USA

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• USA
• Confectionery Industry
• Review
• January 2006

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• USA Retail Trends

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• USA Retail Trends

• Luxury Retailers doing well
• Convenience and Drug doing well
• Mass, dollar and supermarket struggling
• Overall retail is growing

Gas pricing affecting all retailers
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• USA Confectionery Industry

• 2005 Confectionery Performance
• 2005 Seasonal Performance

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2005 Retail Confectionery Sales
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2005 Confectionery Sales

• The 2005 U.S. Confectionery Market
• Change
• Retail Sales 27.9 1.8
• Manufacturers Shipments 18.1 1.8
• Domestic Manufacturer Shipments 16.5 1.7
• Imports 2.1 5.3
• Exports 0.8 7.1
• Sales in billions
• NCA Shipment Data and Global Trade Atlas
  Import/Export Data

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2005 Confectionery Sales

• Category Retail Sales Manf. Sales
  Lb. Sales
• Total 27.9 Billion 18.2 billion
  1.8 7.2 Billion 2.3
• Chocolate 15.7 Billion 10.2 billion
  2.0 3.5 Billion 2.6
• Non-Choc. 8.7 Billion 5.7 billion
  0.9 3.2 Billion 3.2
• Gum 3.5 Billion 2.3 billion
  4.1 0.6 Billion 1.4
• NCA Estimates base on 2005 U.S. Dpt. Of Commerce
  311D Report and NCA Monthly Shipment Reports

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Retail Landscape Changing

• 2005 Confectionery
• Channel Sales Growth
• Supermarkets 4.3 -1.1
• Wal-Mart 2.8 3.8
• Mass X Wal-Mart 1.2 0.7
• Convenience Stores 3.8 8.8
• Drug Stores 2.3 1.0
• Warehouse Clubs 3.2 3.6
• Dollar Stores .8 Even
• Vending 1.2 -1.9
• Bulk 1.5 -0.5
• estimates

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Candy and Gum Ranked 3rdAmong 2005 Food
Categories
IRI Food, Drug Mass Excluding Wal-Mart 12/25/05
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2005 Confectionery Sales
Manufacturers Sales Through November, 2005
Lbs. Chocolate Candy 2.0 2.6 Non-Ch
ocolate Candy 0.9 3.2 Gum 4.1 1.4 NCA
Monthly Shipment Reports
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Candy Gum Retail Performance
2005 IRI Sales Results As of December 25,
2005 Channel 52 Week 52 Week Sales
Change Supermarkets 4.3 billion -1.1 Drug
2.3 billion 1.0 Mass X Wal-Mart 1.2
billion 0.7 Convenience 3.8
billion 8.8 Total Candy and Gum 11.6
billion 2.6 Information Resources, Inc. Food,
Drug, Mass Convenience
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2005 Seasonal Performance
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• Confectionery Seasonal Sales
• ( in millions of dollars)
• 2005
• Valentines Day - 970
• Easter - 1,761
• Halloween - 2,088
• Christmas - 1,375

Results and Projection as of January 2006 Source
Sales figures are compiled by National
Confectioners Association based on input from
Information Resources, Inc. NCA/CMA Monthly
Shipment Reports and U.S. Department of Commerce

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• What Affects Seasonal Sales?

• Date/Day of Holiday
• The Economy
• Consumer Confidence
• Consumer Mood
• Shopping Patterns/Habits
• Merchandising Strength/Visibility

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• Holiday Dates/Days

Holiday 2004 2005 2006 Valentines
Day Saturday Monday Tuesday Easter 4/11 3/27
4/16 Halloween Sunday Monday Tuesday
Christmas Saturday Sunday Monday Thanksgiving 1
1/25 11/24 11/23 Shopping Days 30 31 32
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Seasonal Confectionery Trends
2005 2004 2003 2002
2001 VALENTINES -4.0 -3.0
-7.6 6.5 -0.5 EASTER -7.6
5.5 2.2 -2.2 -2.4 HALLOWEEN
2.3 2.4 0.7 -0.4
0.2 CHRISTMAS 2.4 -3.5 -1.4 -3.0
1.7 IRI FDM
NCA projects a 2.3 increase in 2006
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• New Trends

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Trends - What's for 2005/06
Hot

• Limited Editions
• Dark Chocolate
• High End and Gourmet Candy
• High Cocoa Content Chocolates
• Single Origin Chocolates

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• Why are gourmet chocolate sales growing?
• A. Low Pricing
• B. High Pricing
• C. Good news antioxidants
• D. Theyre sexy
• E. Commitment at retail

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• Why are gourmet chocolate sales growing?
• The correct answer is
• C. Good news antioxidants
• D. Theyre sexy
• E. Commitment at retail

Everyday gourmet chocolate candy grew 32 in
2005!
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Trends - What's for 2005/06
Hot

• Sugar Free Candies and Gums
• Licorice
• Single Serve Seasonal Offerings
• Breath Fresheners

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Going Forward
Retail Sales 0.4 everyday sales
Favorable 2006 Seasonal Dates
New Item Introductions Strong
Halloween Sales 2.3
Christmas Sales 2.4
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Confectionery Continues to Grow

• Consumers know what they are buying
• Choice of sizes
• Variety of nutritional choices
• Candy fits in a healthy lifestyle
• Economy Improving
• 3 Favorable Seasonal Dates

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Thank You!