Candy Production in the US Industry Market Research Report Now Available from IBISWorld

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America's sweet tooth kept candy producers resilient during the recession, and the next five years will be marked by even further growth. An increasingly health-conscious marketplace will encourage producers to adapt their product lines to include low-sugar or sugar-free candies. Furthermore, as the number of children aged 12 and under continues to shrink, candy producers will increasingly market their goods to adults. As the domestic market becomes more saturated, the industry will look to foreign markets for growth. For these reasons, industry research firm IBISWorld has added a report on the Candy Production industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Loyalty, innovation and marketing propelled the industry through the economic storm

America's sweet tooth kept the Candy Production industry resilient despite high unemployment and volatile commodity prices over the past five years. “Although consumer disposable income was low during the recession,” says IBISWorld industry analyst Olivia Tang, “people bought more candy because it was considered a small luxury that could be enjoyed without financial guilt.” When the economy began to recover in 2010, however, and people had more spending money, they returned to dining out as a more preferable luxury. In addition, an increasingly health-conscious consumer base slowly weaned itself off of high-sugar foods like candy. This health-driven trend ate into revenue growth from 2010 to 2012, so in response, many companies introduced sugar-free candies. Consequently, these opposing trends kept annualized growth at a low rate of 1.7% over the five years to 2012.

Candy is a profitable industry largely because major players use marketing tactics such as advertisements to establish their brand. Firms that leverage their well-known brand can charge a premium for their products because of the perceived superior quality and ensuing brand loyalty. Therefore, larger firms are also able to easily pass on the high cost of sugar to downstream buyers through more expensive prices. Furthermore, says Tang, firms have been reducing labor costs and improving profitability by depending more on technology to improve operating efficiencies. In fact, the number of employees is anticipated to fall 2.9% per year on average to 15,759 during the five years to 2012. The Candy Production industry's two largest companies, Mars Inc. and The Hershey Company, account for more than half of the industry’s revenue.

Product innovation will foster industry growth in the next five years, with an initial increase of 1.7% expected in 2012. For example, manufacturers will target adult audiences by launching more products with less sugar or products enhanced with vitamins to address consumer health concerns. Even so, some health-conscious consumers will eat less candy, which will hamper demand growth. Therefore, revenue is projected to grow at a still-mild rate during the five years to 2017. During this period, the industry will also continue to consolidate; the number of firms is forecast to decline. Companies will merge in hopes of gaining market share and expanding their customer base in a highly competitive industry. For more information, visit IBISWorld’s Candy Production in the US industry report page.

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IBISWorld industry Report Key Topics

The Candy Production industry acquires raw materials such as sugar, cornstarch, fruit, preservatives, additives and flavorings to process them into confectionery. For example, the industry manufactures chewing gum, hand candies, marshmallows and toffee, but excludes chocolate products. The finished goods are then sold to confectionery and grocery wholesalers and retailers.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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