The candy manufacturing industry includes three major segments: companies that make chocolate from beans, companies that use purchased chocolate to make candies, and companies that make nonchocolate candy. Major companies include Hershey, Mars, and Mondelez International, all based in the US; as well as Barry Callebaut, Lindt, and Nestlé (all based in Switzerland); Ferrero (Italy); and Meiji (Japan).
Worldwide, candy manufacturing generates about $200 billion in annual sales, according to Euromonitor International. Western Europe is the largest confectionery market, with a 30% share, followed by the Asia/Pacific region (19%), North America (18%), and Latin America (12%).
The US candy manufacturing industry includes about 1,600 companies with combined annual revenue of about $22 billion.
Demand is driven by consumer tastes, disposable income, and population growth. The profitability of individual companies depends on manufacturing efficiency, supply chain efficiency, and marketing. Large companies have advantages in economies of scale in manufacturing and purchasing. Small companies can compete effectively by offering premium and specialty products. All three industry segments -- companies that make chocolate from beans, companies that use purchased chocolate to make candies, and companies that make nonchocolate candy -- are highly concentrated.
Imports are a major source of competition for US producers. Most of the world's cocoa is produced outside the US; Hawaii is the only US cocoa source. For chocolate candy made directly from cocoa beans, imports account for about 50% of the US market. Imports account for about...