Confectionery Wholesaling in The US Industry Report

INDUSTRY REPORT 42445
Confectionery Wholesaling in the US
Sugar rush: Pent-up demand for previously postponed celebrations is expected to boost
industry demand
Marley Brocker | December 2021
IBISWorld.com 1-800-330-3772 info@IBISWorld.com

Confectionery Wholesaling in the US December 2021
Contents
COVID-19 (Coronavirus) Impact Update.............................3 COMPETITIVE LANDSCAPE.......................... 23
ABOUT THIS INDUSTRY.................................. 5 Market Share Concentration............................................. 23
Key Success Factors........................................................23
Industry Definition................................................................5 Cost Structure Benchmarks............................................. 24
Major Players...................................................................... 5 Basis of Competition......................................................... 27
Main Activities..................................................................... 5 Barriers to Entry............................................................... 28
Supply Chain....................................................................... 6 Industry Globalization........................................................ 28
INDUSTRY AT A GLANCE................................ 7 MAJOR COMPANIES...................................... 30

Executive Summary............................................................ 9 Market Share Overview..................................................... 30
Related Companies........................................................... 30
INDUSTRY PERFORMANCE..........................10 Frito-Lay North America, Inc............................................. 31
Performance Food Group Co............................................ 33
Key External Drivers.........................................................10 Mars Inc.............................................................................35
Current Performance........................................................ 11 Hershey Co....................................................................... 37
McLane Company Inc....................................................... 39
INDUSTRY OUTLOOK.................................... 14
OPERATING CONDITIONS............................ 41
Outlook.............................................................................. 14
Industry Life Cycle............................................................. 16 Capital Intensity................................................................. 41
Technology & Systems......................................................42
PRODUCTS & MARKETS............................... 17 Revenue Volatility..............................................................43
Regulation & Policy........................................................... 43
Supply Chain..................................................................... 17 Industry Assistance........................................................... 44
Products & Services.......................................................... 17
Demand Determinants...................................................... 18 KEY STATISTICS............................................ 45
Major Markets....................................................................19
Business Locations........................................................... 21 Industry Data..................................................................... 45
Annual Change..................................................................45
Key Ratios......................................................................... 45
Industry Financial Statement............................................. 46
ADDITIONAL RESOURCES............................48
Additional Resources........................................................ 48
Industry Jargon..................................................................48
Glossary............................................................................ 48
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COVID-19 IBISWorld's analysts constantly monitor the industry impacts of current events in real-time – here is an update of
(Coronavirus) how this industry is likely to be impacted as a result of the global COVID-19 pandemic:
Impact Update • The Confectionery Wholesaling industry's revenue declined in 2020 due to economic slowdown in the wake of the
COVID- 19 (coronavirus) pandemic. While consumption of some industry products increased, disruptions stemming
from social distancing guidelines, business closures and reduced interactions contributed to the decline. For more
information, please see the Current Performance section.
• Pent-up demand for celebrations and a gradual return to pre-pandemic activities is expected to contribute to
industry revenue growth in 2021. For more information, please see the Current Performance section.
• Input price volatility, namely sugar, and ongoing supply chain disruptions are expected to limit industry profit
growth. For more information, please see the Cost Structure section.
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About IBISWorld
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are truly global in nature.
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About This Industry

Industry Definition Operators in this industry primarily wholesale a range of chocolate and nonchocolate candy, in addition to a range of
savory snacks, such as nuts, popcorn and chips. Industry operators resell these products to supermarkets, specialty
confectionery retail outlets, convenience stores and vending machine operators.
Major Players Frito-Lay North America, Inc.
Performance Food Group Co
Mars Inc.
Hershey Co
McLane Company Inc.
Mondelez International, Inc.
Core-Mark Holding Company, Inc.
Main Activities The primary activities of this industry are:
Candy wholesaling
Chewing gum wholesaling
Potato chips wholesaling
Chocolate candy wholesaling
Freshly made confectionery wholesaling
Corn chips and related corn snacks wholesaling
Fountain fruits and syrups wholesaling
The major products and services in this industry are:
Chocolate
Non-chocolate candy
Gum and mints
Other
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Supply Chain
SIMILAR INDUSTRIES
Grocery Wholesaling in the US Frozen Food Wholesaling in the Dairy Wholesaling in the US Soft Drink, Baked Goods & Other
US Grocery Wholesaling in the US
RELATED INTERNATIONAL INDUSTRIES
Soft Drink and Pre-Packaged Confectionery Wholesaling in the Soft Drink and Pre-Packaged Food, Beverage & Tobacco
Food Wholesaling in Australia UK Food Wholesaling in New Wholesaling in Ireland
Zealand
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Industry at a Glance
Key Statistics Key External Drivers % = 2016–21 Annual Growth
$53.0bn 3.1% 2.3%

Revenue Per capita disposable income Consumer spending
Annual Growth Annual Growth Annual Growth

9.3pp -0.3%
Percentage of business Per capita sugar and sweetener
2016–2021 2021–2026 2016–2026 conducted online consumption
-0.5% 1.5% 3.9%
Price of sugar
$1.7bn Industry Structure

Profit
Annual Growth Annual Growth

POSITIVE IMPACT
2016–2021 2016–2021
Revenue Volatility Regulation & Policy
-7.1% Low Light / Increasing
Technology Change Industry Globalization
Low Low / Steady
3.2% MIXED IMPACT

Profit Margin Life Cycle Capital Intensity
Mature Medium
Annual Growth Annual Growth
Competition
2016–2021 2016–2021
Medium / Steady
-1.3pp
NEGATIVE IMPACT
Industry Assistance Concentration
Low / Steady High
4,102 Barriers to Entry
Businesses Low / Steady
2016–2021 2021–2026 2016–2026

Key Trends
-5.0% -1.7%
 While sales of many discretionary items declined amid the
pandemic, sales of chocolates, including premium brands
and fine chocolates, increased
45,096
Employment  For smaller wholesalers with less purchasing power, profit
growth is expected to be subdued
 The industry has been marked by consolidation over the
2016–2021 2021–2026 2016–2026
past five years
-3.7% 0.3%
 IBISWorld expects a shift toward convenient and portable
healthy snacks
 Confectionery distributors will likely widen their portfolios

$2.7bn  Small industry operators will likely struggle
Wages
 Increased consumer spending and pent-up demand for
celebrations is expected to revive the industry
2016–2021 2021–2026 2016–2026
-2.8% 0.6%
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Products & Services Segmentation
Major Players SWOT
STRENGTHS
Low Volatility
Low Imports
Low Customer Class Concentration
WEAKNESSES
Low & Steady Barriers to Entry

Low & Steady Level of Assistance
Low Profit vs. Sector Average
High Product/Service Concentration
Low Revenue per Employee
High Capital Requirements
OPPORTUNITIES
High Revenue Growth (2021-2026)

High Performance Drivers
Per capita disposable income
THREATS
Low Revenue Growth (2005-2021)

Low Revenue Growth (2016-2021)
Low Outlier Growth
Per capita sugar and sweetener consumption
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Executive Summary Sugar rush: Pent-up demand for previously postponed celebrations is
expected to boost industry demand
The Confectionery Wholesaling industry includes merchant wholesalers that resell a variety of candy and snack
products to a multitude of downstream users. The industry includes the wholesale divisions of major snack
manufacturers, such as Mars Inc. and PepsiCo Inc. Over the five years to 2021, industry sales have struggled
against rising health consciousness among consumers, which reduced demand for traditional sweets. Moreover, a
growing number of manufacturers have introduced direct-selling platforms online, while major industry players have
integrated supply chains, which has heightened competition between the largest companies and small wholesalers.
Thus, the current period has been marked by consolidation activity, especially as major players seek to offer
healthier product lines. Over the five years to 2021, industry revenue is expected to decline an annualized 0.5% to
total $53.0 billion.
In the wake of the COVID-19 (coronavirus) pandemic, significant disruption to downstream markets threatened
industry wholesalers. However, diversification in industry products shielded this industry from substantial declines.
Relatively low-price points of more traditional snacks and sweets make them staple items for many, and thus,
demand is less sensitive to economic fluctuations. Moreover, according to the National Confectioner's Association,
quarantined consumers turned to sweets, namely chocolate, in the pandemic to cure boredom and provide comfort.
A decline in sales of on-the-go purchases, especially gum and mints, and higher-profit premium items contributed to
the revenue decline. In 2021, increased consumer spending and pent-up demand for celebrations is expected to
revive the industry, albeit, industry profit is expected to increase marginally, constrained by a spike in the price of
sugar and supply chain woes. In 2021, industry revenue is poised to increase an estimated 4.8%.
Over the five years to 2026, the industry is expected to benefit from improving economic conditions and a wider
variety of options. Early in the outlook period, boosts in consumer spending will support sales of confectionary items,
including costlier premium or artisanal products. Manufacturers are expected to increasingly expand product mixes
to cater to shifting consumer preferences, namely through acquisitions, and offer healthier alternatives and
sustainably sourced options to consumers. Thus, industry revenue is forecast to increase an annualized 1.4% to
$57.0 billion.
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Industry Performance
Key External Per capita disposable income

Drivers
Changes in per capita disposable income affects demand for industry products. As consumers gain more disposable
income, their likelihood to purchase discretionary grocery items, such as chocolate and candy, increases. Similarly,
an increase in per capita income likely encourages the purchase of premium industry products. In 2021, per capita
disposable income is expected to increase, presenting a potential opportunity for industry operators.
Per capita sugar and sweetener consumption
The per capita consumption of sugar and sweetener is informed by consumer health preferences, as well as general
tastes and trends. Shifting preferences to healthier options has gradually reduced consumption of sugars and
sweeteners. Since sugar-based items generate a significant share of industry revenue, a decline in per capita
consumption adversely affects industry revenue growth. In 2021, per capita sugar and sweetener consumption is
expected to decline, posing a potential threat to industry operators.
Consumer spending
Consumer spending measures the amount consumers are spending on goods, and, thus, as consumer spending
increases, demand for confectionary items generally rises as well. Since many industry items are discretionary in
nature, demand often declines as spending falls, especially for premium or specialty products. In 2021, consumer
spending is expected to increase.
Price of sugar
Sugar is a key input in producing industry products, including chocolate products, non-chocolate candies, gum and
savory snacks, among others. As the price of sugar rises, manufacturers increase the purchasing price charged to
industry wholesalers. A wholesaler's ability to effectively pass on the additional cost on to customers will affect profit.
Moreover, significant price increases could potentially reduce demand for some industry products. Thus, changes in
the price of sugar could either benefit or harm an industry wholesaler. In 2021, the price of sugar is expected to
increase.
Percentage of business conducted online
In recent years, an increasing number of confectionary manufacturers have adopted online platforms to sell industry
products directly to end markets or consumers. Selling directly lowers the cost for end markets because it eliminates
additional costs from transportation and markup by the intermediary. Thus, a greater amount of business conducted
online could threaten industry operators. In 2021, the percentage of business conducted online is expected to
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increase.
Current The Confectionery Wholesaling industry, which distributes candy and

