- eToro analysis shows world’s leading confectionery stocks have returned just 5% over 5 years
- Nestle has been the worst performer, spooking investors with 22% share price slump since 2019
- Cadbury owner Mondelez (+28%), Hershey (+22%) and Switzerland’s Lindt (+30%) have dragged up performance
The world’s leading confectionery companies will be hoping for a much-needed Halloween treat this month after suffering years of stagnant growth which has seen them massively underperform global markets, according to analysis from trading and investing platform eToro
eToro created an equal-weighted basket of eight of the largest confectionery stocks in the world (based on 2023 sales). The analysis shows that the value of these companies has dropped 4% over the past year, while major indices are up at least 9%, with the MSCI World Index up 30% over this period (see Table 1). Over five years, the picture is scarier, with the confectionary basket returning just 5% versus the MSCI World Index’s 72%.
Table 1: Performance of confectionery industry versus wider market
| Confectionery basket | MSCI World Index | Stoxx 600 | FTSE100 | S&P500 | |
| YTD | -2% | 17% | 8% | 7% | 21% |
| 1Y | -4% | 30% | 15% | 9% | 34% |
| 3Y | 1% | 22% | 15% | 18% | 32% |
| 5Y | 5% | 72% | 36% | 16% | 95% |
Past performance is not an indication of future results. Figures rounded to nearest whole percentages
Commenting on the data, eToro market analyst Sam North said: “Confectionery stocks are facing a challenging period. Rising cocoa and sugar prices have squeezed profit margins, whilst supply chain disruptions have led to increased production and distribution expenses. Inflation and increasing cost of living have also affected consumer spending power, making it harder for people to spend money on non-essential items such as chocolates and snack bars.
“Market saturation has also made it difficult for companies to sustain growth and profitability. With numerous brands vying for consumer attention, even innovative products struggle to gain a foothold, resulting in price wars that further squeeze margins.”.
Just three of the sweet and chocolate manufacturers analysed made positive returns over the past five years, with US firms Hershey (22%) and Mondelez (28%) both seeing positive share price growth, along with Lindt (+30%) (see Table 2). Food giant Nestle on the other hand – which boasts a large portfolio of chocolate brands including Smarties and Quality Street – has dragged on performance, losing 22% of its value since 2019, whilst others in the basket have seen more marginal losses.
So far this year, it’s been a mixed bag for this industry. Whilst Japanese chocolate makers Meiji Holdings (+10%) and Ezaki Glico (+7%) have treated their shareholders, riding the wave of positive Nikkei sentiment, others such as South Korea’s Orion (-17%) and American firm Tootsie Roll (-8%) have struggled, with Nestle faring particularly badly (-14%) over this period.
“The shift towards a healthier lifestyle is another pressing concern for this industry. As more people opt for snacks with lower sugar content and natural ingredients, companies have had to innovate their product lines. Some examples include the low-calorie versions of Mondelez’s flagship products, the organic and non-GMO product line launched by Hershey, and the high-protein, whole grain, and fortified snacks developed by Nestle,” adds North.
| Country | Stock | Brands | Returns YTD | Returns 1 year | Returns 3 years | Returns 5 years |
| US | Mondelez | Cadbury, Oreo, Milka, Toblerone, Trident, Chips Ahoy!, Sour Patch Kids, Halls | 1% | 3% | 23% | 28% |
| US | Hershey | Hershey’s, Reese’s, Kit Kat (US), Twizzlers, Jolly Rancher, York, Almond Joy | 3% | -4% | 12% | 22% |
| Switzerland | Nestle | 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% |
| 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 Korean | Orion | Choco Pie, Orion Custard, Market O, Goraebab, Jelly
Turtle Chips, My Gummy |
-17% | -25% | -17% | -4% |
| US | Tootsie Roll | Tootsie Roll, Tootsie Pops,
Dots, Crows, Junior Mints, Charleston Chew |
-8% | 3% | 6% | -6% |
Halloween on the financial markets. What have been the tricks or treats of 2023?
