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Turbulent and Successful Times For The Chocolate Candy Industry

These are turbulent and successful times for the chocolate candy industry.  American manufacturers led the market, benefiting from weaker currencies.  Mars reached the candy world stratosphere with its earth-shattering acquisition of the former chewing gum chief Wm. Wrigley, Jr. Co. last year.  Meanwhile, industry publications report slumps in per unit sales, (even while total sales grew), resulting from raised prices for many of the most popular product brands.   Nevertheless, the resilience of chocolate bar profits in an otherwise distressed economy is remarkable.

The biggest news to hit is that according to year end financials, revenues for Mars may now exceed a sugar-shocking $15.5 billion.  With US headquarters in Hacketstown, NJ, they may now have their closest competition (French Nestle and British Cadbury) jostling for a dismal 2nd place for the foreseeable future.  But even as Mars soared, others dipped.

Experts used variations in national currencies to explain low sales numbers of some companies against the US market.  Internationally, the stronger dollar’s impact was felt in slight declines for many European, South Korean and Mexican companies.  This factor was often strong enough to offset any sales increases. 

According to research by Information Resources, Inc., American companies continued to dominate the chocolate candy bar business by owning the majority of nearly $5 billion in sales.  Although the buyout might have boosted Mars’ bottom line, they carried their fair share of chocolate sales occupying 5 of the top 10 candy bar sellers:  “M&Ms” did the best of any brand with a whopping over $106 million in sales.  Next among the Mars bars followed “Snickers”, “Twix”, “3 Musketeers” and “Milkyway”, their lowest seller at a relatively paltry $19 million. 

Clearly, Mars did well, but among the 20 highest selling brands, Hershey’s enjoyed the highest per unit gains with their “Cookies and Crème” line recording over 44% change during the same period.  Hershey’s signature bar made a respectable $95 plus million and their Reese’s came in solid third with nearly no percentage change from last year’s numbers.  Hershey’s “Special Dark” was sold the least of their products, reporting an over 11 point decline, landing them in the bottom of the bunch.  And the worst performer by far was Nestle’s “Crunch” bar which posted a 20.8% decrease from last year’s sales, but still managed to ring up over $14 million in revenue.

Analysts debate whether these statistics foretell of a push to innovate or simplify product lines to revive unit buying.  Evidence of the success using both tactics can be seen, but traditional consumer favorites will be tough to beat.  No matter how they respond to market forces, suppliers can smile sweetly for now.
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