Against a backdrop of persistent inflation, lingering workforce shifts, and extreme commodity cost volatility – particularly spiked cocoa prices – the confectionery segment is navigating a uniquely challenging operational climate.

Yet, despite broader consumer anxiety and shrinking household savings buffers, candy continues to demonstrate remarkable market stability compared to adjacent food categories.

While overall CPG food and beverage unit sales have stalled, consumer expenditure on confections surged by an impressive $2.5 billion year-over-year, according to Circana. Although much of this top-line revenue expansion is driven by price adjustments rather than sheer volume, with total unit volume down slightly by 2%, candy maintains an astounding 99.8% household penetration rate. American shoppers buy candy more consistently than essential non-food household staples like toilet paper or toothpaste, treating confections as an untouchable daily indulgence.

A shift in consumer behavior is also having an impact. Gen Z shoppers are taking the wheel, prioritizing novel textures, extreme flavor profiles, and viral social experiences over conventional sweet treats. Meanwhile, platforms like TikTok Shop and e-commerce are morphing into high-velocity sales drivers, and seasonal playbooks are expanding well beyond traditional calendar dates. 

I sat with Circana’s Dan Sadler following his presentation at the recent ECRM Candy Session to unpack where the candy category is headed. Below are the 10 most critical takeaways, metrics, and direct insights from his analysis, along with  strategic guidance for brand manufacturers and retail buyers. You can watch our full video interview below, and download the presentation slides here: Circana State of the Candy Industry.pdf

1. Macroeconomic Anxiety vs. Consumer Sentiment: The Cocoa Volatility Paradox

While headline economic indicators appear stable on the surface, underlying consumer stress is directly impacting buying decisions across retail aisles. While the official U.S. unemployment rate floats between 4.0% and 4.2% – which historically compares favorably to a 5.5% baseline – a closer examination reveals significant economic friction. 

More than one million workers have exited the workforce entirely, and the July employment reports estimated that more than 20,000 U.S. jobs went unfilled. Coupled with depleted savings buffers and persistent household debt, consumer sentiment indices dipped near historic lows during the summer months.

In the candy aisle, these pressures collide directly with volatile commodity pricing, particularly cocoa. Spiking cocoa costs have forced double-digit price increases on chocolate items compared to just a few years ago.

"There's a little bit of consumer worry there, says Sadler. “Cocoa prices started the year kind of high, came down a little bit, now they're back up, which obviously impacts what consumers are paying at the shelf for chocolate candy,."

2. The $2.5 Billion Spending Boost: Inflation Drives Dollars While Units Soften

Despite economic headwinds, consumer expenditure in the confectionery market reached unprecedented dollar levels. American shoppers poured over $2.5 billion more into the candy category year-over-year. However, Sadler cautions that this top-line revenue expansion is largely price-driven rather than volume-driven. Total unit volume across the candy aisle declined by approximately 2%.

When evaluated against the broader consumer packaged goods landscape, however, candy continues to show relative strength. Total food and beverage unit sales across retail were flat year-over-year, meaning candy’s dollar performance significantly outpaced general grocery categories.

3. Category Split: Gummy Sustains Growth While Large Chocolate Bars Suffer

Performance across individual confectionery sub-segments reveals clear shifts in how shoppers allocate their snack budgets:

Chocolate Confections

Generated strong dollar growth exceeding 7%, but unit volume contracted by more than 3%. Large-format chocolate bars, multipacks, and boxed chocolates saw the sharpest decline, with unit sales dropping over 7% as consumers downsized their purchases to maintain lower out-of-pocket spending.

Non-Chocolate Confections

Unit volumes remained stable and flat, while total dollar sales ticked upward. Gummy candy maintained its status as the industry darling for the fifth consecutive year, posting a 1% unit growth alongside steady dollar expansion.

Gum & Breath Fresheners

Gum posted steady sales, while breath fresheners achieved flat unit growth compared to prior years—outperforming general packaged foods. Sadler noted an emerging hypothesis linking breath freshener resilience to the rise of GLP-1 weight-loss medications, which often list dry mouth and bad breath as secondary side effects.

"Gummy candy, which has been kind of the darling the last four or five years, is still seeing dollar growth and units are up 1%, so it’s still a growing category,” says Sadler. “We still see a lot of innovation, and a lot of new brands are still hitting the marketplace. One of the softer areas was some of those bigger size chocolate candy bars that come in boxes or packages or just larger sizes where just consumers are choosing maybe to afford; they want to buy chocolate, but they're buying some of the smaller sizes. And that's where we saw some softness within chocolate candy bars where just units were down over 7%."

