A Bittersweet Future for the Western European Confectionery Market
Alternative snacks are set to continue to outperform confectionery products in the Western European countries, according to the research company Euromonitor.
The savory snacks category is forecast to rise with over 2%, while sweet biscuits, snack bars and fruit snacks category, chocolate and sugar confectionery, will record around 1% increase, at CAGR 2018-2023, explained Ivan Koric, senior analyst food and drinks, during a presentation at ISM Cologne.
The analyst mentioned that the confectionery market in the Western European countries registered a declining consumption trend, having a growing image problem and confronting the competition coming from snack alternatives. On the other hand, premiumization, product diversification, new experiences and innovations are expected to support the sales. The largest growth is expected in chocolate confectionery.
Moreover, premiumization offers opportunities in mature markets. An added value and personalization make the consumers feel it’s worth spending on.
Per capita spending on premium snacks is expected to rise in the UK from EUR145 (2018) to EUR160 (2023); in Germany from EUR127 to EUR 139; in France from EUR100 to EUR109; in Italy from EUR55 to EUR59; in Spain from EUR48 to EUR60 and in Turkey from EUR22 to EUR35.
A challenge for the confectionery category is the changing of snacking habits and the launching of healthier product options. The digitalization is also a factor affecting the confectionery products, with more than ever connected consumers, who monitor characteristics and calories of the products by using tracking apps.
Conventional snacks, such as chewing gum, boiled snacks and toffees & caramels, recorded the strongest decline, with a value of EUR5.7bn in 2018. The most important growth is registered by healthy snacks, such as energy bars, vegetable chips and fruit & nut bars, reaching EUR819m.
According to Koric, the Western Europe is the more mature region in terms of growth and the largest confectionery market in the world. More dynamics regions come from countries in the Middle East and Africa, followed by Eastern Europe and Latin America. The confectionery retail volume recorded a 0.3% growth, and a 1.6% retail value growth, CAGR 2013 – 2018.
In 2018, the confectionery category totalized a EUR47bn value (including chocolate confectionery – EUR32bn, Gum – EUR3bn, sugar confectionery – EUR12bn). At the same time, sweet biscuits, snack bars and fruit snacks category recorded EUR16.5bn value, while savory snack registered EUR34.7bn.
It must be said that Germany and UK dominate confectionery sales as retail volume sales in thousand tones and per capita consumption in kg. When it comes to per capita consumption in terms of value, the top is dominated by countries like Switzerland (EUR239), Norway (EUR228) and Denmark (EUR217), while Germans spent EUR127 and British – EUR145 per capita in 2018.
An image problem
Sugar confectionery is confronting an image problem, the analyst said. The war on sugar is ongoing and media campaigners fight against high sugar consumption in industrialized countries. “White sugar is particularly considered unhealthy, more artificial, while cane sugar is considered a more natural option,” Koric mentioned.
Legislative developments such as sugar taxes were introduces in several countries – UK, France, Portugal, Ireland, while Hungary adopted a nutritional tax on products with a high content of sugar and salt. Calls for tax on confectionery are also on discussion in several countries.