1. Confectionery Industry
USA
Confectionery Industry
Review
January 2006

2. USA Retail Trends

3. Gas pricing affecting all retailers
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

4. USA Confectionery Industry
2005 Confectionery Performance
2005 Seasonal Performance

5. 2005 Retail Confectionery Sales
Chuck
The total market for confections was $20.0 billion, with sales composed of 55% chocolate, 32% non chocolate and 9% gum.

6. The 2005 U.S. Confectionery Market
2005 Confectionery Sales
The 2005 U.S. Confectionery Market %
$ Change
Retail Sales $ %
Manufacturers Shipments $ %
Domestic Manufacturer Shipments $ %
Imports $ %
Exports $ %
Sales in billions
NCA Shipment Data and Global Trade Atlas Import/Export Data
Chuck
The total market for confections was $20.0 billion, with sales composed of 55% chocolate, 32% non chocolate and 9% gum.

7. 2005 Confectionery Sales
Category Retail Sales Manf. Sales % Lb. Sales %
Total $27.9 Billion $18.2 billion % 7.2 Billion %
Chocolate $15.7 Billion $10.2 billion % 3.5 Billion %
Non-Choc. $8.7 Billion $5.7 billion % 3.2 Billion %
Gum $3.5 Billion $2.3 billion % 0.6 Billion %
NCA Estimates base on 2005 U.S. Dpt. Of Commerce 311D Report and NCA Monthly Shipment Reports
Chuck
The total market for confections was $20.0 billion, with sales composed of 55% chocolate, 32% non chocolate and 9% gum.

8. Retail Landscape Changing
2005 Confectionery
Channel $ Sales % Growth
Supermarkets $ %
*Wal-Mart $ %
Mass X Wal-Mart $ %
Convenience Stores $ %
Drug Stores $ %
*Warehouse Clubs $ %
*Dollar Stores $.8 Even
Vending $ %
*Bulk $
*estimates

9. Candy and Gum Ranked 3rd Among 2005 Food Categories
IRI Food, Drug & Mass
Excluding Wal-Mart 12/25/05 2

10. 2005 Confectionery Sales Manufacturers Sales Through November, 2005
$ Lbs.
Chocolate Candy +2.0% +2.6%
Non-Chocolate Candy +0.9% +3.2%
Gum % +1.4%
NCA Monthly Shipment Reports
Chuck
The total market for confections was $20.0 billion, with sales composed of 55% chocolate, 32% non chocolate and 9% gum.

11. 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
Jim
Looking at channel dynamics, for supermarkets, mass and drug, experiences declines compared to last year.
Supermarkets growth rate was down 1.0, mass was down 3.0 and
drug was up 3.6 2

12. 2005
Seasonal Performance

13. Confectionery Seasonal Sales (** in millions of dollars)
2005
Valentine’s 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

14. What Affects Seasonal Sales?
Date/Day of Holiday
The Economy
Consumer Confidence
Consumer Mood
Shopping Patterns/Habits
Merchandising Strength/Visibility

15. Holiday Dates/Days Holiday 2004 2005 2006
Valentine’s Day Saturday Monday Tuesday
Easter 4/11 3/27 4/16
Halloween Sunday Monday Tuesday
Christmas Saturday Sunday Monday
Thanksgiving 11/25 11/24 11/23
Shopping Days

16. Seasonal Confectionery Trends
VALENTINE’S % % % +6.5% % EASTER % % % -2.2% %
HALLOWEEN % % % -0.4% %
CHRISTMAS +2.4% % % -3.0% %
* IRI FD&M
NCA projects a 2.3% increase in 2006

17. New Trends

18. Trends - What's for 2005/06 Hot Limited Editions Dark Chocolate
High End and Gourmet Candy
High Cocoa Content Chocolates
Single Origin Chocolates

19. Why are gourmet chocolate sales growing?
A. Low Pricing
B. High Pricing
C. Good news –antioxidants
D. They’re sexy
E. Commitment at retail

20. Why are gourmet chocolate sales growing?
The correct answer is:
C. Good news –antioxidants
D. They’re sexy
E. Commitment at retail
Everyday gourmet
chocolate candy
grew
32%
in 2005!

21. Trends - What's for 2005/06 Hot Sugar Free Candies and Gums Licorice
Single Serve Seasonal Offerings
Breath Fresheners

22. New Item Introductions
Going Forward
Retail Sales
+0.4%
everyday sales
Favorable
2006 Seasonal Dates
New Item Introductions
Strong
Halloween Sales
+2.3%
Christmas Sales
+2.4%

23. 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

24. Thank You!