Confectionery market moves increasingly towards healthier options acquisitions

Hershey’s freshly announced move to acquire reduced sugar confectionery brand Lily’s (above) has put down an intriguing marker for where the sector is heading for the remainder of this year.

It’s far from being the biggest deal in town in recent months within the sector that has pointed for a huge growth in the so-called ‘better for you’ and healthier options segments that have shown a key rise amid the coronavirus pandemic.

Just the other week, we saw Nestlé spend a huge sum of $5.75 billion on Bountiful Company’s core brands of nutrition based products including snacks series that also signalled just where many major manufacturers priorities now appearing to be focused upon, as the world seeks to recover from the pandemic.

Another major business, Mondelez, recently acquiring the Hu Products, valued at $340 million, also within the healthier snacking category, further illustrating a key direction of travel for the industry.

Clearly, consumers have become increasingly health conscious during the past year of lockdowns, yet slightly counter to this trend, there has also been a parallel major rise in chocolate and snacks purchases around the globe, as shoppers turn to familiar nostalgic brands amid challenging times.

However, as some observers have noted, with a few highly visible exceptions, reduced sugar options in particular remain thin on the ground, with manufacturers reportedly reluctant to promote them overly against conventional ‘full sugar’ bars that they are in direct competition with.

Whether the overall trend for healthier products looks set to continue remains to be seen, as while there appears to be significant movement in terms of acquisitions and mergers within the global market, there has, according to recent research from Mintel, been a notable slowdown in product innovation (at least as far as chocolate confectionery is concerned).

So, it will indeed be interesting to see how the results for 2021 eventually turn out as we move through the year, as to whether it will be one recorded as a period of genuine recovery, or one of consolidation as the industry looks to regain lost momentum experienced through the peak of the pandemic.

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