Performance packaged snacks to a variety of retail outlets, has declined over the five
years to 2021.
While rising health consciousness has constrained demand for candy bars and other key industry products,
upstream snack manufacturers have responded by introducing new products, backed by aggressive advertising and
promotional campaigns. Moreover, to cater toward shifting consumer preference for both healthier and sustainably
sourced grocery items, the industry's largest players have acquired innovative health-focused companies to broaden
product offerings and lessen the effect on industry revenue. Most recently, The Hershey Company (Hershey's)
purchased Lily's Sweets, a premium producer of low-sugar organic confections, in June 2021. Furthermore,
declining industry revenue over the past five years has been partially offset by a rise in demand for fine chocolates,
which has been supported by rising per capita disposable income during the same period. In fact, while sales of
many discretionary items declined amid the COVID-19 (coronavirus) pandemic, sales of chocolates, including
premium brands and fine chocolates, increased as consumers sought out ways to find comfort and alleviate
boredom during stay-at-home measures. However, steep declines in demand for other industry products, such as
gum and mints, contributed to a coronavirus-related fall in revenue in 2020. In 2021, pent-up demand for
celebrations and spending is expected to drive revenue growth; however, declines occurring during the majority of
the period will offset the growth in 2021. Thus, industry revenue is expected to decline an annualized 0.5% to $53.0
billion over the five years to 2021.
CORONAVIRUS
Following the onset of the coronavirus, consumers quickly adjusted

shopping habits to accommodate lockdown measures, store closures and
health concerns.
Furthermore, spending on discretionary grocery items, including sweets and snacks, was threatened by a sudden
increase in the unemployment rate and general uncertainties in the economy. However, the general low-price points
of many industry products have made them staple items for many consumers, and thus, demand for these items is
less sensitive to economic fluctuations. Moreover, as the pandemic continued, many consumers sought solace by
indulging in sweet treats and savory snacks. In fact, according to the National Confectioner's Association, chocolate
sales increased 4.2% in 2020 while non-chocolate sales increased 2.9%. However, a portion of these sales was
likely captured by manufacturers direct selling to consumers via e-commerce platforms, as more consumers
shopped online than ever before amid quarantines, negating the effect on industry revenue. Sales of other industry
products, such as gums, mints and breath fresheners plummeted an estimated 22.7%. Since these items are largely
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considered impulse purchases, bought on-the-go by consumers en route to school or work, sales declined as more
time was spent at home than ever before. Overall, industry revenue declined 2.8% in 2020.
Following vaccine distribution, pent-up demand for shopping and holiday celebrations, namely Halloween and
Christmas, are expected to renew demand for confectionary wholesalers. For instance, the National Retail
Federation estimates spending on candy and treats for Halloween to reach a record $10.1 billion in 2021, increasing
nearly 42.0% when compared with 2020 levels. Moreover, wholesalers have adjusted to an earlier and longer
ordering season as retailers stocked shelves earlier than previous years to meet high demand amid ongoing supply
chain disruptions. While wholesalers are expected to benefit from historically high sales this holiday season as
consumers makeup for postponed celebrations, higher transportation costs and an expected 5.2% spike in the price
of sugar are expected to lend to an only marginal profit recovery. For smaller wholesalers with less purchasing
power, profit growth is expected to be even more subdued. Furthermore, the industry's hardest hit product segment,
gum and mints, is expected to have a slower recovery than expected as concerns regarding coronavirus variants
delayed a return to in-person interactions. Still, industry revenue is anticipated to recover 4.8% by year-end 2021.
INDUSTRY TRENDS
Although specific consumption trends are dependent on factors such as

age, income or gender, the industry has adjusted to an overarching shift
in consumer preferences over the past five years.
For instance, while milk chocolate has historically been the most preferred variety, an increasing number of
consumers now select dark chocolate for its perceived health benefits. According to Cargill's ChocoLogic study,
52.0% of consumers choose dark chocolate because they view it as a healthier option. To stay aligned with
changing trends, The Hershey Company (Hershey's) has extended its own line of sugar-free options, in addition to
its June 2021 acquisition of Lily's Sweets, a producer of low-sugar alternatives. Wholesalers have also
accommodated rising consumer interest in sustainably sourced products, including products produced with fair trade
cocoa, and snacks offering higher nutritional value or health benefits.
INDUSTRY CONSOLIDATION
The industry has been marked by consolidation over the past five years
as the industry's largest operators, including Frito-Lay North America Inc.
and Mars Inc., acquired more innovative companies to broaden product
offerings.
Industry concentration has also increased because of large, corporate retail chains signing longer-term supply
contracts with key confectionery wholesalers. For example, McLane Company Inc. has reinforced its partnership
with large retail chains, such as 7-Eleven Inc. and Family Dollar, while Core-Mark Holding Company Inc. entered
into agreements with the Kroger Company and strengthened its supplier agreement with the Rite-Aid Corporation
just prior to the period. Contracts ensure wholesalers can rely on quick turnover to reduce carrying costs.
An increasing amount of vertical integration has pressured some wholesalers to exit the industry. Large, vertically
integrated companies are readily able to manufacture and sell their own products, which enables retailers to
purchase industry products at lower prices. Wholesalers add markups to compensate for purchase, transportation
and distribution costs. Thus, smaller confectionary wholesalers, lacking economies of scale, have experienced
heightened competition from manufacturers over the past five years. Resultingly, the number of industry wholesalers
has declined an annualized 5.0% to 4,102 companies over the five years to 2021. A falling number of industry
wholesalers combined with an increasing amount of automation has reduced industry employment as well, declining
an annualized 3.7% to 45,096 employees.
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Historical Performance Data

Per capita
sugar and
Domestic sweetener
Revenue IVA Establishments Enterprises Employment Exports Imports Wages Demand consumption
Year ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m) (Pounds (lb))
2012 53,216 5,567 4,227 3,883 55,610 N/A N/A 3,385 N/A 129
2013 53,340 5,985 4,892 3,668 63,973 N/A N/A 4,011 N/A 128
2014 54,183 5,278 5,921 4,630 49,353 N/A N/A 3,057 N/A 129
2015 54,731 5,277 6,688 5,252 50,744 N/A N/A 2,924 N/A 129
2016 54,485 5,964 6,846 5,300 54,396 N/A N/A 3,130 N/A 128
2017 53,991 4,639 5,670 4,836 45,921 N/A N/A 2,641 N/A 127
2018 52,921 4,463 4,809 4,195 45,196 N/A N/A 2,770 N/A 126
2019 52,073 5,104 4,615 4,050 45,096 N/A N/A 2,708 N/A 126
2020 50,601 4,413 4,578 4,026 44,064 N/A N/A 2,643 N/A 125
2021 53,046 4,822 4,664 4,102 45,096 N/A N/A 2,718 N/A 124
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Industry Outlook
Outlook The Confectionery Wholesaling industry is expected to benefit from
improving economic conditions following alleviating concerns related to
the COVID-19 (coronavirus) pandemic.
By year-end 2021, increased consumer spending and pent-up demand for previously postponed celebrations is
expected to boost industry revenue. While year-over-over increases in consumer spending will sustain industry
revenue growth over the five years to 2026, other trends expected to occur in the industry will likely drive the
industry forward. Although per capita sugar consumption is estimated to decline over the next five years,
manufacturers are expected to increasingly expand product lines of healthier alternatives. Acquisitions during the
current period, such as The Hershey Company's purchase of Lily's, a premium, low-sugar chocolate brand,
demonstrate the industry's attempt to cater to consumers' shifting preferences. An increase in demand for organic
and sustainably sourced products will likely also drive industry revenue growth. According to a study by Cargill,
68.0% of consumers are willing to pay for more chocolate made with sustainably sourced cocoa. Overall, IBISWorld
expects industry revenue to increase at an annualized rate of 1.4% to $57.0 billion over the five years to 2026.
HEALTH TRENDS AND CHANGING CONSUMER TASTES
A growing emphasis toward health consciousness and sustainable

practices is expected to continue to direct consumption patterns and the
industry's product offerings over the next five years.
Although most product development changes will occur in upstream confectionery manufacturing channels, industry
wholesalers will also feel the effects of this shift as demand for their services directly correlates with demand for
confectionery products. To remain competitive and appeal to all markets and distribution channels, confectionery
distributors will likely widen their portfolios to include a broader range of both mainstream and premium varieties.
The premium chocolates product segment already outperforms mainstream chocolate in year-to-year sales growth,
according to estimates from the National Confectioners Association. Nonetheless, continuing changes in nutritional
awareness and consumer preferences are likely to make premium confectioneries an even stronger segment over
the next five years. Consumers, especially those who demand natural and ethically sourced ingredients, are
prepared to pay premium prices for products that feature organic or fair-trade labeling. Organic and fair-trade
chocolates were once considered the exclusive niche of smaller gourmet producers, but major companies are
expected to increasingly integrate sustainable practices (and seeking third-party certification) to maintain positive
perception. For instance, in 2020, Mars Inc. announced a partnership with Fairtrade International to purchase all of
its cocoa from sustainable sources. Other major producers are likely to follow suit and expand their line of organic or
fair-trade chocolate products to encompass more of their core products. These trends are expected to revitalize
demand from health-conscious consumers over the next five years. More notably, while premium chocolate items
warrant higher prices due to increased production costs, consumers are expected to increase their willingness to
pay for these items, especially among millennial adults. Growth in the premium product category is likely to aid
industry profit growth.
Although some industry products experienced heightened demand amid the pandemic, other items, namely gums
and mints, experienced steep declines. Concerns regarding the spread of the Delta variant slowed a return to pre-
pandemic activities in 2021, and thus, this segment is expected to rebound in 2022 as more consumers return to
school and work, making more frequent on-the-go trips to convenience and similar stores. Other purchases
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frequently made on impulse, such as snack bars, are expected to rebound as well. Over the next five years,
IBISWorld expects a greater shift toward convenient and portable healthy snacks, such as fruit and nut bars, low-fat
and low-sodium potato chips and organic varieties of snack foods. In particular, major confectionery producers are
developing miniature, fun-size varieties of their existing product lines to better appeal to younger Americans with
active lifestyles. These trends are likely to drive demand from convenience stores and pharmacies, major sources of
revenue for wholesale distributors.
INDUSTRY LANDSCAPE
Over the five years to 2026, small industry operators will likely struggle as
retailers continue to embrace vertically integrated manufacturers,
sourcing inventory from producers directly to reduce purchase costs.
Industry items sold directly from manufacturers are generally available at lower prices since eliminating an
intermediary reduces transportation costs and mark-ups. Moreover, the industry will likely be marked by increased
consolidation activity. Larger companies are expected to acquire smaller companies struggling to compete with
wholesalers benefiting from extensive economies of scale and supply contracts. Moreover, the industry's largest
players are anticipated to acquire industry wholesalers providing healthier alternatives, premium offerings and
sustainable, fair-trade certified cocoa products. Thus, the number of industry companies is expected to decline an
annualized 1.7% to 3,757 companies. Despite industry consolidation and increasing automation, the number of
industry employees is estimated to increase, albeit minimally, an annualized 0.3% to total 45,868 employees. As the
industry consolidates, the industry's major companies are expected to earn more market share and expand
accordingly. Thus, is it likely industry employment growth will occur at this level versus among smaller wholesalers.
Performance Outlook Data

