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Confectioners — industry outlook

  • Period: 2026-09-09 to 2026-09-30
  • Events: 3
  • Generated: 2026-09-30T06:30:00.003Z

Growth Targets and 2027 Profitability

Both MDLZ and HSY maintain confidence in delivering long-term organic sales growth and strong earnings expansion by 2027. MDLZ targets 3% to 5% organic sales growth and high single-digit constant currency EPS growth, explicitly linking 2027 performance to supply chain modernization benefits in the U.S. and Europe. Similarly, HSY projects organic sales growth of 2%–4% and strong EPS growth in 2027, driven by cocoa deflation, productivity, and RGM; HSY expects volume trends in North American confection to improve as pricing pressures moderate.

Cocoa Supply Dynamics and Cost Outlook

MDLZ views the cocoa market as currently "oversupplied," noting excess supply from the last couple of years covers previous deficits and that competitors are covered for 10+ months; while "El Niño" is a factor in current pricing, the long-term outlook is stable. HSY anticipates "good visibility" into cocoa deflation in 2027, though it maintains "prudent assumptions" regarding future volatility. MDLZ asserts that all incremental costs related to the Middle East conflict have been absorbed within current guidance, whereas HSY notes that GLP-1 trends and fuel costs remain headwinds expected to carry into 2027.

North American Structural Shifts

MDLZ describes a transition to a sustainable growth model in North America driven by correcting promotional strategy (reduced depth/frequency), accelerating channel growth (value clubs, convenience, away-from-home), and a "full relaunch" of Oreo in 2027 involving packaging, PPA, and quality improvements. HSY expects the "One Hershey" integration to drive year-round growth by shifting focus from seasonal peaks to cultural tentpoles like s'mores and football, while addressing supply constraints for DOTS via new automation in Q3 and capacity in early 2027; HSY also notes an 8-day shorter Easter will create a modest starting point for 2027 confection growth.

Innovation and Premiumization Levers

MDLZ is prioritizing "Better for You" and "munching" occasions with products like Oreo Zero, Oreo Minis, and the Biscoff platform, which is projected to exceed $300 million in revenue this year before expanding to Brazil in the beginning of next year. HSY targets innovation to contribute a high single-digit percentage of revenue over a three-year horizon, with a specific focus on functional nutrition via a VitaKey partnership for sustained-release protein and the scaling of "permissible snacking" brands like Lesser Evil and Skinny Pop. MDLZ plans to modernize "big lines" in the U.S. and Europe for cost efficiency, while HSY has accelerated its time-to-market by 90 days and aims to improve market mix modeling ROI by 8%.

Emerging Markets Penetration

MDLZ identifies Emerging Markets as a primary growth engine, noting they represent ~40% of the business and grew 4.4% volume-led recently, with significant distribution headroom in India (3M of 9-10M stores) and China (3M of 6M stores). HSY is shifting its international strategy to focus on "anchor markets" like the UK and Europe, utilizing Rheo as a growth engine, while optimizing performance in Mexico and maintaining growth in Brazil and Canada.

Competitive Landscape and Pricing

MDLZ reports that pricing is holding up well, private labels have not lowered prices, and branded competitors are behaving rationally despite "somewhat muted" category demand in the U.S. HSY observes that consumers are adapting to financial pressure through higher frequency in dollar stores or larger value packs in mass channels, with confidence that share stabilization will follow as innovation accelerates. MDLZ expects to win share through execution even if category demand remains subdued, while HSY expects its business to grow faster than the category over the last four weeks.