North America Marshmallow Market Size, Share & COVID-19 Impact Analysis, By Type (Flavored and Unflavored), Nature (Vegan, Organic, Kosher, and Conventional), Distribution Channel (Supermarkets/Hypermarkets, Specialty Stores, Convenience Stores, and Online Retail), and Regional Forecast, 2021 - 2028

The North America marshmallow market size was USD 319.18 million in 2020. The global impact of COVID-19 has been unprecedented and staggering, with marshmallows witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the North America market exhibited a slight growth of 7.49% in 2020 compared to an average year-on-year growth during 2017-2019. The market is projected to grow from USD 341.97 million in 2021 to USD 535.26 million in 2028 at a CAGR of 6.61% in the 2021-2028 period. The gradual fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

These are a widely consumed confectionery item made with sugar, whipped gelatine, and water. The Egyptians first made the candy in early 2000 BC and are currently consumed in almost all parts of the world. In recent years, confectionery items are widely incorporated in various food products, they are predominantly used in making smores and as topping in hot chocolate. American children are highly dependent on candies, which is driving the North America marshmallow market growth. Further, the increasing shift of consumers towards luxurious and premium confections is majorly influencing the manufacturers to innovate the products in the market.

Increased Demand for Seasonal Candies amid COVID-19 to Favor Growth

The COVID-19 pandemic outbreak has caused the closure of various factories and warehouses across the region. During the initial stages of lockdown, the consumers pondered upon panic buying and stockpiling of candies, chocolates as a source of comfort and indulgence in the difficult time. Along with this, the market witnessed a slight uptick in its sales as convenience stores, and grocery stores remained functional to provide consumers with essential items. According to the United States Department of Agriculture (USDA), the pandemic has significantly influenced the consumers’ food buying patterns, resulting in high demand for candies in the market. The retail food sales witnessed a peak surge of 57% spent on food at home during March 2020, compared to the same week in the previous year 2019. Further, the demand for marshmallows remained high as the people were cooped up inside their homes and searched for small occasions to celebrate with families and neighbours.

LATEST TRENDS

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Increasing Consumer Inclination towards Novel & Flavored Candies to Spur Growth

Demand for premium and artisanal confectionery candies has increased significantly in recent years as consumers tend to buy more confectionery items as they have greater variety and novelty items. Consumers these days are increasingly seeking confectionery products for a truly permissible indulgent experience. This has encouraged the manufacturers to fill up the void by incorporating clean-label ingredients to manufacture the classic treat. According to the CEO of Smashmallow, the company is focusing on elevating the familiar mallows by incorporating various unique and fun flavors to deliver a new snacking experience for its consumers. Furthermore, the introduction of innovative flavor variants such as lemon curd, roasted coconut, bloody Mary, and a mojito in the market is anticipated to boost the market growth.

DRIVING FACTORS

Rising Popularity of Confectionery Items to Augment Demand for the Product

The demand for confectionery items in the region is mainly driven by the increasing demand for candies and chocolates, as the products have a strong emotional and traditional bond among consumers.  According to the National Confectioners Association (NCA) report 2020, the non-chocolate candy sales in the U.S. in 2016 was estimated to be USD 7.8 billion, which increased to reach USD 11.5 billion in 2020. The sales of these candies are expected to reach USD 12.2 billion by 2024, owing to the increasing demand for seasonal and miniature packs or single-serve candies in the country. The growth in the sector is also attributed to an increase in demand for various non-chocolate candies such as gummy bears, hard candy, licorice, and others. The altering taste preferences of the consumers has encouraged the inclusion of the product in various dishes such as pie, pudding, pancakes, cakes, and smores other than just being put in hot chocolate. Thus, these factors cumulatively augment the market growth.

Increasing Veganism and Popularity of Plant-based Foods to Contribute to Market growth

In recent years, the consumer’s awareness regarding the benefits of natural, plant-based products has increased significantly. The vegan trend has spread rapidly across the region in the past few years, which has resulted in increasing demand for plant-based products. According to the plant-based food Association, the retail sales of plant-based foods in the U.S. increased by 11% in 2019 compared to the previous year. Marshmallows are generally manufactured using animal-sourced gelatin, eggs, corn syrup, and sugar, making them high in calories and non-vegetarian. However, some manufacturers replaced these ingredients with carrageenan, soy protein, tapioca syrup, and natural vanilla flavors due to the rising vegan trend. This, in turn, has contributed to boosting the market growth.

RESTRAINING FACTORS

High Sugar Consumption Leads to Several Health Ailments Which Hampers the Growth

With the current growing interests of consumers looking out to cut off the amount of sugar intake in daily diet is one of the major factors in hampering the market performance. Consumers are gradually inkling towards healthful foods to support their health and delay the risk of chronic health conditions such as diabetes. According to Fona International, Inc., a flavor manufacturing company, nearly 85% of the consumers in the U.S. are focusing upon sugar reduction by limiting the sugar intake in their diet. The product contains a high amount of sugar and corn syrup, which, when frequently consumed, can increase the health risk. This has led to the increase in demand for sugar-free and low-calorie products in the region. Thereby negatively impacting the regional market growth.