Per capita
sugar and
Domestic sweetener
2021 53,046 4,822 4,664 4,102 45,096 N/A N/A 2,718 N/A 124
2022 53,637 4,878 4,604 4,049 45,188 N/A N/A 2,729 N/A 123
2023 54,381 4,937 4,495 3,948 45,221 N/A N/A 2,738 N/A 122
2024 55,205 5,010 4,372 3,835 45,165 N/A N/A 2,744 N/A 121
2025 56,062 5,085 4,307 3,772 45,431 N/A N/A 2,765 N/A 120
2026 56,993 5,170 4,296 3,757 45,868 N/A N/A 2,796 N/A 119
2027 57,871 5,227 4,296 3,754 46,315 N/A N/A 2,826 N/A 118
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Industry Life Cycle The life cycle stage of this industry is Mature
LIFE CYCLE REASONS
The industry is undergoing consolidation

Confectionery and snacks are common household food items with established markets
The industry is characterized by an exceptionally high level of brand recognition
The Confectionery Wholesaling industry is in the mature stage of its life cycle. Industry value added (IVA), which
measures an industry's contribution to the overall economy, is forecast to decline an annualized 1.4% over the 10
years to 2026. In comparison, gross domestic product (GDP) is projected to grow an annualized 2.1% during the
same 10-year period. An industry growth rate below the GDP growth rate is indicative of a mature industry. Other
trends occurring in the industry, such as consolidation and market saturation, are also representative of an industry
in its mature stage.
Consolidation within this industry has primarily been driven by merger and acquisition activity. For example, major
company Mars Inc. acquired leading chewing gum producer Wrigley in 2008, which represented the single-largest
merger in confectionery history. More recently, The Hershey Company (Hershey's) acquired Brookside Foods in
2011, Ripple Brand Collective LLC in 2016 and Amplify Snack Brands Inc. in early 2018. In the latter half of the
period, Performance Food Group (PFG) acquired Eby-Brown Company LLC (Eby-Brown), a leading US distributor of
candy and other snack products, which increased the company's market share. In 2021, Hershey's acquired Lily's, a
premium plant-based low-sugar chocolate brand, to cater to shifting consumer preferences toward sustainable and
healthier snacking.
Trends toward greater industry consolidation are further accelerated by strong brand awareness. In contrast to most
other food or snack industries, the confections industry as a whole is characterized by a remarkably high level of
brand recognition. Sales of private-label products are very low in this industry in comparison with sales of well-
known, iconic trademarks such as Mars Inc.'s M&M's, Snickers and Skittles brands or the Hershey Company's
Kisses, Reese's and Twizzlers brands. Indeed, the industry is dominated by only a handful of candy and snack
manufacturers, namely Frito-Lay North America Inc., Mars Inc. and the Hershey Co.'s, which together control most
of the industry. Confections also have a very high level of market saturation. Candy and similar treats are
ubiquitously found across almost all retail channels, ranging from supermarkets and grocery stores to gas stations
and movie theaters.
Lastly, clear and stable product lines are further indicative of a mature industry. Although the main product segments
(i.e., potato chips, chocolate and candy) have become considerably more defined over the past few years,
manufacturers continue to experiment with new and exciting flavors, combinations, textures and marketing
concepts. More recently, confectioners have successfully introduced dozens of new chocolate and candy varieties
that contain unorthodox ingredients such as sea salt, chili, acai berry, pomegranate or macadamias, among many
others. Still, these innovations largely revolve around existing product lines and do not create significant industry
disruptions.
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Products & Markets

Supply Chain Key Buying Industries Key Selling Industries
1st Tier 1st Tier
Convenience Stores in the US Candy Production in the US
Vending Machine Operators in the US Chocolate Production in the US
Specialty Food Stores in the US Snack Food Production in the US
Gas Stations with Convenience Stores in the US Cookie, Cracker & Pasta Production in the US
Warehouse Clubs & Supercenters in the US Ice Cream Production in the US
Supermarkets & Grocery Stores in the US 2nd Tier
2nd Tier Syrup & Flavoring Production in the US
Consumers in the US Crop Services in the US
Sugarcane Harvesting in the US
Sugar Processing in the US
Utilities in the US
Products & Services
CHOCOLATE
Chocolate is the Confectionery Wholesaling industry's single largest

product segment, accounting for an estimated 32.1% of industry revenue
in 2021.
Chocolate products range widely in variety, including anything from bars to bags of chocolate sold at convenience
stores, seasonal chocolate products, specialty chocolates and gift boxes, among more. More recently, an increasing
amount of new chocolate items have emerged that cater to more health-conscious consumers, including low calorie
products, CBD-infused chocolate bars and organically sourced and ethically produced options. Generally, chocolate
items are available at low-price points and considered impulse purchases, and thus, have a generally inelastic
demand, albeit, this can vary depending on brand awareness and perceived value by the consumer. Some
chocolate items, namely high-end products or seasonal gift boxes, have a more elastic demand due to their higher
cost. Overall, the diversification in chocolate products sustains this segment's share of revenue despite changes in
broader macroeconomic conditions.
Overall sales of chocolate products are dependent on consumer preferences and tastes. While milk chocolate
remains the most popular variety, changing consumer palates are increasingly favoring the bitter, earthier taste of
dark chocolates that have higher cocoa content and less added sugar. Health trends also increasingly favor dark
chocolate, which naturally contains higher levels of antioxidants and less processed fats than regular milk chocolate.
According to the National Confectioners' Association's Sweet Insights report, retails sales of premium chocolate
have experienced consecutive years of double-digit growth during the period.
NON-CHOCOLATE CANDY
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Nonchocolate candy, including hard and soft candy products, are

expected to account for 17.1% of the industry in 2021.
This segment includes all sugar-based treats that do not have cocoa or chocolate flavoring. Items categorized under
this segment vary considerably, and can have a vast range of different flavors (e.g., sour, tangy or very sweet) and
textures (e.g., hard, chewy, gummy or crunchy). Over the five years to 2021, sales for chewy candies, such as
gummy bears made from gelatin, have grown at a faster rate when compared with sales for other candy types. Non-
chocolate candy items are generally considered to be impulse purchases.
GUMS AND MINTS
Sales of gums, mints and similar breath fresheners are expected to

account for 6.7% of industry revenue in 2021.
In the wake of the COVID-19 (coronavirus) pandemic, sales of gum and mints have faltered amid a gradual return to
pre-pandemic activities. Moreover, according to the National Confectioners Association, the key drivers of gum
consumption, on-the-go purchases and hygiene reasons, were disrupted by the pandemic due to a reduction in in-
person shopping and face-to-face interactions. Thus, this segment has been more adversely affected by the
pandemic than other industry product segments.
OTHER
Other miscellaneous food products carried by confectionery wholesalers

comprise several different categories of confectionary items, including
fruit-flavored concentrates and savory snacks, such as chips, popcorn,
chips and nut mixes, among others.
Altogether, these products are expected to account for 44.1% of industry revenue in 2021.
The savory snacks segment includes a broad range of different snack products, including microwaveable popcorn
and popcorn ingredients (i.e., oil or flavoring), potato chips, corn chips and tortilla chips. The largest manufacturer
and distributor of these products in the United States is Frito-Lay North America Inc., a subsidiary of PepsiCo Inc.
According to retail sales data from IRI, Frito-Lay North America Inc.'s brands accounted for almost 60.0% of all
potato chips sales in 2017 (latest data available). This product segment also includes mixed and roasted nut
products such as peanuts, almonds and sunflower seeds. Ready-to-eat packs of trail mix often sold at convenience
stores are also included in this segment.
Demand Consumer demand for confectionery and snack food drives demand for
Determinants the Confectionery Wholesaling industry.
In turn, several factors are responsible for changes in the consumption of confectionery and snack food, including
the level of consumer disposable income. When consumers have a higher amount of disposable income, they are
more likely to spend more freely on discretionary grocery goods, such as candy and chocolate. However, due to
generally low-price points, candy, chocolates and snacks are somewhat insulated from changes in broader
economic conditions. Higher-margin items, such as specialty and artisanal items or gift boxes, are likely more
susceptible to changes in per capita disposable income, since consumers reduce their propensity to spend on these
discretionary items as income falls.
Seasonal demand
Demand for confectionaries peaks during specific holidays, namely Christmas, Halloween, Easter and Valentine's
Day. In fact, an estimated 91.0% of Americans consume candy and chocolate as a part of holiday celebrations.
Revenue data from the industry's largest companies supports this. For instance, the Hershey Company (Hershey's)
reports that holiday sales drive nearly one-quarter of annual sales. Holiday traditions drive seasonal sales, such as
trick-or-treating at Halloween and premium gifts and parties during the December holiday season. Effectively
managing the supply chain between manufacturers and downstream markets during peak seasonal times is
essential for wholesalers in the industry.
Consumer trends
While shifting consumer preference toward more health-conscious and sustainable items is not expected to
substantially change the amount of industry products demanded from wholesalers, wholesalers that offer these
items could be benefit over wholesalers that do not. Moreover, more consumers are seeking premium chocolates,
which taste better and are often include higher-quality ingredients.
18 IBISWorld.com
More qualitative factors, such as consumer attitudes toward industry products, also affects demand for industry
wholesalers. For instance, although consumer spending experienced a decline in the wake of the COVID-19
(coronavirus) pandemic, sales of some discretionary grocery items, including chocolate, increased when compared
with 2019 sales figures. Packaged Facts, a consumer market research firm, reported chocolate sales increased as
consumers sought solace in special treats and extended holiday celebrations to cope with pandemic measures.
According to the National Confectioner's Association, chocolate and candy sales increased 5.0% between 2019 and
2020, while sales of premium chocolate jumped over 12.0%.
Major Markets
RETAILERS
Retailers comprise the largest and most essential market for

