Candy Manufacturing

Candy Manufacturing

Brief Excerpt from Industry Overview Chapter:

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 Barry Callebaut and Nestlé (both headquartered in Switzerland), The Hershey Company and Mars (US), Cadbury (UK-based, but owned by US food maker Mondelez International), and Ferrero (Italy).

Worldwide, the candy manufacturing market generates about $150 billion in annual revenue, according to Business Insights. The US and Western Europe are the largest confectionery markets. Rising incomes are fueling growth in emerging markets like Latin America, the Asia/Pacific region, and Eastern Europe.

The US candy manufacturing industry includes about 1,600 companies with combined annual revenue of about $20 billion and is expected to experience moderate growth in the next two years. Growth drivers include new flavor offerings and healthier products.

COMPETITIVE LANDSCAPE

Demand is driven by consumer tastes 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 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...