Confectionery:
The Global Market Perspective
Euromonitor International
Brian Morgan, Senior Research Analyst
Outline
Key Market Figures
A brief introduction to market sizes and shares during the 1998-2007 period.
Global Market Trends
Trends highlights grouped by theme: Health, Organic, Premiumisation, Segmentation and
Innovation.
Market Prospects
A brief introduction to market performance forecasted by Euromonitor during the 2007-2012 period.
Market Opportunities
A glimpse into ‘hot opportunities’ identified by Euromonitor in the Confectionery market.
Forecasts and a Word of Advice
Euromonitor advises on strategies to be undertaken in order to maximise growth potential.
Global Value - Confectionery
160,000
140,000
Value US$ millions
120,000
100,000
80,000
60,000
40,000
20,000
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Global retail sales of confectionery totalled US$20 billion in 2007.
Up 4% on 2006
Confectionery retail volume sales – Growth by region
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Western
Europe
Eastern
Europe
North
America
Latin
America
1998-07 CAGR %
Asia Pacific
Australasia
Africa and
Middle East
2006/07 (%) Growth
•
Economic growth drives growth of premium categories of Chocolate and Gum in Asia
Pacific/Eastern Europe
•
Premium Chocolate - driving force in growth in North America
•
Maturing consumer demand/private label expansion constrain value growth in Western Europe.
•
Eastern Europe, Asia Pacific and Africa and Middle East lead sales growth
Global Retail Sales by Sector
90000
80000
Value US$ millions
70000
60000
50000
40000
30000
20000
10000
0
Chocolate confectionery
Sugar confectionery
2002
2005
Gum
2007
Chocolate confectionery US$77 billion in 2007, up 4% on 2006
Sugar confectionery totalled US$44.3 billion in 2007, up 2% on 2006
Gum totalled US$77 billion in 2007, up 4% on 2006
Global Chocolate confectionery retail sales – Growth by
region
14.00
12.00
Percentage Growth Rate
10.00
8.00
6.00
4.00
2.00
0.00
-2.00
Western
Europe
Eastern
Europe
North
America
Latin
America
1998-07 CAGR %
Asia Pacific
Australasia
Africa and
Middle East
2006/07 (%) Growth
Eastern Europe, Latin America and Asia Pacific show strongest growth
Global sugar confectionery retail value sales – Growth by
category
7.00
6.00
Percentage Growth Rate
5.00
4.00
3.00
2.00
1.00
0.00
Mints
-1.00
Boiled sweets
Pastilles,
gums, jellies
and chews
Toffees,
Medicated
caramels and confectionery
nougat
Lollipops
Liquorice
Other sugar
confectionery
-2.00
-3.00
1998-07 CAGR %
2006/07 (%) Growth
Toffees, caramels and nougat, Pastilles, gums, jellies and chews and Lollipops
growing strongly
Global Gum retail value sales – Growth by category
16.00
14.00
Percentage Growth Rate
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Sugarised gum
Sugar-free gum
Functional gum
-2.00
-4.00
1998-07 CAGR %
2006/07 (%) Growth
Sugar-free and Functional Gum lead growth
Bubble gum
Organic
Health
Innovation
CONFECTIONERY
MARKET TRENDS
Premiumisation
Segmentation
Global Market Trends: Health
 Anti-oxidant properties
 New research on chocolate’s antioxidant and heart-healthy properties has had
a positive impact on consumer perception
 Manufacturers tap into the health trend by introducing ‘semi-OTC’ flavonolenriched lines
Global Market Trends: Health
 Withdrawal symptoms relief
 Chupa Chups Relax –
Spain – Launched early 2006 in the wake of Spain’s public
smoking ban
 Features herbal ingredients intended to calm consumers suffering from smoker
withdrawal symptoms
 Packaging reminiscent of cigarette packet
Global Market Trends: Health
 Energy boost
 Sport Beans by Jelly Belly Candy Co – US – Launched early 2007.
 Formulated with carbohydrates, electrolytes and vitamins C and E.
 Marketed towards athletes, ‘weekend warriors’ and sports enthusiasts of all types.
Global Market Trends: Premiumisation
Premiumisation trend in Western Europe and North America increases
differentiation from private label
 Mainstream manufacturers focusing on the introduction of premium highcocoa (>70%) dark chocolate lines, offering richer flavours and higher
flavonol content
 Sourcing chocolate by cocoa bean origin - targeting the “connoisseur
consumer”
 Retailers such as Tesco in UK, El Corte Ingles in Spain and Carrefour in
France are set to expand shelf space and offerings for high cocoa dark
chocolate.
Global Market Trends: Organic

Branded Organic Chocolate is positioned as a premium product.

Global retail sales for Organic Chocolate Confectionery reached US$401
million in 2006, up 17% up on 2005.

