KANSAS CITY — The marketplace has an appetite for healthier chocolate and candy, a trend underscored by strategic transactions and new product launches announced during the year.

The Hershey Co. in June paid $425 million to acquire Lily’s, a brand of low-sugar chocolate products. Lily’s markets an assortment of chocolate bars, baking chips and other confections such as peanut butter cups and coated nuts and popcorn sweetened with stevia.

The addition to Hershey’s portfolio builds on the company’s multi-pronged approach to offer better-for-you snacks and confections. In February, the company shared plans to expand its portfolio to deliver more reduced-sugar, organic and plant-based alternatives.

“Our sugar-free platform has been performing well, and we believe this will enable us to reach more households and provide consumers with more great tasting ways to enjoy their favorite Hershey brands,” said Michele G. Buck, chairman, president and chief executive officer of The Hershey Co. “And while the organic chocolate market is small, it is growing rapidly, and we are excited to bring consumers great tasting organic versions of Reese’s and Hershey’s through this targeted launch.”

Mondelez International, Inc. earlier in the year purchased Hu Products, a maker of organic chocolate formulated with coconut sugar. Financial terms of the transaction were not disclosed. Glen Walter, executive vice president and president of Mondelez International North America, said the deal “provides further growth opportunities in chocolate.”

American Licorice Co., maker of the Red Vines and Sour Punch brands, acquired Torie & Howard, which offers a range of vegan candies made with organic ingredients.

Undercover Snacks, which produces crispy quinoa clusters lightly coated in chocolate, raised $13.7 million of equity for a minority stake in the company led by Octagon Capital Holdings, 900 Chocolate Investors and the company’s founders. The company planned to use the funds for marketing, retail expansion and increased production capacity.

Gatsby chocolate bars

New product trends

Meanwhile, category innovation coming to market during the year centered on reducing calories and sugar or eliminating ingredients viewed unfavorably.

Russell Stover Chocolates launched Joy Bites, a collection of no-sugar-added chocolate bars. Crafted with fair trade cocoa and sweetened with stevia extract, the chocolate bars are made without artificial flavors, preservatives or added colors. They feature breakable bites and are available in five filled and solid varieties, including caramel in chocolate, peanut butter in chocolate, smooth creamy chocolate, sea salt caramel in dark chocolate, and roasted almonds in dark chocolate.

Perfetti Van Melle North America introduced Fruit-tella, a line of better-for-you soft gummies made with fruit puree. The company positioned the line as clean label, noting that the products are not formulated with high-fructose corn syrup or gelatin.

Nestle launched a vegan version of its KitKat bar in test markets throughout Europe. KitKat V was developed by chocolate experts at Nestle’s confectionery research and development center in York, UK. The certified vegan product took about two years to develop.

“There is a quiet food revolution underway that is changing how people eat,” said Alexander von Maillot, head of confectionery at Nestle. “We want to be at the forefront of that, championing the discovery of plant-based food and beverages. What better way to do that than offering a vegan version of one of our most famous and much-loved brands?”

SkinnyDipped, a maker of coated almonds, peanuts and cashews, debuted chocolate bars and peanut butter cups featuring a blend of maple sugar, cane sugar and allulose. The confections contain up to 79% less sugar than leading brands and are made without stevia or sugar alcohols, according to the company.

The team behind Halo Top ice cream unveiled Gatsby, a chocolate brand with fewer calories and less sugar than traditional chocolate. Available in milk chocolate and almond dark chocolate varieties, Gatsby products are formulated with allulose and esterified propoxylated glycerol, a modified plant-based oil that tastes and functions like fat with fewer calories. Other ingredients include medium-chain triglycerides, milk, sugar and cocoa.

New products at Sweets & Snacks

Flavor innovation

More than 450 exhibitors showcased innovation at the 2021 Sweets & Snacks Expo, which was held June 23-25 in Indianapolis. The National Confectioners Association identified four trends at the show.

Smaller pack sizes containing 200 calories or fewer were prevalent, pointing to consumer demand for smaller portion sizes for more mindful snacking.

Tropical flavors flourished in new product launches, with pineapple and coconut taking center stage.

Mix-and-match offerings give consumers the best of both worlds, allowing a combination of sweet, salty, fruity or tart flavor profiles.

Fiery flavors like chili, sriracha, jalapeño and habanero heated up the show floor, showing up in spicy mango candies, jelly beans and more.

“The Sweets & Snacks Expo is where the top candy and snack companies showcase their newest products, and this year is even more important as we get back to business,” said John Downs, president and chief executive officer of the National Confectioners Association. “While consumer purchasing habits may have shifted to meet the new environment, manufacturers are exceeding expectations with new products, flavors and innovations.”