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For the snack giant known for its popular Reese's and Kisses brands, one of Hershey's most delicious growth opportunities lies in peanut butter and non-chocolate snacks, which account for the majority of its sales. In recent years, the Pennsylvania company has spent heavily to strengthen its position in the fast-growing jelly category.
“We expect (soft, chewy candies like jelly) to continue to outpace category growth, and that’s a huge opportunity for us.” Dan “We are very proud of the fact that Hershey is a leading brand in the U.S.,” said Mohnshine, Hershey’s vice president of marketing and responsible for the company’s U.S. confectionery, grocery and protein snacks division, in an interview.When you look at our strategy of expanding our shelf presence and expanding our consumer opportunities, it's very different from what we do in the chocolate business.”
Monesshine said demand for gummy candies (primarily the fruit-flavored Jolly Rancher brand) was up pre-COVID-19, but has surged during the pandemic as consumers have been snacking more at home. And demand hasn’t slowed down since, she said.“A single number that is mid to high.”
Jelly candies offer several benefits that are difficult or impossible to replicate with chocolate. Monesshine Said. You can pack a bunch of different flavors into one bag. It's also shareable, considered valuable, doesn't melt, and is considered a more acceptable indulgence. These attributes help candies like Jolly Rancher attract shoppers by offering them more choices and meeting new consumption opportunities.
The pandemic-induced surge has prompted Hershey to invest millions of dollars to expand its jelly production capacity, which it expects to increase by 50% by 2024. Sweet and savory snack manufacturers now have the flexibility to innovate, invest more in promotions, and sell additional SKUs at retail.
Jolly Rancher recently launched Awesome Reds, a sour jelly mix with flavors like cherry, pomegranate, watermelon, and fruit punch. Hershey's CEO Michele Buck told analysts in February that the company plans to launch a new jelly in 2024 as part of a partnership with basketball star Shaquille O'Neal.
“We can combine his incredible connectivity with the consumer, particularly the young, diverse consumer who is our primary target in the jelly category,” Buck said. “There’s a huge opportunity to bring jelly to market.”
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Courtesy of Kraft Heinz and Frankford Candy
'How high is high'
The surge in popularity of soft candy comes amidst a growing interest in snacking among consumers across all demographics, and candy is one way to meet this need. According to data from Market Growth Report, the jelly candy market is expected to grow from $495 million this year to $750 million by 2032, at a CAGR of 6.4%.
Mike Gilroy, Vice President of TRade Development and Sponsorship at Mars Wrigley The jelly that is said offers candy makers a nearly limitless canvas for innovation. Confectioners can utilize a variety of flavors (spicy, sour, sweet), shapes (ropes, worms, circles, or chewy), multiple layers or flavors, and a variety of textures.
“It’s a question of how high you can go in terms of what you can do. jelly,” Gilroy said. “TThere's a lot more to offer here. With jelly, it's an experiment.”
For existing confectionery companies Snacks offer a way to reach new consumers by leveraging the equity of well-established and recognized brands in the marketplace, a strategy Mars Wrigley has applied to its portfolio of hard candies, including Life Savers, Skittles and Starburst.
Gilroy noted that the growth of gummy candies is on a “strong trajectory” due to the increasing spending power of Gen Z consumers. The candies offer a way to meet the needs of existing shoppers while also attracting long-term users to the brand from the beginning. jelly Before moving on to traditional hard candies, Gillroy noted that Gen Z shoppers are choosing gummy candies at a rate of nearly 60 percent, compared to about half of Millennials.
“The question is what can you do with jelly. There is so much more to offer.”
Mike Gilroy
Vice President, Trade Development and Sponsorships, Mars Wrigley
“It’s a great way to get people to buy into your brand,” said Mike Kostyo, vice president of consulting firm Menu Matters. jelly It has properties that make it an attractive snack for both adult and young consumers.
Especially many older people MillennialsWe grew up with gummy worms or bears as children. Now that we are adults, we are nostalgic and seek out snacks that remind us of our past. It is no coincidence that adult vitamins are often available in gummy form. Costio said.
For Generation Z and other younger generations, gummy candies are a popular snack that can be eaten and played with because of their bright colors and fluffy texture.
yet, Kostyo doubts whether jelly candies will remain popular. It is unlikely that candies will disappear, but the candy market tends to innovate quickly with new shapes and flavors. Inevitably, something else will come onto the market, turning many consumers away from jelly candies.
“It’s more of a temporary phenomenon than a true trend.” “In five to 10 years, the confectionery industry will move on to the next hottest and greatest thing,” Costio predicted.
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Permission from Ferrara
New life for a 10-year-old brand
Despite the uncertain future, candy manufacturers of all sizes are actively investing resources in jelly candy production and are finding success in doing so.
Frankford Candy has dominated the market for nearly 80 years with seasonal items like chocolate bunnies and Santas.
But in the 1990s, with Hershey, Mars, and Nestlé entering the market, the Philadelphia company diversified its focus to focus more on gummies. Its foray into this niche began with Krabby Patties. 2003. Frankford Twenty years later, it expanded further into jelly form under a licensing agreement with Kraft Heinz.
Since then, Frankford has developed jelly products for several of Kraft Heinz’s most popular brands, including Kraft Macaroni & Cheese, Claussen Pickles and Oscar Mayer hot dogs. Jelly is now the fastest-growing segment of the business, he said, “far outpacing” chocolate. Molly Jacobson, Frankford's director of business development.
“We spend a lot of time thinking about how to grow.Crabbi Patty and Kraft Heinz) are pushing the boundaries in the jelly category.” “Jelly has equaled, or frankly surpassed, chocolate in importance and development at Frankford in terms of our focus,” Jacobson said.
The biggest advantage for Frankfords is that, unlike chocolate, flavor development is not as complicated. Instead, artwork and packaging play a major role in making the candy resonate with consumers. This is a big reason why Frankfords can bring a jelly innovation to market in about 12 months, compared to about twice as long for chocolate.
For some brands, jelly candies play a vital role in driving sales and staying relevant to consumers who have a wide range of choices.
Gregory Guidotti, Chief Marketing Officer Ferrara Candy said more Gen Z consumers today are aware of the Nerds brand because of its popular Gummy Clusters, a line of gummy candies covered in little nerds that launched in 2020, than the two-flavor rectangular boxes their parents enjoyed as kids.
Cluster sales are growing at a 40% rate compared to the low single digits of traditional nerds. Guidotti noted that without Jelly, nerd sales would be closer to $100 million a year, compared to $600 million today.
“This expands the relevance of the business.” “The cluster changed the profile and trajectory of the entire category,” Guidotti said.
Even before Clusters launched, Ferrara had decades of experience in the gummy candy industry. Through small brands like BWe are running out of forests and trolleys.
The Illinois-based company had the technical know-how and often made gummy candy products for other companies, but it had no brand that could meaningfully strengthen its position in the category.
When did that change? Nestlé sold its U.S. confectionery business for $2.8 billion in 2018. Ferrara inherited several brands as part of the deal. Ferrara added SweeTarts to the mix along with Nerds, giving it two key products it could use to innovate its jelly business.
Guidotti said that just because jelly is a popular business, that doesn't mean every brand should compete in this segment. Only a few of Ferrara's 30-plus brands have entered the jelly market.
“You have to understand where your consumers are and how your brand can extend to them.” Guidotti said, “TThe great thing about Ferrara is that we don't have to try everything across the portfolio because we have all the brands, so we can choose based on the positioning of the brand, the promise of the brand in the market. We can be very selective about what works for jelly.
