Key Note Media Centre
Consumers Continue to Enjoy Chocolate and Sweets, as Market Sees 7.5% Growth
According to the Confectionery Market Update 2012, a new report published by market intelligence provider Key Note, the confectionery market grew by 7.5% to £5.41bn in 2011. Within the industry, chocolate confectionery is estimated to be worth £4bn after rising by 7.2% over the course of the year, while the value of the sugar confectionery sector rose by 8.5% to reach £1.41bn. Key Note attributes the industry's success to various factors, though consumer demand for sharing formats played the dominant role.
In an effort to combat the economic downturn and to save their money, consumers are increasingly opting to stay at home for a 'night in' rather than going out. This is true whether they are entertaining guests or relaxing. Confectionery sweetens this experience, yet everyone munching on their own chocolate bar is not very social; as a result, there has been a rise in the demand for sharing bags. 2011 saw a surge in the introduction of this format and this trend is set to continue in 2012, as the crisis persists. Rather than developing new products, manufacturers have transformed existing ranges into bite-sized formats, which are ideal for sharing.
It is safe to say that the British population loves confectionery. In June 2011, TGI conducted a survey on behalf of Key Note which revealed that 88.6% of respondents ate chocolate bars and other chocolate items, excluding boxed chocolates, in the 12 months preceding the survey. This phenomenon has naturally contributed to a certain degree of the industry's success. However, because the market is saturated with products, manufacturers have had to get creative to make their goods stand out on retail shelves. Dynamic and interactive marketing campaigns are on the rise in the confectionery industry. The Internet and smartphones have opened a channel of creativity through which manufacturers can build a relationship with consumers beyond the product, using mechanisms including games and votes. In an industry where product innovation is limited, these kinds of campaigns are the way forward, as they breathe excitement and energy into the market beyond consumption.
The growth rate of the sugar confectionery sector was higher than that of chocolate in 2011 because of consumer perception that these products are the healthier option. While there is an increasing amount of 'healthy' confectionery, Key Note does not believe this is a dominant trend. When consumers indulge in confectionery, most want to treat themselves rather than be preoccupied by the amount of fat in their sweets or chocolate bar. As a result, manufacturers have opted instead to produce confectionery that uses more dark chocolate, which is free from artificial colours, flavours and preservatives, or is made using fairtrade ingredients.
In spite of high demand and sales, 2011 has not been an easy ride for confectionery manufacturers. The price of sugar has shot up drastically and production costs are weighing profit down. Genuine innovation is rare, meaning that manufacturers have to devise new ways of keeping the spark in the industry. The negative connotation of confectionery as a contributor to growing obesity in the UK also threatens the industry.
Still, Key Note concludes that 2012 will be a good year for industry. Sharing packs, interactive campaigns and price-marked packs will be the primary contributors to this growth. In addition, manufacturers will capitalise on the year's events, including the Olympics, to further drive sales. Based on the current market and conditions, Key Note anticipates that the confectionery market in the UK will be worth £6.77bn in 2016.
Press enquiries: Jack Sykes at Key Note at email@example.com or 0845 504 0452. Press/review copies of the report are available on request.