Confection giants find gummy sales anything but soft

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For a snacking giant known for its popular Reese’s and Kisses brands, one of Hershey’s tastiest growth opportunities lies in a treat lacking the peanut butter and chocolate responsible for much of its sales. During the last few years, the Pennsylvania company has spent big money to boost its presence in the fast-growing gummies category.

“Our expectation is that [soft and chewy candies like gummies are] going to continue to outpace category growth, and for us, that’s a big opportunity,” Dan Mohnshine, Hershey’s vice president of marketing, U.S. confection, grocery and protein snacks, said in an interview. “When we look at the strategy of expanding our presence on the shelf, expanding consumer occasions, this is a big difference from what we have on the chocolate side of the business.”

Mohnshine said demand for gummies — which largely centers around its fruity Jolly Rancher brand — was increasing before COVID-19, but spiked during the pandemic as consumers snacked more at home. It hasn’t let up since, continuing to post growth in the “mid-to-high-single-digits.”

Gummies offer several advantages that are harder or impossible to replicate with chocolates, Mohnshine said. Several different flavors can be put in one bag. They’re also shareable, seen as a good value, don’t melt and are viewed as a more permissible indulgence. These attributes help candies such as Jolly Rancher attract shoppers by giving the public additional choices and meeting new consumption occasions.  

The pandemic upswing prompted Hershey to spend millions of dollars to shore up its gummies production capacity, which is expected to surge 50% in 2024. The sweet and salty snacks manufacturer now has additional flexibility to boost innovation, invest more in promotions and get additional SKUs carried at retail.

Jolly Rancher recently debuted Awesome Reds, a sour gummy mix with flavors like cherry, pomegranate, watermelon and fruit punch. Michele Buck, Hershey’s CEO, told analysts in February the company also plans to launch a new gummy in 2024 as part of a partnership with basketball star Shaquille O’Neal.

“We get to combine his tremendous connectivity with consumers, especially young diverse consumers, who are our key target on the gummy segment,” Buck said. “There is a huge opportunity to bring gummies to the market.”

Two photos of products on counters: A box of Gummy Lunchables Pepperoni Pizza Kit with three mini pizzas on a plate on the left, and Gummy Lunchables Cracker Stackers with pieces on a plate at right.

Optional Caption

Courtesy of Kraft Heinz and Frankford Candy

 

‘How high is high’

The surge in popularity of the soft candy comes as consumers across all demographics show a growing interest in snacking, with candy one way to meet that need. The gummy candy market is forecast to reach $750 million in 2032 from $495 million this year, a compound annual growth rate of 6.4%, according to data from Market Growth Report.

Mike Gilroy, vice president of trade development and sponsorship at Mars Wrigley, said gummies offer candy makers a nearly unlimited canvas for innovation. Confectioners can tap into different flavors (spicy, sour, sweet,) shapes (ropes, worms, circles or chews), multiple layers or flavors as well as varying textures. 

“It’s a question of how high is high in terms of what can be done with gummies,” Gilroy said. “There’s just so much more to offer. With gummies, it’s the experimentation.”

For established confection companies, the treats provide a way to reach new consumers by tapping into the equity of well-established and recognizable brands in the marketplace. It’s a strategy that Mars Wrigley has brought to hard candies in its portfolio, including Life Savers, Skittles and Starburst. 

Gummy growth remains on a “strong trajectory” due largely to the increasing purchasing power of Gen Z consumers, Gilroy noted. The candy provides a way to meet an existing shopper need while attracting long-term users to a brand by getting them to start with the gummy before gravitating to the traditional hard candy. Gen Z shoppers, Gilroy noted, choose a gummy nearly 60% of the time compared to about half for millennials.


“It’s a question of how high is high in terms of what can be done with gummies. There’s just so much more to offer.”

Mike Gilroy

Vice president of trade development and sponsorship, Mars Wrigley


Mike Kostyo, a vice president at consulting firm Menu Matters, said gummies have attributes that make them an attractive treat for both adults and young consumers.

Many older individuals, especially millennials, grew up with gummy worms or bears as kids. Now adults, these individuals are feeling nostalgic and turning to treats that remind them of the past. It’s not a coincidence that adult vitamins are often available in gummy form, Kostyo said.

For Gen Z and other younger people, gummies are inviting because they are brightly colored and squishy, providing a food for them to play with and eat.

Source: fooddive.com

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