Confectionery Wholesaling industry wholesalers, comprising an
estimated 41.9% of industry revenue in 2021.
Retailers include supermarkets, mass merchandisers, grocery stores, convenience stores and specialty or gift
shops. Supermarkets, grocery stores and mass merchandisers are expected to be the largest broad market for
industry products. Mass merchandisers are retail locations that sell a variety of goods including groceries, clothes
and electronics. Mass merchandisers generally stock a wide range of industry products, including chocolate bars,
nonchocolate confectionery, chewing gum, chips and popcorn. Most of these products are located near checkout
aisles, which increases the likelihood of impulse purchases. Mass merchandisers have grown in popularity over the
five years to 2021 because their large sizes enable them to benefit from economies of scale, which increases their
purchasing power and enables them to offer brand name confectionery products are lower prices than smaller-scale
grocery chains. Additionally, large national grocery chains, such as Kroger, typically have the purchasing power to
purchase confectioneries in bulk directly from the manufacturers, while smaller, regional chains are generally
supplied by grocery distributors such as McLane or C&S Wholesale Grocers. Meanwhile, major snack
manufacturers such as Frito-Lay North America Inc. distribute their products directly to grocery stores and
supermarkets using a direct-store-delivery system. Over the past five years, this market's influence has declined,
albeit slightly, due to comparatively faster growth in other distribution channels such as mass merchandisers and
convenience stores.
Convenience stores (which may or may not be connected to gas stations) generally sell individual serving size
confectionery items, such as candy bars and potato chips. Due to their wide geographic dispersion, convenience
stores satisfy a sizable portion of the daily consumption of confectionery products and account for the majority of
candy or chocolate purchases made on a whim. Manufacturers of confectionary products rely heavily on on-the-go
purchases made at these retail locations, purchased by consumers en route to school, work or while travelling.
Specialty candy stores typically focus on providing premium to middle-end confectionery products that are more
frequently bought for special occasions such as Easter and Christmas. Specialty stores are experiencing rising
competitive pressure from supermarkets and mass merchandisers that offer confectionery products of similar quality
at lower costs. Still, shifting consumer preference toward high quality products, including fine chocolates, is
expected to increase this segment's contribution to industry revenue over the five years to 2026.
WHOLESALERS
In 2021, other wholesalers are expected to represent 39.1% of industry

revenue.
Wholesalers deliver their goods primarily via truck and, as a result, are generally limited to a specific geographic
19 IBISWorld.com
area within the proximity of their distribution facilities. Thus, wholesalers often buy and sell from one another to
access markets outside of their immediate geographical reach. However, a product that passes through several
wholesalers suffers an additional markup, which in turn, increases the price of the final product. Within this industry,
wholesalers rely on large bulk purchases of low-cost items, which enables these sales to occur without significantly
affecting demand for industry products. For instance, industry leader, The McLane Company, is almost entirely
responsible for the distribution of The Hershey Company's products to Walmart Inc. stores nationwide. Moreover,
COVID-19 (coronavirus)-related supply-chain disruptions in 2020 caused some wholesalers to experience difficulty
maintaining appropriate inventory levels. As a result, some wholesalers sourced products from other wholesalers
instead, leading wholesalers to grow as a share of industry revenue in the short-term.
OTHER
All other retail channels account for the remaining 19.0% of industry
revenue.
Within this, export operations are anticipated to account for 10.1% of revenue in 2021. The remaining market is
characterized by a variety of different outlets, ranging from restaurants, dollar stores and street vendors to hotel gift
shops, college bookstores and movie theaters. Dollar stores sell a variety of goods, such as healthcare and personal
care items, candy and stationery. Many drug stores have recently expanded their range of retail goods to better
compete with convenience stores. Furthermore, pharmacies and dollar stores have become a prime location to
purchase seasonal candy items during holidays such as Halloween, Easter and Valentine's Day because of their
convenience relative to larger supermarkets or grocery stores. Since some operators in this market category are
considered nonessential businesses, they have had to close their establishments temporarily to prevent the spread
of the coronavirus, which has caused demand from this segment to slightly decline in 2020 and in 2021.
Exports in this industry are Low and Steady
Imports in this industry are Low and Steady
The Confectionery Wholesaling industry does not participate in international trade. Wholesalers purchase in bulk
from manufacturers, to then resell to a variety of downstream markets. Wholesalers generally do not create
significant added value to industry products. Thus, the value of imports and exports exchanged within this industry is
instead accounted for at the manufacturing level. For more information, see the following IBISWorld reports:
Chocolate Production industry (31135), Snack Food Production industry (31191) and Candy Production industry
(31134).
20 IBISWorld.com
Business
Locations
The distribution of Confectionery Wholesaling industry establishments across the United States generally corresponds to the
population distribution. Wholesaling operations are generally located near population centers, where the industry's key markets,
which include convenience stores and supermarkets, set up shop to benefit from high customer density. Wholesalers are
generally located near suppliers, such as confectionery and snack food producers, to lower transportation costs. Upstream
establishments are frequently located near traditional manufacturing hubs, where access to low-cost rent, affordable labor and
national and international shipping lanes enable manufacturers to keep operating costs low.
The Southeast region (22.6%) accounts for the largest share of establishments and comprises the largest share of the population
as well. This region houses Florida, which holds 6.0% of establishments. The Mid-Atlantic (20.6%) and the West (18.1%) have the
second- and third-highest amount of industry establishments. The presence of California (12.4%) in the West explains this region's
high share of establishments. Moreover, New York accounts for 9.1% of total establishments to serve its large population. New
York City houses many specialty restaurants, gift shops and premium stores that sell or use industry products.
The Great Lakes region makes up an additional 13.4% of establishments. Since this region has access to large ports and is
located effectively in the heartland of continental America, it is a favored sales, distribution and warehousing region for industry
wholesalers.
21 IBISWorld.com
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Competitive Landscape
Market Share
Concentration
Concentration in this industry is High
The Confectionery Wholesaling industry has a high level of concentration. The largest four companies, including the
wholesale distribution offices of major candy and snack manufacturers, are expected to generate 73.1% of total
industry revenue in 2021. Wholesalers with vertically integrated supply chains have significantly higher market
shares than those that do not. The two largest distributors are PepsiCo, operating in the industry under Frito-Lay
North America Inc., and Performance Food Group. Together, the two companies hold 41.5% market share.
Concentration within the industry has also increased as large, corporate retail chains secure longer-term supply
contracts with key confectionery wholesalers. For example, McLane Company Inc. has reinforced its partnership
with major retailers, including Walmart Inc., 7-Eleven Inc. and Family Dollar. Despite increased consolidation activity
in recent years, the majority of industry operators remain privately owned, regional wholesalers that lack a national
presence; and therefore, do not benefit from significant economies of scale nor have any discernable effect on the
market.
Key Success IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
Factors
Proximity to key markets:
Due to the nondurable nature of the industry's products, it is important for wholesalers to quickly and efficiently
freight goods to clients to preserve product freshness.
Having a cost-effective distribution system:

Since the industry is characterized by razor-thin profit margins, successful operators should have efficient
warehouse and distribution systems that minimize operating expenses and maximize operating profit.
Ability to control stock on hand:

This industry is seasonal, with sales peaking around holidays like Halloween or Valentine's Day. Wholesalers should
be able to adjust their stock in line with the time of year, especially in the lead up to holidays when sales are higher
than usual.
Having contacts within key markets:

Wholesalers should secure contracts with a variety of customer groups, including large convenience store chains
and national supermarkets. Strong buyer-supplier relations with large markets ensure a consistent, high volume
revenue stream for operators.
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Cost Structure
Benchmarks
Profit
Operating profit, measured as earnings before interest and taxes, is

expected to account for an estimated 3.2% of total revenue in 2021,
although profit can significantly vary between operators. Over the five
years to 2021, the world prices of sugar and cocoa, among the key
inputs for chocolate and candy production, have remained volatile.
Candy manufacturers generally raise wholesale prices on candy
products when input costs increase, which subsequently increases
purchase costs for industry operators. Even though demand for
premium products has outpaced demand for lower-margin mainstream
and private-label products, industry profit growth has been offset by
volatile input costs.
In 2020, an increase in operating costs related to the COVID-19

(coronavirus) pandemic and reduced demand for many industry
products led to a decline in the average industry profit margin. Although
pandemic conditions have improved in 2021, an expected 5.7%
increase in the price of sugar is expected to hamper profit growth.
Moreover, ongoing supply chain disruptions have led to higher
transportation costs.
Wages
Wages are estimated to account for 5.1% of revenue in 2021,

representing a decline from 5.8% in 2016. While the industry remains
reliant on human labor for sales and distribution duties, automated
processes have replaced some processes to a degree and placed
downward pressure on wages. Over the past five years, wages have
declined at a faster rate than revenue; and thus, wages share of
revenue has declined.
24 IBISWorld.com
Purchases
Purchase costs represent the largest cost component for the industry.
In 2021, purchases are expected to account for a staggering 81.7% of
industry revenue. Industry wholesalers rely on large bulk purchases of
low-cost items and fast turnover to maximize revenue. Although several
industry operators, such as PepsiCo Inc., Mars, Incorporated and The
Hershey Company are vertically integrated manufacturing and
distributing companies, the majority of operators are strictly
redistributors; and therefore, must purchase candy and snacks from
manufacturers for resale. Purchases as a share of revenue have
increased marginally over the past five years, driven primarily by
increases in costs at the manufacturing level.
Marketing
Wholesale distributors generally do not engage in marketing or

promotional activity. Advertising for candy and chocolate products is
managed almost entirely at the manufacturing or consumer level.
Wholesalers rely on supply chain relationships rather than extensive
advertising efforts to gain and retain customers. Therefore, marketing
expenses comprise a minimal 0.2% of industry revenue.
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Depreciation
Depreciation is expected to account for 0.8% of revenue. Wholesalers

rely on integrated computer systems to track productivity, inventory and
shipments. Other depreciable industry assets include buildings, storage
equipment, machinery and vehicles used to transport products.
Rent
Similar to most other grocery wholesaling industries, rent expenses

account for a minimal share of industry revenue. In 2021, rent costs are
expected to comprise 0.5% of industry revenue.
Utilities
Utility costs account for an estimated 0.3% of industry revenue in 2021.

Utility expenses include payments for heating and cooling, water,
internet connectivity and waste management, among more.
26 IBISWorld.com
Other Costs
Other costs attributable to this industry include interest expenses,

research and development, distribution, insurance and administrative
expenses. These costs are expected to account for the remaining 8.3%
of revenue in 2021.
Basis of Competition in this industry is Medium and the trend is Steady

Competition
The Confectionery Wholesaling industry is relatively fragmented,
consisting primarily of a high number of small, privately owned
businesses with a local or regional presence, competing with major
distributors and manufacturers that operate on the national level.
Competition within the industry is based mostly on price, turnaround time, breadth of product variety and selection,
availability of value-added services and reliability of a company's distribution network. Industry operators can gain a
competitive advantage by offering a wider range of confectioneries and snacks from multiple producers, ensuring
quick order fulfillment and extending their distribution networks into new geographic areas. Moving forward,
wholesalers that offer organic offerings and sustainably sourced items will gain a competitive advantage as
consumers become increasingly health- and eco-conscious. Healthier options can include organically sourced
products or low-sugar options, among many more. Heightened focus on sustainability has encouraged more
manufacturers to source fair trade cocoa. The majority of cocoa is produced in West Africa, fair trade practices
ensure farmers are paid appropriate wages and enables sustainable farming practices.
QUALITY
Since confectionery and snacks are discretionary food items, quality is

one of the most important bases of competition.
Consumers tend to be very discerning of confectionery products' quality, especially in terms of its taste, color and
texture. A higher-quality product is a usually a function of superior ingredients and production expertise, which
eventually determines its price. The industry is dominated by well-established brand names such as Mars, Hershey
and Godiva, which are typically perceived as higher quality goods. According to the National Confectionery
Association's custom shopper panel survey, brand was the most important factor for customers when choosing a
candy or chocolate for purchase. Furthermore, private-label chocolate or candy products have historically
represented a very small share of this industry's sales by volume. Therefore, confectionery distributors that offer
products from well-known brands such as Mars Inc. or Frito-Lay North America Inc. typically have a competitive
advantage over distributors that offer products from lesser-known brands.
PRICE
27 IBISWorld.com
The perceived quality of a product or brand determines the price

consumers are willing to pay for it.
The price sensitivity of consumers in the industry varies between product segments. Although the market is
dominated by well-established brand names, which can charge higher prices due to their perceived superior quality,
price-sensitive consumers can easily switch preferences to lower-priced substitutes.
DISTRIBUTION
Developing and maintaining strong relationships with downstream

