2020 State of the Confectionery Industry: Better-for-you, sugar-free entice consumers amid COVID-19

Health is on everyone’s mind these days. Whether you’re newly working from home, constantly making sure you have your face mask, considering homeschooling your kids in the fall, or all of the above — it’s impossible to avoid thinking about COVID-19 right now.

And many consumers have channeled their focus on health into their food choices.

A May survey found 80 percent of consumers say they plan to eat and drink healthier because of coronavirus, compared to the 73 percent who said the same thing a month earlier. That’s according to data from FMCG Gurus, which conducted surveys of 23,000 consumers across 18 countries in April and May 2020.

Also in May 2020, 43 percent of consumers said they had become more conscious about their mental wellbeing because of COVID-19, compared to the 36 percent who said this a month earlier.

Gretchen Hadden, marketing manager, Cargill Cocoa & Chocolate, recently said that, “Consumers are taking a more proactive, personal and holistic approach to health.” She added that part of that is choosing products enhanced with protein, fiber or other nutrients.

Companies like Kohler are capitalizing on this trend by introducing a new line of protein bars. Combining 21 grams of protein with plant-based ingredients, the new protein bars feature all-natural ingredients including peanuts, quinoa, chia seeds and hemp hearts. They come in three flavors, including Berries, Coffee and Peanut Butter.

“With 21 grams of all-natural protein, they're a deliciously dynamic way to refuel and recharge,” the company says.

Consumers also seem to be seeking out sugar-free options as part of an effort to eat healthier.

Huge increases in sugar-free chocolate candy seem to reflect this trend. While sugar-free chocolate has traditionally been seen as a difficult market to tap into, sales data over the last year shows a lot of growth, according to IRI, a Chicago-based research firm (@iriworldwide).

Specifically, the category increased 16.6 percent to $169.7 million over the latest 52 weeks ending June 14, 2020. And, four of the Top 5 companies in sugar-free chocolate candy sales saw increases over the last year, according to the IRI data.

The Top 5 companies include:

Russell Stover Candies Inc., which saw a 15.9 percent increase in sales to $114.1 million.
Lily's Sweets LLC, which saw a 51.3 percent increase in sales to $25.6 million.
The Hershey Co., which saw a 6 percent decrease in sales to $22 million.
Whitman's Chocolates, which saw a 5.1 percent increase in sales to $2.9 million.
Healthsmart Foods Inc., which saw a 21.5 percent increase in sales to $1.7 million

Much of that growth was propelled by Lily’s Sweets LLC, the No. 2 sugar-free chocolate company. Lily’s saw a 51.3 percent increase. The company’s sugar-free chocolate candy comes in at No. 2 in the sector.

This year Lily’s introduced a number of new products. In the spring, it released a line of no-sugar-added white chocolate bars, featuring just 2 grams of sugar per serving.

The new white chocolate bars are made with non-GMO ingredients and are available in three varieties:

White Chocolate Style Original Bar: For those that like to stick with the classics, this traditional White Chocolate Bar is a sweet and creamy treat.
White Chocolate Style Cookies & Crème Bar: An on-trend favorite among white chocolate fans, Cookies & Crème delivers even more indulgence, but without the guilt.
White Chocolate Style Birthday Cake Bar: Lily’s gives consumers one more reason to celebrate — a Birthday Cake flavor that is sure to make sweet memories for years to come.

This launch follows Lily’s introduction of nine new products in January, including Chocolate Covered Caramels, Chocolate Covered Caramel Popcorn, three new Chocolate Bars, and a two-pack of the popular Dark and Milk Chocolate Peanut Butter Cups.

“I have always wanted to develop a white chocolate bar, so I’m thrilled to introduce three delicious varieties our fans will obsess over,” said Cynthia Tice, founder of Lily’s. “This innovation continues to fulfill my dream of bringing more no sugar added chocolate to more people.”

Lily’s also tapped into the trend of consumers spending more time at home and therefore baking more by extending their line of baking chips to include White Chocolate Style and Chocolate Salted Caramel.

The new varieties have 1g or less of sugar per serving and are made with non-GMO and certified gluten-free ingredients.

"Baking chips are often how consumers first experience Lily's, so we are thrilled to introduce these new and delicious offerings into our baking chocolate lineup," Tice said. "Our goal has always been to inspire people to live a sweeter life, and in the past couple months our team has been moved by the creative baking we have seen. We continue to listen to our fans and use that inspiration to give them what they need and desire, while still helping to limit overall sugar intake."

Russell Stover, the top sugar-free chocolate company, also saw massive gains over the last year. The company's overall sales were up 16 percent to $114.2 million. And its sugar-free chocolate candy was the top selling in the category, seeing a 15.6 percent increase in sales to $113.8 million.

The Top 5 selling products in the sector include: