Sweet statistical snapshot

Earlier this week Associate Editor Crystal Lindell received an executive summary from Leatherhead Food Research in the UK about innovations in the global confectionery market. 

More often than not, these research reports reaffirm what many of us in the industry already know. Nonetheless, it’s good practice to occasionally walk out from amongst the trees and take a look at the forest with a fresh perspective.

In reviewing the bullet points within the executive summary, I thought I’d share some of those insights with you and entertain some feedback. First, and this comes as no surprise, chocolate accounts for nearly 3/5 (59%) of total confectionery sales, with sugar and chewing gum garnering 30% and 11% of sales, respectively.  Price increases stemming from surging cocoa cost as well as a growing penchant for more premium offerings certainly drove higher dollar totals for chocolate.

When it comes to volume, however, sugar accounts for almost half (48%), with chocolate trailing at 43% and chewing gum at 7%. According to Leatherhead, “growth within the world sugar confectionery market has been sustained by the rising demand for sugar-free sweets.”

It’s important to note that the researchers at Leatherhead used the word sustained versus spurred or invigorated. There’s obviously a trend toward healthier sweets, with sugar portrayed by many groups as less than an ideal ingredient to consume.

The recent attention given to stevia as an all-natural alternative sweetener has certainly prompted many confectionery manufacturers to experiment with this plant-turned-panacea.

Cost, however, particularly in emerging markets, remains a critical component for sugar confections. Consequently, I expect the sugar-free sector will continue to grow, but in a linear line.

Some more tidbits I’d like to share: consolidation and size. As the Leatherhead scribes point out, “The industry has experienced consolidation in recent years, a trend which shows no sign of abating.”

No argument there. Each year in our Global Top 100 survey we see the aftereffects of mergers and acquisitions. Reportedly, there’s another imminent one in the works, i.e.  Farley & Sather’s with Ferrara Pan Candy Co.

It’s all about economies of scale, distribution, branding power and depth and breadth of product portfolio.  I suspect there will be more “tack-on” acquisitions by multinational and regional companies anxious to gain a competitive edge.

Given that the top three confectioners in the world control nearly 44% of worldwide sales — Mars/Wrigley (16%), Kraft/Cadbury (15%) and Nestle (13%) — it’s not surprising that so many companies are seriously considering such a move.

A few other quick points regarding new product development: nostalgia, fruits and nuts, caramel and all-natural. Sounds familiar, doesn’t it? Heck, we’ve covered these topics consistently within Candy Industry during the course of the past 24 months. And yes, expect all of those components to factor in the launch of many more new products.

When it comes to packaging, larger pack sizes designed for sharing and reduced packaging materials aimed at cutting cost and helping the environment, continue to have an impact.

Finally, being local is a good thing, regardless of size. As Leatherhead's authors note, “Most of the market’s other leading suppliers [aside from Mars/Wrigley, Kraft/Cadbury, Nestle, Ferrero, Hershey, Perfetti Van Melle and Haribo] tend to be regional, rather than global, confectionery producers.”

No doubt they’re practicing that age-old strategy which focuses on knowing one’s market and consumers and then fulfilling the needs as necessary. Funny, the more things change, the more certain truisms stay the same.