples of this trend.
Consumers Want More From Brands
Flavor innovation alone isn’t enough to promote trial or sustain consumer interest. NCA’s report indicates that shoppers are paying increased attention to package and production claims in categories across the store, including confectionery, and that trend is likely to grow. The “Sweet Insights” report notes that “younger generations in particular want to purchase foods and brands that align with their values and personal goals.”
Brands and retailers have elevated their environmental practices and corporate goals to address sustainable sourcing, package and food waste; reduction of water and energy resources; their carbon footprints; and other environmental issues, according to NCA’s “State of Treating” report. The report reveals that these platforms are important to about four in 10 confectionery shoppers – especially younger ones: More than half of Gen Z consumers said knowing that confectionery brands engage in waste-focused initiatives (reduced packaging, biodegradable packaging, etc.) influences their purchasing decisions.
More than half of shoppers also like to buy from companies that give to the community or charities, NCA’s report finds, and 45% reward confectionery brands that match their own values and beliefs through a greater purchase likelihood.
“These factors are increasingly important, especially with younger consumers,” Norton advises. “Our company is committed to responsible sourcing, our environmental footprint, and advancing diversity, equity and inclusion.”
Hershey is exploring more ways to communicate this information on packaging and targeted consumer communication. According to Norton, Hershey will expand its Celebrate SHE bar program, which rolled out last year, with its retail partners. “In recognition of International Women’s Day, bars were distributed at our Hershey’s Chocolate World locations [Hershey, Pa.; New York; and Las Vegas],” she says. “This served as a moment to celebrate the accomplishments of women, and we also were able to communicate our commitments to gender representation and dollar-for-dollar pay equity for women.”
Aiming to empower girls and celebrate diversity, Ferrara’s new licensing strategy with Barbie will feature girls from different backgrounds representing a variety of careers on product packaging. “A portion of the proceeds from these fruit snacks will support The Dream Gap Project initiative, which gives girls resources to break barriers and reach their potential,” notes Guiddotti.
Another key trend that Hershey is addressing is consumers’ increased desire for more choice in the better-for-you space. To that end, the company has launched Organic Hershey’s Bars and Organic Reese’s Peanut Butter Cups, among other items. “We introduced more better-for-you choices for the candy category earlier this year, with the rebrand and packaging updates for Zero Sugar offerings across our core brands,” Norton observes.
It’s no surprise that NCA’s report shows growth in certifications, since one in five consumers say that they look for certifications and labels when purchasing chocolate and candy. Fair Trade is the most sought-after claim, followed by Rainforest Alliance and Certified Organic/USDA Organic.