SEGMENTATION

By Type Analysis

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Flavored Variant to Account for the Major Share

On the basis of type, the marshmallow market is segmented into flavored and unflavored. The flavored variant holds a larger share in the market due to the growing inclination of consumers towards new and innovative confections. This has paved several opportunities for the manufacturers to infuse natural and unique flavors in the market. Consumers, especially the millennials, are spending more on experiences. This has pervaded the confectionery sector leading to a spur in demand for multisensory flavors that can capture various tastes, textures, and sensations in one bite. Moreover, various manufacturers are introducing new flavors such as vanilla bourbon, birthday cake, and cinnamon which is expected to further propel market growth.

Unflavored or white marshmallows have a low consumption rate and are mostly consumed in roasted form or consumed with hot chocolate. The wide utilization of its in making smores is expected to contribute to its steady growth.

By Nature Analysis

Conventional Segment to Emerge as the Leading backed by its Wide Availability

The conventional variant currently dominates the market and is expected to retain its dominance in the forecasted years. The wide availability of the conventional variants and its comparatively lower cost are the factors supporting its growth. However, the robust trend for clean labelling encouraged by rational consumers is expected to drive organic marshmallow sales in the forthcoming years. The consumers’ increasing awareness about the detrimental effects of synthetic pesticides supports the market growth.

Similarly, the increasing vegan trend in the region, owing to the consumers’ environmental sustainability and animal welfare concerns, is likely to drive the vegan marshmallows market growth in the regional forecast period.

By Distribution Channel Analysis

Mass Merchandisers to Lead the Retail Sales Channel Owing to its Wide Offerings  

Mass merchandisers or supermarkets/hypermarkets are holding the largest share in terms of distribution channels. These mass merchandisers are capitalizing on providing consumers with a wide range of products. Along with this, their proximity, affordability, and accessibility are other factors drawing consumers’ attention towards them. The presence of a dedicated confectionery aisle displaying various  products, coupled with numerous discount options to entice consumers, has significantly aided in increasing consumer visits.

On the other hand, online retail channels are gaining immense popularity due to the convenience, increased digital literacy, enhanced shopping experience, and doorstep delivery options. According to the National Confectioners Association (NCA) report 2020, the online sales of non-chocolate confections increased from USD 366.9 million in 2017 to reach USD 655.2 in 2019 in the U.S. Thus, these factors are expected to fuel the online retail sales market share in the upcoming years.

REGIONAL INSIGHTS

The U.S. currently holds the major market share in the region and  accounted for USD 261.62 million in 2020. This is because the confectionery industry institutes an important role in the American food consumption trends and the development of food culture across the country. The region is one of the main contributors to driving the global market. The consumers in the country have robustly grown fond of this classic treat as a popular snacking option, an ingredient in hot chocolate, and for making desserts. The consumption of the product in the U.S. has also grown due to the rising inclination of consumers towards easy-to-eat snacks and non-chocolate confectionery products.

Further, numerous prominent players in the market, such as Mondelez International, Inc., Doumak, Inc. Just Born, Inc., and others who account for the major share in the market, contribute to the regional performance of the market. Manufacturers are launching new innovative variants with attractive flavors, further propelling the market growth.

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The sugar and confectionery industry plays an integral part in the Canadian food and beverage industry. According to Agriculture and Agri-Food Canada (AAFC), in 2019, the sugar and confectionery segment accounted for USD 4.0 billion. The country is witnessing a surge in artisanal confectionery demand, and the consumers are inclining towards premium products. This has nudged the manufacturers to incorporate unique flavors to suit the regional palate; thereby, contributing to fuelling the regional market growth.

KEY INDUSTRY PLAYERS

Key Players Embarking Upon New Product Development to Diversify Product Offerings

The market is moderately consolidated with the presence of a few prominent players in the market. Companies such as Mondelez International, Inc., General Mills Inc., Just Born, Inc., and Stuffed Puffs, LLC are extensively focusing on developing new products and expanding their production capabilities to cater to the needs of the consumers. By launching such new products, the companies also aim to diversify their product portfolio and strengthen their regional presence. For instance, in June 2020, General Mills, Inc. partnered with the Swiss Miss brand in order to create magically delicious hot cocoa that includes lucky charm marshmallows manufactured by General Mills. Such strategic partnerships with other prominent companies will aid in expanding their consumer base as well as a distribution network.

LIST OF KEY COMPANIES PROFILED:

• Mondelez International, Inc. (Chicago, United States)


• General Mills, Inc. (Minnesota, United States)


• Doumak, Inc. (Illinois, United States)


• North Mallow (Minnesota, United States)


• Just Born, Inc. (Pennsylvania, United States)


• Chicago Vegan Foods (United States)


• Stuffed Puffs, LLC (Pennsylvania, United States)


• Madyson’s Marshmallow (Washington, United States)


• Hammond’s Candies (Colorado, United States)


• Kitchening & Co. (Vancouver, Canada)

KEY INDUSTRY DEVELOPMENTS:

• April 2020: Stuffed Puffs, LLC launched chocolate-on-chocolate stuffed marshmallows variants in the U.S. to deliver innovative products to its consumers.


• February 2020: Just Born, Inc., under its brand name PEEPS, launched new flavored marshmallow candies in collaboration with Kelloggs in the U.S. These candies are shaped like chicks and bunnies and flavored with Kellogg's fruity loops.

REPORT COVERAGE

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The market report provides qualitative and quantitative insights into the market. It also offers an in-depth analysis of the market size and growth rate for all possible segments in the market. Various key insights presented in the market research report are an overview of related markets, recent industry developments such as mergers & acquisitions, competitive landscape, the regulatory scenario in critical countries, and key industry trends.

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