Milling & Baking News Corporate Profiles - November 2013 - (Page 56)

Confectionery re-sealable, which it says has gotten an enthusiastic response from the marketplace. Confectionery businesses navigating the changing tastes of American consumers also must grapple with the age-old need to make a profit, which hinges to a large degree on the costs of raw ingredients, which have been at multi-year lows for two key ingredients: sugar and cocoa powder. U.S. refined sugar prices were trading about 45% below year-earlier values and at 5-year lows around 25.5c a lb f.o.b. during July and August 2013 due to historically large supplies in both the United States and Mexico. Sugar was in such heavy supply that the U.S. government held several tenders to exchange sugar for export credits and to resell supply to ethanol producers during the summer of 2013 to reduce supplies in the hope of avoiding forfeitures against government loans for which sugar was held as collateral. Although the government actions made a significant dent in domestic supplies, sugar processors still forfeited several hundred million tons of sugar, the first such forfeitures in about a decade. Sugar users have long held that the U.S. sugar program keeps sugar prices artificially high and has forced confectionery jobs to be "exported" to other countries. Sugar producers, on the other hand, note the free trade of sugar between the United States and Mexico, note confectioners' growing profits and cite subsidized sugar prices in several other competing countries. Since the U.S.D.A. tenders and industry forfeitures, U.S. sugar prices have increased about 10% to 15% from summer lows, but they remain about 20% below year-ago price levels. Most market observers limited potential for higher sugar prices through 2014, a boon to candy manufacturers when other ingredients seem poised to rise further. Corn sweetener prices in 2014 are expected to decline 10% or more from 2013 largely due to a forecast record large U.S. 2013 corn crop, in addition to sugar prices still below year-ago levels in the United States and Mexico. Cocoa prices have been a mixed bag for confectioners. Prices for the basic grade of cocoa powder have plunged about 70% from historic highs in 2011 LEADING LEADING regular gum vendors (NO SUGARLESS) 1 2 3 4 5 6 7 8 9 Wm. Wrigley Jr. Co. Concord Confections, Inc. Mondelez International, Inc. Ford Gum & Machine Co., Inc. Ferrara Candy Co. The Hershey Co. SCM Designs The Topps Co., Inc. Chicles Canel's S.A. de C.V. Private label Total Dollar sales $367,335,400 $54,130,580 $23,547,680 $15,475,360 $14,218,390 $11,313,750 $5,856,121 $3,967,914 $1,842,149 $7,382,563 $519,206,500 and in the fall of 2013 were about 50% below year-earlier levels. Prices for cocoa butter, meanwhile, have soared to historic highs as supplies were tight and demand increased the past several months. Cocoa powder is used primarily in the manufacture of baking mixes, chocolate milk and lower-cost chocolate, while cocoa butter is used to make higher quality chocolate. About 70% of the cocoa beans used in the worldwide manufacture of chocolate come from West Africa, which has endured its share of political upheaval and struggles with volatile weather conditions in recent years. While currently peaceful, West Africa regular gum brands % change from year ago -7.7% -1.8% -13.7% 18.3% -2.5% -1.2% 1,414.9% 9.0% 22.0% 59.8% -5.5% (NO SUGARLESS) 1 2 3 4 5 6 7 8 9 10 Dollar sales Wrigley's Doublemint $111,067,400 Wrigley's Juicy Fruit $56,104,330 Wrigley's Spearmint $39,752,010 Wrigley's Big Red $34,637,220 Wrigley's Winterfresh $32,633,430 Hubba Bubba Bubble Tape $32,574,750 Freedent $30,388,110 Concord Dubble Bubble $28,224,680 America's Original Dubble Bubble $18,402,200 Hubba Bubba Max $16,875,660 Total $519,206,500 % change from year ago -4.4% -6.5% -20.9% -7.0% -22.8% -1.8% -6.7% -5.6% 13.1% -18.5% -5.5% Data for 52 weeks ended Sept. 8, 2013 Total U.S. - Multi-outlet with C-Store (Supermarkets, Drugstores and Mass Market Retailers, Gas/C-Stores, Military Commissaries and Select Club & Dollar Retail Chains) Source: Information Resources, Inc. 56 \ November 2013 Milling & Baking News * Food Business News * Baking & Snack * Meat & Poultry Corporate Profiles

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Milling & Baking News Corporate Profiles - November 2013