Strong demand for organic chocolate – Mergers & Acquisitions



Cadbury Schweppes acquired Green & Blacks in May 2005.
Hershey took over leading US organic manufacturer Dagoba Organic
Chocolate Co in November 2006.
Sugar confectionery: Organic lines remain relatively unexplored; but are of
increasing interest within the industry
Global Market Trends: Segmentation
 Halal Sugar confectionery is gaining popularity in countries with growing
Muslim communities, particularly the UK, Spain and Germany.
 In early 2007, Mederer Süsswarenvertriebs GmbH’s extended its Halal jelly
range through the addition of two new fruit flavours: Valensina Orange Pur and
Citrus Pur.
 Ummah Foods (March 2007) introduces caramel and orange Halal countlines
through the Wm Morrison Supermarket network in UK.
Innovation
Developed markets:
Semi-OTC properties
Experimenting with sensations
Natural Ingredients and hybrid products
Convenience through packaging
Developing markets:
Oral health
New flavors and fillings
Global Market Trends: Innovation in Developed Markets
Semi-OTC Properties
Slimming properties
Combination of liquid and solid
flavours
Energy boost
Odour sensations
Global Market Trends: Innovation in Developed Markets
Convenience through…
Larger formats
Slimmer formats
Introduction of…
Hybrid products
Natural ingredients
Global Market Trends: Innovation in Developing Markets
Unique Flavours, Fillings and Oral health
Fruit Juice fillings
Yoghurt flavours
Oral care and breath refreshing
properties
Key Learnings From Success
ORBIT – WRIGLEYJR, WILLIAM – RUSSIAN MARKET
 Wrigley’s global sales have benefited from a proactive approach to
emerging markets, not only tapping into the current growth of the gum
category but also actively driving up demand.
 The Russian market is a valid example of this. Retail sugar-free gum
sales in this country grew by 15% in local value during 2006. The
growth was stimulated by increasing health-consciousness among
Russian consumers and the increasing purchase-power of middle class
Russians in urban areas.
 Wrigley took full advantage of this trend, and invested heavily during 2006
in expanding its distribution network while advertising the health benefits
of sugar-free gum. Furthermore, it expanded its sugar-free gum range by
introducing juicy watermelon, cinnamon and strawberry flavours. As a
result, Wrigley’s sugar-free gum sales grew by 17% in local value in 2006.
The Future of Confectionery
Confectionery - Retail volume growth at world level
16000
Retail Volume '000 tons
15500
15000
14500
14000
13500
13000
12500
2007
2008
2009
2010
2011
2012
Confectionery forecast to grow at an average rate of 2.3% in retail volume
Global forecast retail volume by sector
9000
8000
Retail Volume '000 tons
7000
6000
5000
4000
3000
2000
1000
0
Chocolate confectionery
Sugar confectionery
2007
2010
2012
Gum
Chocolate confectionery retail volume sales – Growth by category
7.00
6.00
5.00
4.00
3.00
2.00
1.00
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Percentage Growth Rate
8.00
2007-12 CAGR %
2006/07 (%) Growth
Tablets, Bagged Selflines/softlines and Boxed assortments expected to see
strong market performance from 2007 to 2012
Sugar confectionery - Retail volume growth by category
4.50
Percentage Growth Rates
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
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2006/07 (%) Growth
Pastilles, gums, jellies and chews, Mints and Toffees, caramels and nougat
expected to see strong market performance from 2007 to 2012
Gum retail forecast volume growth by category
9.00
Percentage Growth Rate
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Sugarised gum
Sugar-free gum
Functional gum
2007-12 CAGR %
2006/07 (%) Growth
Bubble gum
Sugar-free gum and Functional gum expected to see the strongest market
performance from 2007 to 2012
‘semi-OTC’
properties in
chocolate
confectionery
Emerging
markets for
sugar
confectionery
Convenience &
environmental
awareness: Gum
Packaging
Market Opportunities
Expansion into
fast growing
impulse food
categories
Distribution
Differentiation
Market Opportunities
Semi-OTC properties
 Development of semi-OTC products – remains relatively unexplored in chocolate tablets and
boxed assortments.
Addition of chocolate in Ice cream, Snack bars and Breakfast cereals
 This trend offers the opportunity for global chocolate manufacturers to expand into fast growing
impulse food categories, while tapping into their brands’ well-established reputations.
Economic Growth in Developing Markets
 Sustained economic growth in developing markets provides international manufacturers with a
golden opportunity to step up investment on premium, sugar-free, functional novelties
Environment concerns
 Increasing concerns over environmental issues and CO2 emissions will play an increasing role
in consumer purchasing decisions, particularly in developed markets
Market Opportunities
Distribution
 The introduction of vending machines in fast food restaurants and near independent food

stores
Investment in expanding the number of these outlets might prove successful in other
developing countries – such as Morocco and Egypt.
Differentiation by…
 Gender: Chocolate Confectionery
 Ethnic groups: Gum lines
Packaging:
 Larger formats adaptable to spaces
 Convenience – for low energy consumption
 Getting across the message: Chupa Chups
A Word of Advice…Developed Markets
Sluggish growth in Bubble Gum - Innovation is key
Gum and Snack bars - Potential for synergies
 Continued desire among consumers for healthier
products
 Potential for growth in emerging categories
 Positioning – capture consumers’ attention
A Word of Advice…Developing Markets



Domestic and International players - An alliance for growth


Developing hybrid sugar confectionery lines
Education - The way forward in Functional gum
should draw inspiration from other successful developments in impulse food
products
Gum and Sugar confectionery combinations
THANK YOU!
Brian Morgan
Brian.morgan@euromonitorintl.com