German confectionery reels from ‘tense economic situation' in 2022

By Anthony Myers

- Last updated on GMT

Despite the difficulties, Germany's export of chocolate goods was up in 2022. Pic: ISM
Despite the difficulties, Germany's export of chocolate goods was up in 2022. Pic: ISM

Related tags BDSI Chocolate Confectionery Economy economic crisis

In its review of the past 12 months, The Federal Association of the German Confectionery Industry (BDSI) confirmed it had been a ‘very tense economic situation’ for the industry.

According to BDSI data released this week, more than 200 companies in the German confectionery industry experienced spiralling cost increases and sometimes massive problems and failures in international supply chains that had not been seen since the Second World War.

Although the production volume was above the previous year's level (+2.8%), sales rose by +6.5%, but only partially covered the additional costs incurred by the companies as a result of the war in Ukraine, it said,

"As a medium-sized industry, we demand that the federal government and the European Union take on the major and existential challenges instead of getting lost in the bureaucratic smalltalk.

“We urgently need solutions for a competitive and stable energy supply, an opening to combat the ongoing labour shortage and a functioning infrastructure in the areas of transport and digitization. Instead, companies are burdened with a flood of national and European laws, which are also mostly impractical and extremely bureaucratic. If we continue like this, there is a risk of a market shakeout at the expense of small and medium-sized companies​," said Bastian Fassin, Chairman of the BDSI.

Question of existence

The BDSI said that for companies in the German confectionery industry, the enormous cost burden is increasingly becoming a location decision or even a question of existence. In particular, but not only the sharp rise in energy and raw material costs in 2022, but also location-related burdens, which are already above average in Germany in the long term, have an impact. These include: labour costs, taxes, the duration of approval procedures, the sluggish broadband expansion and bureaucratic burdens.

Despite the relief measures initiated by the federal government, companies have had to cope with significant additional costs for purchased electricity and natural gas. Added to this are the uncertainties in the procurement of raw materials, combined with further massive cost increases in 2022 on the raw material markets, for example for sugar (up to +100%), cocoa (+23%), corn (+19%) or wheat (+9%).

Chocolate goods

According to BDSI, approximately 1.2 million tonnes of chocolate goods were produced in Germany (+1.7% in 2022). The production value rose by around +4.5% to around €6.2 billion. The export of chocolate goods was also up in 2022 in terms of volume (+5.8%) and value (+13.2%).

Fine baked goods

Manufacturers of fine baked goods recorded slight growth in 2022. In terms of quantity, the production of fine baked goods increased by +1.8% based on estimates by the BDSI. A total of around 765,000 tons of fine baked goods were produced. In terms of value, production rose by +7.1% to around €2.4 billion. Exports of fine baked goods also recorded an increase of +4.8% in volume in 2022. The export value increased by +12.8%.

Candies and confectionery

The manufacturers of confectionery recorded a positive development in 2022. The volume production increased compared to 2022 by an estimated 6.0% to 660,000 tonnes, in value by +13.3% to approx. €1.8 billion. The development of exports was also positive in 2022 for sweets and confectionery with an increase of +11.7% in volume and +20.1% in value.

Snack items

Manufacturers of snack items recorded slight declines in 2021. According to BDSI estimates, the production volume fell by -0.1% to around 365,000 tonnes. In terms of value, production increased by +4.1% to around €1.7 billion. On the other hand, exports of snack items developed positively in 2022, increasing by +4.2% in volume and +6.5% in value compared to the previous year.

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