retailers is critical to a wholesaler's success.
While some wholesalers rely on one customer's purchases as a significant share of revenue, the majority of
wholesalers maintain contracts with numerous downstream users. Strong relationships enable wholesalers to
continue selling to these retailers despite occasional price hikes from producers, which helps maintain profitability for
industry operators. For vertically integrated companies, the ability to secure optimal impulse purchase outlets (such
as checkout aisles) and supermarket shelf space has conventionally set market leaders apart from their competitors.
Brands with the most recognizable products or packaging that are visibly placed at strategic locations have the best
chances of maximizing sales at the retail level.
Further, the choice of distribution channel also provides insight into the potential target market of the product or
manufacturer. For example, some premium producers may choose to stock their products exclusively in gourmet or
specialty chocolate stores and cafes, which can further enhance the image of an expensive or exclusive product.
INNOVATION AND DIFFERENTIATION
Innovation and differentiation apply mainly to the vertically integrated

major companies that both manufacture and distribute industry products.
Although confectioneries are homogeneous in terms of broad product types, operators can develop and market new
products to set themselves apart from the competition. Changing consumer tastes and dietary trends have further
compelled producers to be innovative with marketing and labeling. The rapid rise of sugar-free or low-sugar
confectionery, organic and dark chocolate products that are promoted on their health benefits is one such result of
the changes. Manufacturers are continually experimenting with new flavor combinations (e.g., dark chocolate with
sea salt or chili pepper), textures and more attractive packaging. Merchant wholesalers can also benefit from
product innovation at the manufacturing level by quickly stocking up on new items as they become available.
Barriers to Barriers to Entry in this industry are Low and the trend is Steady
Entry
Although barriers to enter the Confectionary Wholesaling Barriers to Entry Checklist
industry are relatively low, high capital costs related to
attaining specialized distribution facilities could deter Competition Medium
possible entrants. Thus, new entrants entering the
industry are likely to be existing wholesalers of current Concentration High
grocery and related product offerings seeking to diversify.
Other initial investments include transportation are
Life Cycle Stage Mature
vehicles, staff and inventory management software.
More notably, new entrants will compete with incumbent Technology Change Low
distributors with existing supplier contracts, relationships
with downstream markets and expansive transportation Regulation & Policy Light
routes. Since larger industry players benefit from
increases economies of scale, their purchasing power Industry Assistance Low
enables them to purchase large quantities at bulk at low
prices and newer entrants would struggle to compete.
Moreover, larger entrants can more effectively spread
unexpected and fixed costs over a broader revenue base.
Thus, to compete with these larger distributors,
businesses entering the industry need to discount
products and expend large sums on product promotion.
While this is not a technical barrier to entry, it is likely to
hamper the success of new entrants.
Industry Globalization in this industry is Low and the trend is Steady
28 IBISWorld.com
Globalization
The Confectionery Wholesaling industry has a low level of globalization. Although some industry companies operate
as sales branches and confectionery manufacturers, many with large international presences and brand recognition
(e.g., Mondelez International), most industry wholesalers typically operate domestically. A few distributors that
operate at the national level also have operations in Canada, although the bulk of their annual sales are derived
from domestic operations. For example, Core-Mark Holding Company Inc. has more than 30 distribution centers, in
which about five are located in Canada. Nevertheless, the majority of industry operators are local or regional, and
lack resources to distribute their products at the national level.
For more information about the global presence of upstream suppliers and producers, see the following IBISWorld
reports: Chocolate Production industry (31135), Snack Food Production industry (31191) and Candy Production
industry (31134).
29 IBISWorld.com
Major Companies
Market Share Overview
Related Companies
Competitors Company Type Employee Segment Revenue ($m) Market Share (%) Profit ($m)
Frito-Lay North America, Inc. All Star 500+ Employees 11,078.5 20.88 3,201.8
Performance Food Group Co All Star 500+ Employees 10,949.2 20.64 1,399.4
Mars Inc. All Star 500+ Employees 8,973.1 16.92 1,784.0
Hershey Co Disruptor 500+ Employees 7,755.1 14.62 1,809.5
McLane Company Inc. Laggard 500+ Employees 5,690.5 10.73 50.4
Mondelez International, Inc. Rising Star 500+ Employees 3,288.9 6.2 535.3
Core-Mark Holding Company, Inc. Rising Star 500+ Employees 920.0 1.73 104.0
30 IBISWorld.com
Companies with 5.0% industry market share are displayed in the PDF version of this report. You can view insights for all companies associated
with this industry on my.ibisworld.com
Frito-Lay North America, Inc.

Company Overview
Brands & Trading Baked Baken-ets Cheetos Chesters Cracker Jack Doritos El
Isleno Fritos Funyuns Grandmas Lays Maador Maui Style Miss
Names
Vickies Munchies Munchos NatuChips Rold
Gold Ruffles Sabritones Santitas Simply Smartfood Stacys Sun Chips The walking Taco Tostitos
Description Frito-Lay North America, Inc. is a private company with an estimated 55,000 employees. In the US, the company
has a notable market share in at least one industry: Confectionery Wholesaling, where they account for an
estimated 20.9% of total industry revenue and are considered an All Star because they display stronger market
share, profit and revenue growth compared to their peers.
COMPANY TYPE Private Company

TOTAL COMPANY $11.1bn
REVENUE
EMPLOYEES 55,000
Analyst Insights Frito-Lay North America launches new direct-to-consumer shopping service
On December 10, 2020, Frito-Lay announced that it was allowing customers to customize variety packs ordered
online. The new feature will give customers the option to choose what snacks a variety pack can have based on the
products that Frito-Lay is offering instead of the company choosing what's to be in a variety pack. While the option
is now being offered, it's being offered in a limited amount only in the Eastern US, with the intention to expand this
option nationwide by early 2021.
Balance Sheet Labor
Investments in essential infrastructure to reduce water supply

On February 1, 2022, Frito-Lay North America along with its parent company PepsiCo Beverages in North America,
granted $1.2 million to the Texas-based water conservation group Guadalupe-Blanco River Authority (GBRA) to
help protect the water supply in the Guadalupe River Basin. With the recent investment, Frito-Lay North America
plans on, along with its parent company, to become net water positive by the year 2030, meaning the company will
cut back on water use and give back any excess water to areas that are at high risk of water supply.
Balance Sheet ESG Labor
Company to expand operations with 15,000 new job openings in 2021

On October 12, 2021, Frito-Lay North America made new investments within the company that seeks to help
expand the company's operations with increased demand for its products. As part of the announcement, the
company has it hiring 15,000 new employees mainly functioning in its supply chain operations. The announcement
also comes at a time when the company is also creating new manufacturing plants and enhancements with its
supply chain processes such as through its distribution and warehouse operations.
Labor
31 IBISWorld.com
Frito-Lay North America, Inc.

Company Overview
Industry Market Estimated Industry Market Share
Share, Revenue
and Profit 20.88% Strong
Current Year
(2021)
Estimated Industry Revenue
$11.1bn Strong
Current Year
(2021)
Estimated Profit Margin
28.9% Strong
Current Year
(2021)
32 IBISWorld.com

Company Overview
Brands & Trading Cheetos Chester's Doritos Frito-Lay Fritos Lays Munchos Rold Gold
Names
Description Performance Food Group Co is a public company headquartered in Virginia with an estimated 20,000 employees. In
the US, the company has a notable market share in at least two industries: Confectionery Wholesaling and Beef &
Pork Wholesaling. Their largest market share is in the Confectionery Wholesaling industry, where they account for
an estimated 20.6% of total industry revenue and are considered an All Star because they display stronger market
share, profit and revenue growth compared to their peers.
COMPANY TYPE Public Company

REVENUE
EMPLOYEES 20,000
Other Industries Beef & Pork Wholesaling in the US

Grocery Wholesaling in the US
Analyst Insights Performance Food Group Company completes the acquisition of Core-Mark
In September 2021, Performance Food Group Company (PFG) announced that it has completed the acquisition of
Core-Mark Holding Company, Inc (Core-Mark). Core-Mark is one of the largest wholesale distributors to the
convenience retail industry and will help PFG expand within its Vistar segment that includes Core-Mark and Eby-
Brown businesses.
M&A Structural
Performance Food Group Company reports improved sales in first-half fiscal 2022
In February 2022, PFG reported increased sales figures in the first-half fiscal 2022 (year-end June) results.
Headquartered in Richmond, VA, PFG is a subsidiary of Performance Food Group (PFG) and is one of the nation's
largest broadline food service distributors. The increase in sales during the first half of fiscal 2022 can be mainly
attributed to the integration with Core-Mark.
M&A Structural
Performance Food Group Company announces management changes in late 2021

In December 2021, PFG announced that it would appoint Craig Hoskins as President and COO and Patrick Hagerty
as executive vice president and chief commercial officer. This change in management is designed to align with the
company’s reporting structure with its strategy to capture growth opportunities across business units.
Structural
33 IBISWorld.com

Company Overview
Industry Market Market Share
Share, Revenue
and Profit 20.64% Moderate 14.0%
Current Year Annual Growth
(2021) (2017–21)
Industry Revenue
$10.9bn Moderate 34.5%

(2021) (2017–21)
Profit Margin
12.78% Moderate -0.2%

(2021) (2017–21)
34 IBISWorld.com
Mars Inc.
Company Overview
Description Mars Inc. is a private company with an estimated 46,701 employees. In the US, the company has a notable market
share in at least six industries: Pet Food Production, Confectionery Wholesaling, Premium Pet Food Production, Dry
Pet Food Production, Animal Food Production and Veterinary Laboratory Testing Services. Their largest market
share is in the Pet Food Production industry, where they account for an estimated 19.2% of total industry revenue
and are considered an All Star because they display stronger market share, profit and revenue growth compared to
their peers.

REVENUE
EMPLOYEES 46,701
Other Industries Candy Production in the US

Premium Pet Food Production in the US
Dry Pet Food Production
Animal Food Production in the US
Chocolate Production in the US
Veterinary Laboratory Testing Services
Pet Food Production
Analyst Insights Company remained dedicated to protecting the health and safety
The company has been focused on the health and safety of its employees and external communities during the
COVID-19 (coronavirus) pandemic. In fact, the company has taken action to help globally. Specifically, the company
donated $5 million toward providing supplies to women, children and refugees. Additionally, the company donated
$2 million toward helping the United Nations World Food Programme (WFP) deliver the United Nations agency's
critical coronavirus pandemic-related supplies.
COVID ESG Structural
The company is invested in maintaining a diverse workforce

The company promotes diversity throughout its workplace. In that regard, it has considered any input from its
employees and implemented it within its efforts to promote a culture that harnesses the power of differences.
Moreover, the company has incorporated its inclusion and diversity aspirations within its training programs,
processes, practices and policies. Furthermore, the company aims to reach a 100% gender balance among its
employees and increase the racial minority representation within its management team by 40%.
ESG Structural
Mars Inc. is committed to protecting the environment

