Confectionery set for strong global growth
way of choice when it came to reconciling their desire for sweets
and chocolate with the need to remain healthy.
But new advances in recent times have seen a plethora of low sugar, low calorie confectionery products flood on to the market, a trend which seems unlikely to slow in the coming year, according to a recent report from market analysts Euromonitor.
Faced with the well-publicised rise in obesity rates, consumers are increasingly looking for alternatives to traditional confectionery products which offer them the sweet 'hit' but without the associated health problems, and manufacturers have been swift to respond to this demand.
Gum in particular has embraced the sugar-free concept, but with improvements in the taste and texture of artificial sweeteners in recent times, there are now increasing opportunities for sugar-free products as diverse as boiled sweets to chocolate, the Euromonitor report suggests.
For example, US confectioner Hershey has launched sugar-free chocolate lines under its Reese's and Hershey's brands, the report said.
In sugar confectionery, the health trend has gone several steps further, with increasing consumer demand for 'natural' ingredients such as fruit juices or added-value additions in the form of vitamins and minerals.
In the already mainly sugar-free gum sector, the move is now towards tooth-whitening products or gums containing cavity-reducing ingredients such as xylitol, and Euromonitor predicts that sales of these products will continue to grow as a broader range of consumers gain greater dental health awareness.
"Increasing the range of functionality offered by gum is expected to continue to widen its appeal," the report said.
Wrigley's recent acquisition of the Spanish Joyco business highlighted the importance of developing markets such as India and China to the world's leading confectionery manufacturers, and the Euromonitor report suggests that China in particular will see significant growth rates in the future.
China has comparatively low confectionery consumption rates, and this, coupled with a vast population, presents multinationals with an outstanding opportunity for growth. Many have already set up factories in China, attracted by low labour costs and the prospect of gaining access to this vast market, the report said.
"The prospects in China were strengthened by the country's admission to the WTO in 2002, and this was followed in July 2002 by new Chinese confectionery regulations which have opened the market to many types of foreign confectionery which had previously been banned," the report continues.
But China will not be the only Asian market driving growth in years to come, with buoyant confectionery growth also expected in Indonesia and the Philippines, Euromonitor said.
Another key driver of growth in the confectionery sector is its growing presence on supermarket shelves. The share of confectionery sales accounted for by supermarkets and convenience stores is growing globally, according to Euromonitor, and this is especially significant in developing markets where the improved storage conditions offered by modern stores has improved the quality of confectionery at the point of sale.
This has particularly boosted sales of chocolate in hot countries - traditionally low volume consumers of chocolate for a number of reasons, not least problems of storage.
In developed markets, however, the increase in supermarket sales has boosted volumes but pegged back growth in value terms, as supermarkets have frequently used confectionery as a major weapon in the ongoing price war. To avoid this, many suppliers are now tapping into the impulse market, as represented by convenience stores, where overall margins are greater, the Euromonitor report concludes.
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