4. Unrivaled Household Penetration: Why Candy Outperforms Grocery Staples

One of the most striking findings presented from Circana’s research is candy's overall market penetration. Confectionery products maintain an extraordinary 99.8% household penetration rate, making candy the single most penetrated category in the entire retail grocery store.

More American households buy candy on a regular basis than essential non-food staples like toilet paper or toothpaste. Furthermore, loyalty is distributed across a wide variety of choices: the average American household purchases more than 24 distinct candy brands over the course of a year, proving that shoppers actively seek variety and novel brand experiences.

"Almost every single household buys candy in some form – chocolate, non-chocolate, breath fresheners, gum, whatever – and they make a repeat purchase,” says Sadler. 

5. SNAP Waiver Dynamics: Restricted Benefits and Discretionary Resilience

State-level policy changes surrounding Supplemental Nutrition Assistance Program (SNAP) benefits created operational complexities for retailers and brand owners. In recent years, five states implemented SNAP restriction waivers that specifically excluded candy and carbonated soft drinks from eligible purchase lists.

While overall food spending among SNAP recipients contracted due to reduced benefit allocations, candy purchases demonstrated surprising resilience in affected regions. Even when restricted from using EBT funds for confections, consumers routinely opted to utilize cash and personal discretionary income to keep candy in their baskets. Furthermore, recent regulatory updates indicate that many of these state-level waivers are now being reversed or redacted, restoring standard eligibility.

"When we look at SNAP, and consumers who use that SNAP card, certainly we're seeing purchases overall down across food and beverage and candy,” says Sadler. “But in those states where they actually have those waivers specifically for candy, dollars are still up a little bit. So yeah, they might not be able to buy candy on SNAP, but they're going to use some of that discretionary fund to still purchase confections."

6. The Digital Disruption: TikTok Shop and E-Commerce as Growth Engines

Digital sales channels are transforming confectionery distribution, moving from secondary discovery outlets to primary revenue drivers. E-commerce currently accounts for approximately 9% of total candy market sales, yet it generates 28% of total category growth—delivering three times the growth output relative to its overall market share.

Social commerce, led by TikTok Shop, has emerged as a major sales engine. Within TikTok Shop’s broader food and snack category, non-chocolate candy ranks as the #1 overall selling sub-category. The platform enables direct video demonstrations, instant user reviews, and friction-free, one-click checkout experiences that appeal directly to younger demographics.

"TikTok Shop is now really becoming a retail channel in itself,” says Sadler. “Among snacks within TikTok Shop, the number one category in that snacking universe is non-chocolate candy. E-com is definitely growing, and is basically a 9% share of all candy sales, but driving 28% of the growth, so three times the growth for its share."

7. Experiential Eating: Swicy, Freeze-Dried, Swedish and Peelable Candy

Modern candy consumers – particularly Gen Z – view confection consumption through the lens of sensory experience, texture and viral novelty. Standard flavor profiles are increasingly supplemented by interactive and multi-sensory attributes:

• Swicy & Extreme Flavor Notes: Sweet and spicy combinations ("swicy"), sour profiles, and pickle-flavored candy varieties continue to command attention on social feeds and retail shelves.

• Textural Innovations: Cotton candy formulations that represent novel textural crossovers.

• Freeze-Dried Candy: Freeze-dried processing offers a crunchy, intensified flavor structure that transforms standard brands like Skittles into top-performing market additions.

• Peelable Confections & Swedish Imports: Peelable candies – where consumers peel back an outer gummy layer to reveal a secondary sweet center – alongside Swedish candy imports like Bubs (featuring distinct sour notes and foamy textures) continue to drive high viral engagement.

"For Gen Zers who are really engaged with confections, certainly it is all about flavor and texture, but the experience seems to be one of the key drivers,” says Sadler. “We've even seen a resurgence of cotton candy. I think one of the things we saw at the ECRM Session was a company that had cotton candy that turns into chewing gum."

8. Health & Wellness Claims: Low Sugar Takes the Lead While GLP-1 Misconceptions Persist

Despite candy being an inherently indulgent category, health and wellness claims play a major role in product positioning and front-of-pack communication. Across every sub-category in candy, No Sugar / Low Sugar stands out as the single fastest-growing claim. Additional claims demonstrating momentum include Vegan certifications, Gluten-Free labels, and formulations utilizing natural non-artificial sweeteners.