Mars Inc. incorporates sustainability within its operations in an effort to protect the environment. In that regard, the
company addresses issues including the pandemic, social injustice and climate change. More specifically, the
company uses science-based actions to respond. Therefore, the company has altered the way in which it sources
materials, including cocoa and palm oil and how oceans are fished.
ESG
35 IBISWorld.com
Mars Inc.
Company Overview
Share, Revenue
and Profit 16.92% Moderate
Current Year
(2021)
$9.0bn Moderate
Current Year
(2021)
19.88% Moderate
Current Year
(2021)
36 IBISWorld.com
Hershey Co
Company Overview
Brands & Trading 5th Avenue Almond Joy Bark Thins Breath Savers Brookside Bubble Yum Cadbury Good &
Plenty Heath Hershey's Ice Breakers Jolly Rancher Kisses Kit Kat Milk Duds Mounds Mr.
Names
Goodbar Payday Reese's Rolo Skor Symphony Twizzlers Watchamacallit Whoppers York Zagnut
Zero
Description Hershey Co is a public company headquartered in Pennsylvania with an estimated 17,800 employees. In the US, the
company has a notable market share in at least two industries: Confectionery Wholesaling and Cocoa & Drinking
Chocolate Production. Their largest market share is in the Confectionery Wholesaling industry, where they account
for an estimated 14.6% of total industry revenue and are considered a Disruptor because they display lower to
medium market share that's rising rapidly, but weaker profits compared to some of their peers.
COMPANY TYPE Public Company

REVENUE
EMPLOYEES 17,800
Other Industries Candy Production in the US

Cocoa & Drinking Chocolate Production
Chocolate Production in the US
Analyst Insights The Hershey Company experiences significant competition

The Hershey Company is forced to contend with extensive competitive from other companies that also produce
confectionery products. However, the company has gained significant acceptance from many consumers and one
of the top brands selling in the North American and some global marketplaces. Moreover, the company’s
competitors include numerous global multinational and national firms, in addition to firms that are regional and
local. More specifically, some of these companies have large operations across international regions, as well as
many resources that give them a competitive edge. Overall, competition is formed on the basis of price, brand
loyalty and recognition, convenience, service, marketing and promotional activity effectiveness, product quality,
product innovation and the ability to identify and meet consumer expectations.
Competition ESG M&A
The company has completed numerous divestitures and acquisitions

The company has made various acquisitions and divestitures in recent years. For example, in October 2018, the
company acquired its outstanding shares of public traded company Amplify Snack Brands, Inc. that owns
numerous snack brands, including Oatmega and SkinnyPop. Additionally, in September 2019, ONE Brands, LLC, a
company that sells nutrition bars with low sugar and high protein, was acquired by the Hershey Company. Then,
during the second quarter of 2020, the company divested its Scharffen Berger and Dagoba brand and its KRAVE
Pure Foods, Inc. (“Krave”) division. More recently, the company completed its divesting of Lotte Shanghai Foods
Co., Ltd., which took place in January 2021. This acquisition is expected to help the Hershey Company expand its
product portfolio, which will likely attract more consumers looking to satisfy their snack cravings.
M&A
The company is dedicated to protecting the environment

The company operates its business, keeping sustainability in mind to help protect the environment and overall
planet. For example, the company, by 2030, plans to invest a total of $500 million toward supporting cocoa farmers
and their communities. Additionally, in 2020, the company has begun sourcing 100% of its cocoa from certified and
sustainable sources. Moreover, the company invests in numerous programs to improve the livelihood of farmers
and address various risks related to society and the environment. Specifically, the company has helped with
improving nutrition and education quality for children at schools, supporting young individuals in becoming future
leaders, working to protect forests and spread more agricultural practices that are environmentally responsible.
Furthermore, the company has made significant efforts toward combatting climate change.
ESG M&A
37 IBISWorld.com
Hershey Co
Company Overview
Industry Market Market Share
Share, Revenue
and Profit 14.62% Moderate 2.2%
(2021) (2017–21)
Industry Revenue
$7.8bn Moderate 5.5%

(2021) (2017–21)
Profit Margin
23.33% Moderate 6.4%

(2021) (2017–21)
38 IBISWorld.com
McLane Company Inc.

Company Overview
Description McLane Company Inc. is a private company with an estimated 20,600 employees. In the US, the company has a
notable market share in at least two industries: Confectionery Wholesaling and Cigarette & Tobacco Products
Wholesaling. Their largest market share is in the Confectionery Wholesaling industry, where they account for an
estimated 10.7% of total industry revenue and are considered a Laggard because they display lower market share
alongside slower profit and revenue growth than their peers.

REVENUE
EMPLOYEES 20,600
Other Industries Cigarette & Tobacco Products Wholesaling in the US
Analyst Insights Extending its Partnership With Walmart, McLane Solidifies its Business Moving Forward
In 2017, McLane Company Inc. (McLane) announced that it has renewed its service agreement with Walmart,
continuing its business of delivering products to the majority its retail locations in the United States. Extending its
relationship with Walmart to 25 years, McLane will become the sole provider of candy and tobacco products for
Walmart. The company has praised McLane’s ability to deliver temperature-sensitive products to each of its stores
and to effectively manage seasonal deliveries of goods that are often times shipped in large volumes.
New Activity
McLane Promises New Electric Vehicles to Reduce Waste

In 2020, McLane Company Inc. (McLane) introduced its Orange EV T-Series vehicles which are pure-electric
terminal trucks that are aimed to reduce the company’s environmental impact. Partnering with Orange EV, the
electric vehicles are planned to operate more than 7,500 hours each year and over 10 years, are projected to reduce
emissions that totals an equivalent of 1.3 million pounds of coal. According to Dan James, the Director of
Transportation for McLane, the move comes in reaction to California’s Advanced Clean Trucks (ACT) which intends
for 100% of truck sales to be zero-emission by 2045.
ESG New Activity Product Innovation
McLane Introduces Multiple Products During NACS Show in 2021

During the 2021 National Association of Convenience Stores (NACS) show, McLane Company Inc. (McLane)
introduced new industry solutions for industry partners and customers. The company first introduced JAVAPERKS,
which is a new coffee program that enables retailers to access custom graphics for their coffee bar, countertops
and walls to promote the new coffee offering for patrons. Additionally, McLane revealed a new hot food program
called Central Eats, which delivers a turnkey, fully prepared solution. Coming fully prepared, the items are ready for
sale, giving stores a unique product to sell to customers.
New Activity Product Innovation
39 IBISWorld.com
McLane Company Inc.

Company Overview
Share, Revenue
and Profit 10.73% Moderate
Current Year
(2021)
$5.7bn Moderate
Current Year
(2021)
0.89% Weak
Current Year
(2021)
40 IBISWorld.com
Operating Conditions
Capital The level of capital intensity is Medium

Intensity
Akin to other grocery wholesaling industries, the
Confectionery Wholesaling industry has a low level of
capital intensity due to its continued reliance on labor
inputs. Industry workers' responsibilities primarily include
inventory management, delivery services, customer
service, marketing and sales, among more. While
wholesalers have increasingly implemented new
technological and automated inventory management
solutions to increase productivity by creating efficiencies
and lowering carrying costs, the act of distributing industry
products from upstream manufacturers to the respective
downstream markets remains a labor-intensive process.
Consequently, wages are expected to account for 5.1% of
revenue, while depreciation costs are anticipated to
represent a minimal 0.8% share of revenue in 2021.
Overall, industry operators are anticipated to spend $0.16
on capital investments for every $1.00 spent on wages.
Capital costs are mainly attributable to computerized

inventory management, transportation and computerized
warehouse climate control systems that aim to extend
product shelf life. Despite candy manufacturers introducing
better packaging and preservation technology in recent
years, most chocolate and candy products remain sensitive
to even small variations in humidity or air temperature. To
preserve freshness more effectively, operators are
investing heavily in sophisticated climate control systems
for their warehouses and distribution vehicles. Regardless,
capital intensity is likely to remain low over the five years to
2026.
41 IBISWorld.com
Technology & Potential Disruptive Innovation: Factors Driving Threat of Change

Systems
Level Factor Disruptive Description

Effect
Very Low Rate of Very A ranked measure for the number of patents
Innovation Unlikely assigned to an industry. A faster rate of new
patent additions to the industry increases the
likelihood of a disruptive innovation occurring.
High Innovation Likely A measure for the mix of patent classes

Concentration assigned to the industry. A greater
concentration of patents in one area increases
the likelihood of technological disruption of
incumbent operators.
High Ease of Entry Likely A qualitative measure of barriers to entry.

Fewer barriers to entry increases the
likelihood that new entrants can disrupt
incumbents by putting new technologies to
use.
Very Low Rate of Entry Very Annualized growth in the number of

Unlikely enterprises in the industry, ranked against all
other industries. A greater intensity of
companies entering an industry increases the
pool of potential disruptors.
Medium Market Potential A ranked measure of the largest core market

Concentration for the industry. Concentrated core markets
present a low-end market or new market entry
point for disruptive technologies to capture
market share.
The rate of new patent technologies entering the industry is low, which limits the potential for innovations. A low rate does
not mean that innovations cannot occur, just that the likelihood of some innovation materializing as a threat is lower.
However, the concentration of technologies is high in this industry. This suggests that industry operators have exposure to
potentially unforeseen areas of innovation.
The technological factors supporting the disruptive innovation potential are connected to an industry structure that is
accommodative to new entrants. The relative ease of entry into the industry magnifies the threat of disruption regardless of
other factors as one-off occurrences are more likely to succeed. However, the current rate of new entrants is low,
suggesting that there is a limited number of new companies that are potential innovators within the industry.
The Confectionary Wholesaling industry is not expected to experience

significant technological disruptions, although industry wholesalers could
struggle against a growing number of manufacturers enrolling in a direct-to-
consumer business model, which eliminates wholesalers.
Readily available online platforms have enabled manufacturers to sell directly to downstream markets. By removing the
intermediary, downstream markets benefit from reduced prices and faster delivery times. Thus, online platforms are
expected to disrupt the Confectionary Wholesaling industry as they support the direct-to-customer business model.
The level of technology change is Low
Over the five years to 2021, the Confectionery Wholesaling industry has
experienced a low level of technological change.
Technological innovation has mostly been concentrated on developing efficient, quicker and more automated computerized
inventory management solutions. A fully automated inventory control system can update warehouse inventory in real time,
efficiently determine minimum order quantities and quickly generate online invoices for customers and product order forms
for suppliers. Moreover, computerized systems can organize transaction history into accessible databases, which enables
operators to better assess customers' future needs by analyzing past purchasing behavior. Since the early 2000s,
42 IBISWorld.com
wholesalers have increasingly adopted online ordering and cloud-based delivery systems, which have made wholesale
distribution models more cost-efficient and less prone to human error.
Radio Frequency Identification (RFID) technology is expected to replace bar codes as the primary method of identification
and tracking industry products. RFID technology enables noncontact reading and real-time data collection. RFID
technology also lasts longer in high-traffic conditions where bar codes cannot survive or may deteriorate quickly.
Revenue The level of volatility is Low

