According to the Confectionery Market Report Plus 2008, released by Key Note Publications, the UK confectionery market dropped in value from £4.41bn (€5.65bn) in 2006 to £4.31bn (€5.52bn) in 2007
It attributes the drop to consumers opting to reduce their consumption of confectionery as well as to mounting competition from other markets offering sweet snacks, such as biscuits, cakes and fruits.
Despite market growth not being achieved in 2007, there have been some significant developments in the sector, such as changes to portion size and companies placing new focus on dark chocolate products and ones free from artificial additives.
The report said investment in existing brands, combined with innovation to target changes in the food market, would fend off a future downward spiral in the value of the confectionery market.
Effect of growing demand for healthy products
The World Health Organisation's (WHO) said in 2005, approximately 1.6bn adults were overweight and 400m were obese. It further predicts that by 2015 approximately 2.3bn adults will be overweight and more than 700m will be obese.
As more and more people actively trying to manage their weight with healthier eating and cutting out fats and sugars, the whole food industry is seizing on the opportunity to meet these changing demands.
According to the report's authors, consumer preference for healthier options prompted a number of brands to move into dark chocolate ranges, and encouraged many companies to widen their product portfolios into that category.
For example, only earlier this month, global confectioner Nestle announced the establishment of a research and development facility dedicated entirely to dark and premium chocolate.
Many brands in the sugar confectionery sector initiated or continued programmes to replace artificial colourings and flavourings with natural alternatives, therefore boosting fruit juice content in many lines.
For example, Nestle Rowntree cut all artificial colourings out of its confectionery range two years ago, and could only this year re-introduce the blue Smartie using an all-natural colouring derived from Spirulina, which is produced from seaweed.
Cadbury also launched a new, healthier-eating brand under The Natural Confectionery Company.
These changes show that reformulation and innovation are important to continuing success amid the growing demand for healthy products.
Portion size and premium
The report also presented the changes to portion size. It said that there were an increasing number of brands to change formats from blocks to countlines, and from bitesize options to big bags for sharing. Mars also introduced a mid-sized range bar with its "A Little Bit of" range.
Another trend the confectionery market has picked up on is the demand for indulgent products.
According to a survey by Barry Callebaut, more than a third of regular chocolate-eaters would relish more choice in the kinds of products available, indicates a new survey by that also shows growing interest in chocolate from beans of different provenance.
As well as Nestle increasing R&D facilities in this area, Green & Black's have invested in targeting this sector.
The report said that, in the sugar confectionery sector of the market, the biggest event of 2007 was the launch of Cadbury's Trident brand into the chewing gum market, which brought in incremental sales of £40m for this sector, according to Cadbury.