Regarding the broader impact of GLP-1 weight-loss medications (such as Ozempic and Wegovy), Sadler notes that widespread industry fears regarding a collapse in candy consumption have not materialized. Because candy is overwhelmingly purchased for multi-member households and family sharing, household purchasing habits remain steady even if an individual resident reduces their personal caloric intake.

"Consumers are looking to balance,” says Sadler. “They want to enjoy a treat, want to treat themselves, but they also want something that's at least fairly good for them. And that's one of the trends we saw when we looked at some of the different health and wellness claims on products, no/low sugar across every single category within candy was the number one claim for us. At the end of the day, you might have someone on GLP-1, but you still have other consumers in the household who are still going to treat themselves or are still going to buy candy."

9. The Gen Z Disruption & The New Commercialization Playbook

Demographic data reveals that Gen Z represents the core growth engine for the confectionery market. Dollar sales driven by Gen Z shoppers expanded by 14% in chocolate and over 9% in non-chocolate, far outpacing older demographic segments.

This generational shift has rewritten the traditional CPG commercialization playbook:

• The Traditional Innovation Model: Secure physical retail shelf distribution first. Then deploy trade support and traditional media. Finally, slowly build consumer awareness over 12–18 months.

• The Modern Digital Playbook: Launch product via creator content on social media/TikTok Shop, generate immediate consumer reviews and sales momentum, then  scale digital distribution. Finally, transition into physical brick-and-mortar retail shelves with proven velocity data.

This updated model lowers barriers to entry for emerging brands. Through affiliate sample programs, emerging companies can seed products with hundreds of digital creators, testing product-market fit with minimal upfront capital risk.

"The traditional model was to get your product out to retail, gain that distribution, support it with some marketing,” says Sadler. "Now with e-commerce and social commerce, that's changed. You can have a creator post content and consumers, while scrolling, can see the product and buy it on the spot, and then you get instant feedback."

10. Seasonal Strategy Evolution: ‘Summerween’ Surge and the 2027 Super Bowl Collision

Seasonal purchasing windows represent a huge portion of annual confectionery revenue. However, traditional holiday boundaries are blurring as brands seek earlier consumer engagement:

The "Summerween" Effect

To counter historical trends where Halloween purchases were backloaded into late October, manufacturers and retailers introduced "Summerween" activations during late summer. Comparing 2025 data to 2022, Halloween candy sales during the month of August soared by 77%. Non-chocolate candy captured significant market share during Halloween due to its approximately 30% price value advantage over cocoa-inflated chocolate products. Conversely, Christmas remains heavily chocolate-dominant, accounting for 70% of total holiday sales driven primarily by premium gifting occasions.

The 2027 Super Bowl & Valentine's Day Collision

Next year features a rare calendar event: on February 14, 2027, Super Bowl Sunday and Valentine's Day will occur on the exact same day. Consumer surveys conducted by Circana and the National Confectioners Association (NCA) reveal that 70% of consumers plan to celebrate both events simultaneously and prefer a unified shopping trip.

Because Valentine's Day falls on a weekend, traditional heart-box sales often face competition from dining out. However, combining both occasions presents a unique merchandising opportunity. Retailers can utilize seasonal candy aisles – which are typically dedicated entirely to Valentine's Day – to cross-merchandise Super Bowl snacking items (such as novelty football chocolates, confection trophy cups, and ring-shaped candy).

Strategic Recommendations for Retailers and Brand Manufacturers

To capitalize on these evolving trends over the coming year, Sadler outlined key strategic priorities for industry stakeholders:

• Leverage Unmatched Brand Equity: Capitalize on candy’s 99.8% household penetration by ensuring strong core brand availability and eye-catching secondary displays to trigger impulse purchases.

• Optimize Digital Commerce: Treat TikTok Shop and e-commerce platforms as primary launchpads for novel flavor and texture innovations rather than secondary clearinghouses.

• Activate Early Seasonal Merchandising: Expand seasonal sales windows by engaging consumers early during precursor months like June (National Candy Month) and August ("Summerween").

• Prepare for Integrated Event Merchandising: Build dual-themed display strategies for early 2027 to capture unified shopping trips for the overlapping Valentine's Day and Super Bowl weekend.

By aligning product portfolios with Gen Z preferences, leveraging social commerce pathways, and rethinking traditional seasonal calendars, confectionery brands and retail partners can continue to turn consumer indulgence into sustainable category growth.