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Confectionery NPD ‘lacks quality’; health claims need to be specific – analyst

By Oliver Nieburg , 14-Dec-2011

Mintel analyst James Manely says there is increased scope for functionality in European confectionery. Photo credit: Images_of_Money
Mintel analyst James Manely says there is increased scope for functionality in European confectionery. Photo credit: Images_of_Money

Confectionery sales in Europe dwindle as new product developments (NPD) have not met consumer preferences which demands more definite health claims, according to an analyst at Mintel.

James Manely, European analyst at Mintel, was speaking to ConfectioneryNews.com following the publication of Mintel research which found that while Europe had introduced over a quarter of the world’s new confectionery products, European confectionery sales had remained stagnant over the last four years.

The research found that European based product launches accounted for over a 27% of global launches from January to June this year with 965 new sugar and gum confectionery products launched during this period.

Improve functionality to boost sales

Over two in ten of the new product developments claimed to be “low/no/reduced sugar” with over half of new gum launches carrying such a claim. Manley questioned whether low sugar claims were what European consumer really wanted in light of stagnant confectionery sales.

“The innovation itself lacks quality,” he said.

“Focus still remains on claims like sugar-free, but, as the gum confectionery market has already shown, proven by its stable volume and value, consumers are less interested in sugar-free claims and more interested in specific health claims such as tooth-whitening and breath-freshening.”

“The key to turning this around has to lie in innovation and advertising, both of which are lacking in European markets,” he said.

“This is where European innovation could really drive value and volume sales. Asia has already seen GNPD success by putting beauty claims on sugar confectionery products. There is scope for increased functionality in Europe, especially in Germany, where functional claims lead,” he continued.

Growth forecasts

Mintel’s research found that European sugar and gum confectionery had grown just €2m in the last four years from €3.8bn in 2008 to an estimated 8.6bn in 2011.

Sales growth in some of the largest markets including Germany, France, Spain, Italy and the UK had seen little to no growth in the same period.

“Western Europe, in particular, has suffered stagnant and, in some instances, negative growth of late. The markets are set to suffer still further with the cost of gelatine having risen by 20% and EU food-grade maize up 34% year-on-year,” said Manely.

“Into 2012 these raw material costs will be driven up by growing demand from China. So, although these price hikes may translate to value growth in the immediate future, volume growth and long-term value growth may suffer,” he continued.

Eastern Europe potential

According to Manely the potential in Eastern Europe promises better short-term success for companies.

“Take Turkey for instance, where a younger consumer base, with higher disposable incomes has caused a 31% rise in sugar confectionery. The smallest per-capita consumption (0.43 kg) also offers room for immediate growth, “he said.

However, he warned that long-term growth would be challenged by potential in other markets such as chocolate confectionery, where NPD was strong.

“Although Eastern Europe offers immediate growth opportunities, in the long term it will have to raise the stakes in innovation and advertising; taking up the challenge already being faced in Western Europe,” he said.

See Mintel’s release for more detailed statistics on European product developments in 2011 (here )

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