Healthy Sweets Special Report

The business of sugar

By Anthony Myers contact

- Last updated on GMT

Südzucker said it suffered a slight drop in sales in the first quarter. Pic: Südzucker
Südzucker said it suffered a slight drop in sales in the first quarter. Pic: Südzucker

Related tags: Sugar, sugar alternative

Supplies and demand remains robust in global markets as confectionery rides out coronavirus storm.

The demand for sugar supplies in Europe and other major consuming nations are said to be secure, despite the coronavirus pandemic and it is estimated that the global sugar confectionery market size is anticipated to reach $69.5bn by 2026, growing at a rate of 4.3%, according to latest research published by Polaris Market Research.

Its dive into sugar confectionery revealed that Asia-Pacific is expected to grow at the highest rate during the forecast period (2015-2026). The increasing population in the region, coupled with rising disposable income, will drive the market growth in the region.

The increasing demand of sugar confectionery in the region is expected to be driven by growth in countries such as China, Japan, and India. The development in retail market, stable economic growth, and growing trend of using sugar confectionery as gifts supports the market growth in the region​,” the research found.

German company Südzucker AG is the largest sugar producer in Europe, with an annual production of around 4.8 million tonnes and in the first quarter (2019) it reported its sugar segment's revenues fell slightly to €565m ($513m) from €581m in the previous year.

The revenue decline was driven by a significantly lower sales volume. This is partly due to its reduced sugar production during the 2019 campaign. Furthermore, lower demand from the sugar processing industry as a result of measures to contain the coronavirus pandemic is increasingly overshadowing the positive short-term impetus from panic buying in the retail sector at the beginning of the fiscal year, it said in a statement to the media.

Australia

In the Australian market, confectionery saw sales of AUS$49m ($34m) last year, up 2.1% on 2018. The Australasian Association of Convenience Stores (AACS) said in its State of the Industry Report for 2019, it is the strongest result from the category since 2016

The report also found that in the last five years, only 2017 failed to deliver growth, while the past two years have both seen AUS$10m in value growth. Sugar confectionery is the strongest performer in the category, accounting for 60% of the growth.

Mars Wrigley estimates Australians spend AUS$159m on the Halloween holiday period alone. AACS CEO Jeff Rogut said it remains an important category for convenience throughout the year.

Confectionery remains a highly impulsive category in convenience stores and even in tough retail conditions, performs well as consumers seek out small treats for themselves​,” Rogut told c-store.com.au/​.

A breakdown of results showed chocolate confectionery accounted for 57.3% of the category, sugar confectionery (including gum and mint) made up 38.9% and nutritional bars totalled 3.8%.

Although chocolate bars are the core sellers in the category, sugar confectionery represents a solid percentage of sales. Promotions and innovative products drive sales in the category, as does store placement where products are within arms-reach of the service area​,” Rogut said in the report.

Related topics: Ingredients

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