McCormick Place — It’s no secret that inflation has had an impact on everyday life. On average, consumers were paying 30 percent more for food & beverage in April 2023 than in April 2020, according to data from 210 Analytics, LLC.
With 95 percent of consumers concerned about food and beverage inflation and 85 percent making changes to their grocery purchases, Candy & Snack TODAY spoke with several exhibitors about how inflation is impacting the industry.
First-quarter confectionery inflation is above average, Anne-Marie Roerink, principal and founder of 210 Analytics noted. This year, Q1 chocolate prices were up 15.2 percent versus 2022 for a total increase of 35 percent from 2020. Non-chocolate prices fared similarly with a 15.2 percent increase from 2022 and a 32.1 percent increase from 2020.
However, Roerink emphasized that consumers are still drawn to candy and snacks and are often willing to pay a little bit extra for the brands that they know and love.
“Generally speaking, confectionery is holding up very strongly despite inflation taking a big bite out of people’s spending power across the entire income spectrum,” she said.
The rising costs in freight, raw materials and packaging have caused the pricing of retail products to skyrocket, according to Taylor Walker, director of operations and co-founder of Sprintzal Cookie Co., LLC. But she agreed that consumers are still going to seek out their favorite treats.
“People still want snacks and candy so they are still willing to splurge for a little serotonin boost,” she added. “Creating a valued and trustworthy brand creates customer confidence and loyalty.”
Courtney LeDrew, senior marketing manager at Cargill, Inc. agreed, saying that while consumers are feeling the pinch of inflation and therefore trying to stretch their grocery budget, confections are viewed as affordable indulgences.
Adding to this point, Joe Dutra, CEO of Kimmi Candy revealed: “Customers will always be loyal to confections that they grew up with and love. They will always find a way for an affordable treat.”
Looking to the future, Ed Seibolt, vice-president, sales & business development at Ferrero/Fannie May forewarned that soon consumers might begin questioning price increases with some believing manufacturers are gauging them and taking advantage of the pandemic and post-pandemic period.
He added that this is accelerating the introduction of private label as an alternative to national brands.
Kathi Rennaker, director of marketing at Brown & Haley, said that customers are still purchasing but are looking for either a better value or a lower retail price point.
“Inflation has had an effect on most brands with consumers purchasing more private label products because of the cheaper pricing,” Divine Chocolate (Booth 10769) EVP General Manager Troy Pearley added. “Premium chocolate shoppers like to explore so heavily promoted brands are seeing decent movement. All mentioned has a negative effect on customer loyalty.”
However, LeDrew went on to note that while consumers might shift to private label offerings in other parts of the store, they’re still more loyal to their favorite sweet treat brands.
Vice-President of Redstone Foods Josh Rothstein told Candy & Snack TODAY that inflation has not had much of an impact on the specialty business, which he said includes more discretionary items and less everyday staples.
“In most cases, consumers accept price increases and business goes on,” he said. “Some items are not viable at a higher price point, but those are generally item specific, not a general trend.”