- eToro analysis shows that leading global confectionary stocks returned only 5% over 5 years
- Nestlé performs the worst, with a 22% stock price drop since 2019 causing concerns for investors
- Swiss chocolate creator, Lindt (+30%), as well as Mondelez, which include Milka chocolate in their offerings (+28%), have seen improved performances, with Lindt performing better than Nestle
According to an assessment conducted by trading and investing platform eToro, leading global candy manufacturers are hoping for a profitable Halloween after years of stagnation which caused their performance to fall below the global markets.
eToro created a basket with equal weights for the eight biggest candy companies in the world (based on the sales for 2023). The analysis showed that the value of these companies fell by 4% over the last year, while the main indexes increased by at least 7%. The MSCI World Index grew by 17% in this period [Table 1]. Over a five-year span, candy stocks returned a mere 5%, compared to the MSCI World Index’s 72% return.
Table 1: Confectionery industry results compared to the wider market
| Candy Basket | MSCI World Index | Stoxx 600 | FTSE100 | S&P500 | |
| YTD | -2% | 17% | 8% | 7% | 21% |
| 1 year | -4% | 30% | 15% | 9% | 34% |
| 3 years | 1% | 22% | 15% | 18% | 32% |
| 5 years | 5% | 72% | 36% | 16% | 95% |
Past results do not determine future returns. Numbers are rounded to full percentages.
Commenting on the data, eToro market analyst Paweł Majtkowski said: Confectionery companies are in a tough spot. Rising cocoa and sugar prices have decreased company margins, while supply chain disruptions have increased production costs. Moreover, inflation and increased cost of living have affected consumers’ purchasing power, making it difficult for them to spend money on nonessential items like chocolates and bars.
Comparing confectionery stocks available in our market, Mondelez, the maker of Milka chocolates, is performing well in these trying times. It’s important to note, many of this company’s products are currently produced in Poland. Lindt, whose products belong to our premium segment, had even better results.
Only three out of the analyzed confectionery and chocolate producers achieved positive returns in the last five years. American firms Hershey (22%) and Mondelez (28%) recorded a positive growth in stock prices, as did Lindt (+30%) [Table 2]. On the other hand, food giant Nestle, which boasts a large portfolio of chocolate brands including Smarties and Quality Street, had decreasing performance, losing 22% of its value since 2019, while other companies in the basket showed more marginal losses.
This year has so far been a mixed bag for the industry. Whereas Japanese chocolate producers Meiji Holdings (+10%) and Ezaki Glico (+7%) pleased its shareholders, riding the positive Nikkei sentiments, others such as South Korean Orion (-17%) and American Tootsie Roll (-8%) struggled. Nestlé performed particularly poorly, recording a 14% decrease in this period.
The high price of cocoa presents a challenge, prompting companies to manufacture products with less cocoa. Another significant trend is the consumers’ growing demand for healthier alternatives – more people choose snacks with less sugar, made from more natural ingredients. In response to these needs, companies had to innovate their product lines. Examples include low-calorie versions of Mondelez’s flagship products, although they are not yet available in all markets, including Poland – adds Majtkowski.
Table 2:
| Country | Stocks | Brands | YTD Return | 1-Year Return | 3-Year Return | 5-Year Return |
| Switzerland | Nestlé | Smarties, Aero, Rolo, Kit Kat (outside the US), Lion, Toffo, Milkybar, Quality Street | -14% | -19% | -25% | -22% |
| Switzerland | Lindt | Lindt Excellence, Lindor, Lindt Creation, Lindt Gold Bunny, Lindt Nuxor | 4% | 6% | -2% | 30% |
| USA | Mondelez | Cadbury, Oreo, Milka, Toblerone, Trident, Chips Ahoy!, Sour Patch Kids, Halls | 1% | 3% | 23% | 28% |
| USA | Hershey | Hershey’s, Reese’s, Kit Kat (US), Twizzlers, Jolly Rancher, York, Almond Joy | 3% | -4% | 12% | 22% |
| Japan | Meiji Holdings | Meiji Milk Chocolate, Kinoko no Yama, Takenoko no Sato, Apollo, Chocorooms | 10% | -1% | 3% | -5% |
| Japan | Ezaki Glico | Pocky, Pretz, Giant Pocky, Almond Chocolate, Collon, Caplico, Bisco, Cheeza | 7% | 8% | 8% | -1% |
| South Korea | Orion | Choco Pie, Orion Custard, Market O, Goraebab, Jelly
Turtle Chips, My Gummy |
-17% | -25% | -17% | -4% |
| USA | Tootsie Roll | Tootsie Roll, Tootsie Pops,
Dots, Crows, Junior Mints, Charleston Chew |
-8% | 3% | 6% | -6% |
Source: eToro analysis
Source: https://ceo.com.pl/psikus-a-nie-cukierek-producenci-slodyczy-radza-sobie-gorzej-niz-reszta-rynku-93863