Volatility
The Confectionery Wholesaling industry has exhibited a low level of revenue

volatility over the five years to 2021.
Over the past five years, excluding the decline in industry revenue in 2020 following the COVID-19 (coronavirus) pandemic,
declines in revenue ranged between a minimal 0.5% and a more moderate 2.0%. Revenue is expected to increase an
estimated 4.8% in 2021, although the latter figure takes into account the effects of consumer's pent-up demand in the wake
of the pandemic. Overall, while industry revenue has largely declined over the five years to 2021, revenue volatility remains
minimal due to the wide diversification in industry products. Moreover, the low-price point of many industry products
enables a high volume of sales and rapid turnover regardless of changes in the macroeconomic environment.
For instance, industry products include a wide variety of confectionaries, ranging from chocolate bars, chips, gums and
mints, seasonal candy, popcorn and nut mixes, among many others. Industry products are available at a variety of price
points, where lower-priced options are frequently sold at convenience stores and higher-margin items are sold at specialty
retailers. Since many lower-priced options have become staple items, many consumers purchase these regardless of
changes in income or changes in economic conditions, somewhat shielding the industry from volatility. Similarly, the low-
price points of many industry products make them relatively inelastic to changes in price, albeit this is subject to other
factors, including brand names or retailer. Conversely, higher-priced items, including specialty gift boxes or seasonal items,
are likely more elastic and sensitive to changes in consumer income.
Regulation & The level of regulation is Light and the trend is Increasing
Policy
The Confectionery Wholesaling industry does not experience any significant
regulation directly related to the industry, although operators are subject to
broader regulations that affect all grocery and food wholesalers.
For example, all wholesalers must abide by federal or state regulations that restrict anticompetitive practices and promote
fair competition. The most important laws under this category include the Sherman Antitrust Act, Clayton Act and the Hart-
Scott-Rodino Act. Potentially anticompetitive practices or mergers are investigated by several federal agencies, including
the Federal Trade Commission (FTC) and Department of Justice. Individual states also have their own antitrust laws to
ensure consumers are not disadvantaged in relation to prices and competition between players. Antitrust regulation has
played a larger role in this industry in recent years, especially as major wholesalers, including McLane Company Inc. and
Sysco Corporation, have expanded significantly through acquisitions.
43 IBISWorld.com
In addition, manufacturers and distributors of any food product must adhere to a range of food safety and labeling
regulations, most notably the Federal Food, Drug and Cosmetic Act and other laws and guidelines set and enforced by the
Food and Drug Administration (FDA). Operators may also be subject to local regulations that vary between states or
municipalities. Examples of such regulations include health and safety standards, facility licenses and laws related to sales
and trade across state lines.
Although not directly related to the wholesaling industry, rising public scrutiny over the nutritional content of industry
products is likely to increase regulatory pressure on confectionary manufacturers, which, in turn, may negatively affect
industry operators. Over the five years to 2021, there has been more concern over the use of high fructose corn syrup,
hydrogenated palm oils and other processed ingredients or additives in candy products, chocolates, salty snacks and other
confectioneries. This concern has been met with a growing number of consumers reducing their consumption of
confections and stricter oversight by the FDA and other public health agencies. For example, the FDA announced in 2013
that it no longer considered partially hydrogenated oils (i.e. trans fats) to be a safe food additive. Trans fats have historically
been used in many processed snacks, microwaveable popcorn, some boxed chocolates and other confectionaries. The
FDA's new designation will pressure manufacturers to reformulate their products, and the added costs will likely be passed
on to industry operators in the form of higher purchase prices. Consequently, stricter health or nutrition-related regulation is
expected to hurt industry operators indirectly over the five years to 2026.
COVID-19 (CORONAVIRUS)
Since this industry participates in the food industry, industry operators were
considered essential and were not forced to temporarily close establishments
amid coronavirus pandemic-related mandates.
Still, industry operators had to enforce strict measures to keep their employees safe by imposing social distancing
guidelines and mandatory mask wearing, among others.
Industry The level of industry assistance is Low and the trend is Steady
Assistance
There is no specific regulatory protection afforded to the Confectionery
Wholesaling industry.
Since the industry does not participate in international trade, import tariffs are experienced only at the manufacturing level.
However, the industry receives indirect assistance from national, umbrella organizations such as the National Confectioners
Association (NCA). The NCA speaks on behalf of the industry and its consumers before legislative bodies, communicates
information about confectionery products to the public, and provides educational information in relation to sales and
marketing, operations and technical information. The NCA is the largest snack and candy trade organization by
membership, currently representing over 675 confectionery manufacturing and wholesaling companies.
COVID-19 (coronavirus)
In March 2020, the federal government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2.0
trillion stimulus package focused on assisting the economy and helping business and people adversely affected by the
coronavirus pandemic. Within the CARES Act, the Paycheck Protection Program (PPP) provided businesses with fewer
than 500 employees with federally guaranteed funds to cover payroll costs and other eligible expenses.
44 IBISWorld.com
Key Statistics
Industry Data
Per capita
sugar and
Domestic sweetener
2012 53,216 5,567 4,227 3,883 55,610 N/A N/A 3,385 N/A 129
2013 53,340 5,985 4,892 3,668 63,973 N/A N/A 4,011 N/A 128
2014 54,183 5,278 5,921 4,630 49,353 N/A N/A 3,057 N/A 129
2015 54,731 5,277 6,688 5,252 50,744 N/A N/A 2,924 N/A 129
2016 54,485 5,964 6,846 5,300 54,396 N/A N/A 3,130 N/A 128
2017 53,991 4,639 5,670 4,836 45,921 N/A N/A 2,641 N/A 127
2018 52,921 4,463 4,809 4,195 45,196 N/A N/A 2,770 N/A 126
2019 52,073 5,104 4,615 4,050 45,096 N/A N/A 2,708 N/A 126
2020 50,601 4,413 4,578 4,026 44,064 N/A N/A 2,643 N/A 125
2021 53,046 4,822 4,664 4,102 45,096 N/A N/A 2,718 N/A 124
2022 53,637 4,878 4,604 4,049 45,188 N/A N/A 2,729 N/A 123
2023 54,381 4,937 4,495 3,948 45,221 N/A N/A 2,738 N/A 122
2024 55,205 5,010 4,372 3,835 45,165 N/A N/A 2,744 N/A 121
2025 56,062 5,085 4,307 3,772 45,431 N/A N/A 2,765 N/A 120
2026 56,993 5,170 4,296 3,757 45,868 N/A N/A 2,796 N/A 119
Annual Change
Per capita
sugar and
Domestic sweetener
Year (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2012 4.01 8.48 -3.14 -2.66 3.19 N/A N/A -1.70 N/A -0.03
2013 0.23 7.50 15.7 -5.54 15.0 N/A N/A 18.5 N/A -0.89
2014 1.57 -11.8 21.0 26.2 -22.9 N/A N/A -23.8 N/A 0.66
2015 1.01 -0.02 13.0 13.4 2.81 N/A N/A -4.35 N/A -0.01
2016 -0.45 13.0 2.36 0.91 7.19 N/A N/A 7.06 N/A -0.77
2017 -0.91 -22.2 -17.2 -8.76 -15.6 N/A N/A -15.6 N/A -0.63
2018 -1.99 -3.79 -15.2 -13.3 -1.58 N/A N/A 4.87 N/A -0.73
2019 -1.61 14.4 -4.04 -3.46 -0.23 N/A N/A -2.23 N/A -0.37
2020 -2.83 -13.5 -0.81 -0.60 -2.29 N/A N/A -2.40 N/A -0.69
2021 4.83 9.27 1.87 1.88 2.34 N/A N/A 2.84 N/A -0.79
2022 1.11 1.14 -1.29 -1.30 0.20 N/A N/A 0.38 N/A -0.73
2023 1.38 1.22 -2.37 -2.50 0.07 N/A N/A 0.33 N/A -0.76
2024 1.51 1.47 -2.74 -2.87 -0.13 N/A N/A 0.20 N/A -0.76
2025 1.55 1.50 -1.49 -1.65 0.58 N/A N/A 0.78 N/A -0.79
2026 1.66 1.66 -0.26 -0.40 0.96 N/A N/A 1.09 N/A -0.85
Key Ratios
Imports/ Exports/ Revenue per Wages/ Employees per
IVA/Revenue Demand Revenue Employee Revenue estab.
Year (%) (%) (%) ($'000) (%) (Units) Average Wage ($)
2012 10.5 N/A N/A 957 6.36 13.2 60,869
2013 11.2 N/A N/A 834 7.52 13.1 62,700
2014 9.74 N/A N/A 1,098 5.64 8.34 61,933
2015 9.64 N/A N/A 1,079 5.34 7.59 57,619
2016 10.9 N/A N/A 1,002 5.75 7.95 57,547
2017 8.59 N/A N/A 1,176 4.89 8.10 57,510
2018 8.43 N/A N/A 1,171 5.23 9.40 61,282
2019 9.80 N/A N/A 1,155 5.20 9.77 60,054
2020 8.72 N/A N/A 1,148 5.22 9.63 59,988
2021 9.09 N/A N/A 1,176 5.12 9.67 60,280
2022 9.09 N/A N/A 1,187 5.09 9.81 60,390
2023 9.08 N/A N/A 1,203 5.04 10.1 60,549
2024 9.08 N/A N/A 1,222 4.97 10.3 60,746
2025 9.07 N/A N/A 1,234 4.93 10.5 60,864
2026 9.07 N/A N/A 1,243 4.90 10.7 60,947
Figures are inflation adjusted to 2021
45 IBISWorld.com
Industry Financial Statement

Historical Average
Industry Multiples 2017 2018 2019 2020 3-Year 5-Year 10-Year

EBIT/Revenue 4.0 4.2 4.0 3.8 4.0 4.6 4.9
EBITDA/Revenue 6.2 6.7 6.6 6.5 6.6 7.1 7.4
Leverage Ratio 16.0 14.9 15.0 15.4 15.1 14.4 13.7
Industry Tax Structure 2017 2018 2019 2020 3-Year 5-Year 10-Year
Taxes Paid/Revenue 0.6 0.7 0.6 0.5 0.6 0.6 0.6
Income Statement 2017 2018 2019 2020 3-Year 5-Year 10-Year

Total Revenue 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Business receipts 97.6 97.7 97.8 97.9 97.8 97.6 97.5
Cost of goods 79.2 79.3 80.0 80.7 80.0 79.7 79.8
Gross Profit 20.8 20.7 20.0 19.3 20.0 20.3 20.2
Expenses
Salaries and wages 4.7 5.1 5.1 5.1 5.1 4.6 4.2
Advertising 0.3 0.2 0.2 0.2 0.2 0.3 0.3
Depreciation 1.5 1.6 1.6 1.5 1.6 1.5 1.5
Depletion 0.0 0.2 0.3 0.3 0.3 0.2 0.1
Amortization 0.8 0.7 0.8 0.9 0.8 0.8 0.8
Rent paid 1.1 0.9 0.9 0.8 0.9 0.8 0.8
Repairs 0.6 0.5 0.5 0.4 0.5 0.5 0.6
Bad debts 0.1 0.0 0.1 0.1 0.1 0.1 0.1
Employee benefit programs 1.0 1.0 1.0 0.9 1.0 1.0 1.0
Compensation of officers 1.3 1.4 1.3 1.2 1.3 1.2 1.1
Taxes paid 0.6 0.7 0.6 0.5 0.6 0.6 0.6
Interest Income 0.4 0.4 0.4 0.3 0.4 0.4 0.4
Other Income
Royalties 0.1 0.1 0.0 0.0 0.0 0.1 0.1
Rent Income 0.7 0.7 0.7 0.7 0.7 0.7 0.7
Net Income 2.2 2.4 2.4 2.3 2.3 2.8 3.0
Balance Sheet 2017 2018 2019 2020 3-Year 5-Year 10-Year
Assets
Cash and Equivalents 7.0 6.9 6.9 7.1 7.0 7.4 7.3
Notes and accounts receivable 8.2 7.7 7.0 6.1 7.0 8.0 8.5
Allowance for bad debts 0.1 0.0 0.0 0.0 0.0 0.1 0.1
Inventories 4.1 4.1 7.2 9.9 7.1 6.3 6.0
Other current assets 2.2 7.4 7.2 7.0 7.2 5.6 4.7
Other investments 47.2 42.3 41.1 40.3 41.2 39.2 39.1
Property, Plant and Equipment 21.8 26.1 27.0 27.5 26.9 27.0 28.7
Accumulated depreciation 7.8 14.9 16.1 17.3 16.1 13.5 12.2
Intangible assets (Amortizable) 9.9 5.3 4.7 4.2 4.8 7.9 8.8
Accumulated amortization 0.8 0.8 0.7 0.7 0.7 0.8 0.9
Other assets 3.9 10.0 9.4 8.8 9.4 7.7 6.1
Total assets 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Accounts payable 4.5 9.9 10.7 11.3 10.6 8.6 7.1
Liabilities and Net Worth

