High demand for clean label low sugar confectionery in Germany, says trade body

By Oliver Nieburg

- Last updated on GMT

Related tags: Confectionery, European union, Germany

High demand for clean label low sugar confectionery in Germany, says trade body
German consumers are turning health conscious and are looking to confectionery that is low sugar, fair trade and organic, according to investment group Germany Trade & Invest (GTAI).

Daniel Lindel, food and beverage industry analyst at GTAI told ConfectioneryNews.com​ that since the EU had approved natural sweetener Stevia, opportunities could open up for manufacturers in confectionery, low-calorie soft drinks and snacks, particularly in economically stable regions.

His comments came in a follow-up interview after the publication of GTAI’s report on The Food & Beverage Industry in Germany, Issue 2011/2012 in July.

“Since the release of our report, industry trends have generally continued on the same track,”​ he said.

“This segment [confectionery] is of course sensitive to macroeconomic shifts, such as the current Euro turbulence. The result so far has been to shift capital within the Euro area to the most stable countries in the EU, especially Germany.”

Healthier clean label products

Lindel added that confectioners could appeal to the German consumer by delivering healthier clean label products.

“Low sugar, fair trade and organic and thereby sustainable products are on the rise. A key example is cocoa, for which fair trade sales are up 25%,”​ he said.

“Here there is significant potential for products such as gum, hard candy, or chocolate bars, to name a few examples,” ​he continued.

“So-called ‘clean label’ products are also doing well. This includes products with no artificial ingredients, such as genetically modified organisms, colours and sweeteners.”

He added that smaller packaging had also proved successful and saw opportunities for confectioners to stand out with innovative packaging.

According to figures by Datamonitor, total 2011 sales for confectionery in Germany are forecast at €9.08bn, which will be around the same as 2010 sales.

By 2014, Datamonitor forecasts growth of just under 1% from 2011 taking total sales to €9.17bn.

The German market features some of the world’s biggest players including Ferrero, Kraft, Mars, Haribo, Lambertz, and Lindt.

Challenges

Asked what the biggest challenge was for confectioners in the German market, Lindel said: “The continuous raw material price increases for cocoa, nuts, powdered milk, and sugar are increasing the price of production for confectionaries everywhere, not just in Germany.”

He said that not all price increases would be passed on to the consumer, meaning the majority of consumers will tend to select established brands.

“Although Germany has not felt the effects of the Euro crisis – unemployment is at record lows, for example, and incomes are rising – its continuation could increase demand for goods in the higher price segments, rather than discount goods,” ​he said.

He added that an elimination of EU sugar quotas would have positive effects for the German confectionery industry.

Related topics: Candy, Commodities

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