Mort, notes, and bonds under 1 yr 1.6 3.5 3.4 3.2 3.4 2.7 2.4
Other current liabilities 15.3 6.9 6.4 6.0 6.4 10.8 14.4
Loans from shareholders 0.3 2.3 2.9 3.5 2.9 1.9 1.2
Mort, notes, bonds, 1 yr or more 10.5 11.7 12.6 13.2 12.5 13.0 13.7
Other liabilities 10.6 7.1 5.9 4.7 5.9 9.0 10.6
Total liabilities 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Capital stock 1.1 7.1 7.3 7.5 7.3 4.9 3.3
Additional paid-in capital 19.5 22.2 22.1 22.0 22.1 23.3 24.1
Retained earnings, appropriated 1.1 0.0 0.0 0.0 0.0 0.5 0.6
Retained earnings-unappropriated 32.8 11.5 9.0 7.3 9.3 18.7 24.6
Cost of treasury stock 1.5 0.0 0.0 0.0 0.0 0.8 1.2
Net worth 57.3 58.9 58.5 58.4 58.6 54.1 50.7
46 IBISWorld.com
Liquidity Ratios 2017 2018 2019 2020 3-Year 5-Year 10-Year

Current Ratio 1.0 1.3 1.4 1.5 1.4 1.3 1.2
Quick Ratio 0.8 1.1 1.0 1.0 1.0 1.0 0.9
Sales/Receivables 12.1 13.0 14.2 16.3 14.5 12.9 12.4
Days' Receivables 30.1 28.1 25.7 22.4 25.4 29.3 30.9
Days' Inventory 18.9 18.9 32.8 45.0 32.2 28.7 27.5
Inventory Turnover 19.3 19.3 11.1 8.1 12.9 14.2 14.1
Payables Turnover 17.5 8.0 7.5 7.1 7.5 10.5 12.6
Days' Payables 20.9 45.5 48.8 51.3 48.5 39.2 32.4
Sales/Working Capital 12.3 51.2 27.8 20.6 33.2 24.2 17.6
Coverage Ratios 2017 2018 2019 2020 3-Year 5-Year 10-Year

Interest Coverage 321.3 379.1 374.9 363.5 372.5 379.5 385.3
Debt Service Coverage Ratio 1.0 1.4 0.6 0.7 0.9 0.9 1.0
Leverage Ratios 2017 2018 2019 2020 3-Year 5-Year 10-Year

Fixed Assets/Net Worth 0.7 0.9 0.9 0.9 0.9 1.0 1.1
Debt/Net Worth 1.7 1.7 1.7 1.7 1.7 1.9 2.0
Tangible Net Worth 0.6 0.6 0.6 0.6 0.6 0.5 0.5
Operating Ratios 2017 2018 2019 2020 3-Year 5-Year 10-Year

Return on Net Worth, % 6.9 7.1 6.9 6.6 6.9 9.2 10.4
Return on Assets, % 4.0 4.2 4.0 3.8 4.0 4.6 4.9
Sales/Total Assets 1.0 1.0 1.0 1.0 1.0 1.0 1.0
EBITDA/Revenue 6.2 6.7 6.6 6.5 6.6 7.1 7.4
EBIT/Revenue 4.0 4.2 4.0 3.8 4.0 4.6 4.9
Cash Flow & Debt

Service Ratios (% of 2017 2018 2019 2020 3-Year 5-Year 10-Year
sales)
Cash from Trading 5.6 71.9 35.6 51.6 53.0 34.0 20.0
Cash after Operations -0.1 51.5 11.3 28.6 30.5 18.2 9.4
Net Cash after Operations -1.2 40.6 10.3 27.7 26.2 15.3 7.5
Debt Service P&I Coverage -0.7 42.7 4.3 14.7 20.6 12.1 6.0
Interest Coverage (Operating
0.0 1.8 0.1 2.4 1.4 0.8 0.4
Cash)
Source: IRS SOI Tax Stats; US Census Bureau; IBISWorld
47 IBISWorld.com
Additional Resources
Additional National Confectioners Association
Resources http://www.candyusa.com
The National Association of Wholesaler-Distributors

http://www.naw.org
International Cocoa Organization

http://www.icco.org
The Association for Convenience and Fuel Retailing

http://www.nacsonline.com
Convenience Distribution Association

http://www.cdaweb.net
US Census Bureau
http://www.census.gov
Industry Jargon ANTIOXIDANTS

Molecules which inhibit oxidation of other molecules and thereby suppress the creation of free radicals, which some
have speculated may contribute to the development of cancer and heart disease.
CACAO
Cacao is the raw material extracted from the seeds pods of the theobroma cacao tree, an evergreen plant native to
the tropics. Once cacao is picked, roasted and processed, it becomes cocoa.
COCOA
Raw Cacao is processed into cocoa, which is then used to produce chocolate. Most mainstream chocolate products
are made from Dutch process cocoa, which has a lower acidity than raw cacao.
MANUFACTURERS' SALES BRANCHES AND OFFICES (MSBOS)

A confectionery manufacturer that maintains merchant wholesale operations for its own products.
WHOLESALE BYPASS
A popular trend within retail and manufacturing industries where producers supply goods directly to stores,
eliminating the middleman.
Glossary BARRIERS TO ENTRY

High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for
new companies to enter an industry.
CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than
$0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of
capital for every $1 of labor.
CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e.
year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving
only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using
the US Bureau of Economic Analysis’ implicit GDP price deflator.
DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived
by adding imports to industry revenue, and then subtracting exports.
EMPLOYMENT
The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers
and executives within the industry.
ENTERPRISE
A division that is separately managed and keeps management accounts. Each enterprise consists of one or more
establishments that are under common ownership or control.
48 IBISWorld.com
ESTABLISHMENT
The smallest type of accounting unit within an enterprise, an establishment is a single physical location where
business is conducted or where services or industrial operations are performed. Multiple establishments under
common control make up an enterprise.
EXPORTS
Total value of industry goods and services sold by US companies to customers abroad.
IMPORTS
Total value of industry goods and services brought in from foreign countries to be sold in the United States.
INDUSTRY CONCENTRATION
An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top
players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUE
The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other
operating income from outside the firm (such as commission income, repair and service income, and rent, leasing
and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale
of fixed tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)

The market value of goods and services produced by the industry minus the cost of goods and services used in
production. IVA is also described as the industry's contribution to GDP, or profit plus wages and depreciation.
INTERNATIONAL TRADE
The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For
exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20%. Imports/domestic demand:
low is less than 5%, medium is 5% to 35%, and high is more than 35%.
LIFE CYCLE
All industries go through periods of growth, maturity and decline. IBISWorld determines an industry's life cycle by
considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments;
the amount of change the industry's products are undergoing; the rate of technological change; and the level of
customer acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT
Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self-
employed individuals.
PROFIT
IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as
revenue minus expenses, excluding interest and tax.
REGIONS
West | CA, NV, OR, WA, HI, AK
Great Lakes | OH, IN, IL, WI, MI
Mid-Atlantic | NY, NJ, PA, DE, MD
New England | ME, NH, VT, MA, CT, RI
Plains | MN, IA, MO, KS, NE, SD, ND
Rocky Mountains | CO, UT, WY, ID, MT
Southeast | VA, WV, KY, TN, AR, LA, MS, AL, GA, FL, SC, NC
Southwest | OK, TX, NM, AZ
VOLATILITY
The level of volatility is determined by averaging the absolute change in revenue in each of the past five years.
Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%;
and low volatility is less than ±3%.
WAGES
The gross total wages and salaries of all employees in the industry.
49 IBISWorld.com
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Confectionery Wholesaling in The US Industry Report

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INDUSTRY REPORT 42445

Confectionery Wholesaling in the US

Marley Brocker | December 2021

IBISWorld.com 1-800-330-3772 info@IBISWorld.com

INDUSTRY AT A GLANCE................................ 7 MAJOR COMPANIES...................................... 30

About This Industry

Major Players Frito-Lay North America, Inc.

Performance Food Group Co

McLane Company Inc.

Mondelez International, Inc.

Core-Mark Holding Company, Inc.

Main Activities The primary activities of this industry are:

Chewing gum wholesaling

Potato chips wholesaling

Chocolate candy wholesaling

Freshly made confectionery wholesaling

Corn chips and related corn snacks wholesaling

Fountain fruits and syrups wholesaling

The major products and services in this industry are:

Gum and mints

RELATED INTERNATIONAL INDUSTRIES

$53.0bn 3.1% 2.3%

Annual Growth Annual Growth Annual Growth

$1.7bn Industry Structure

Annual Growth Annual Growth

3.2% MIXED IMPACT

Annual Growth Annual Growth Annual Growth

2016–2021 2021–2026 2016–2026

 Confectionery distributors will likely widen their portfolios

Products & Services Segmentation

Major Players SWOT

Low & Steady Barriers to Entry

High Revenue Growth (2021-2026)

Low Revenue Growth (2005-2021)

Key External Per capita disposable income

Per capita sugar and sweetener consumption

Percentage of business conducted online

Current The Confectionery Wholesaling industry, which distributes candy and

Following the onset of the coronavirus, consumers quickly adjusted

Although specific consumption trends are dependent on factors such as

Historical Performance Data

HEALTH TRENDS AND CHANGING CONSUMER TASTES

A growing emphasis toward health consciousness and sustainable

Performance Outlook Data

The industry is undergoing consolidation

Products & Markets

Convenience Stores in the US Candy Production in the US

Vending Machine Operators in the US Chocolate Production in the US

Specialty Food Stores in the US Snack Food Production in the US

Warehouse Clubs & Supercenters in the US Ice Cream Production in the US

Supermarkets & Grocery Stores in the US 2nd Tier

2nd Tier Syrup & Flavoring Production in the US

Consumers in the US Crop Services in the US

Sugarcane Harvesting in the US

Sugar Processing in the US

Products & Services

Chocolate is the Confectionery Wholesaling industry's single largest

Nonchocolate candy, including hard and soft candy products, are

GUMS AND MINTS

Sales of gums, mints and similar breath fresheners are expected to

Other miscellaneous food products carried by confectionery wholesalers

Retailers comprise the largest and most essential market for

In 2021, other wholesalers are expected to represent 39.1% of industry