The global confectionery market has been forecast to increase at a compound annual growth rate (CAGR) of 3% for the five-year period 2011 - 2016, rising from a valuation of $157,640 million in 2011, to hit an industry value of $182,697.1 million by the end of 2016.
Confectionery is related to the food items that are rich in sugar and often referred to as a confection. Modern usage may include substances rich in artificial sweeteners as well.
Confectionery items include sweets, lollipops, candy bars, chocolate, cotton candy, and other sweet items of snack food. The term does not generally apply to cakes, biscuits, or puddings which require cutlery to consume, although exceptions such as petits fours or meringues exist.
Chocolate confectionery makes up the bulk of the market, with countlines accounting for the majority share within the sector. However, the subsector that has experienced the most drastic growth in 2011 is that of boxed chocolates and sharing bags.
With consumers staying at home to save money because of the economic crisis, demand for this format has significantly increased. As a result, rather than introducing new products in an already saturated market, manufacturers are increasingly introducing sharing-format variations instead.
Historically, the chocolate confectionery market has been characterised by the dominance of a number of well established brands, such as Cadbury's Dairy Milk, Mars Bar and Kit Kat. Although some brands enjoy a rich heritage, the key need in a busy and developed market sector is innovation, not just of existing brands but also in the development of completely new brands.
Brand-led innovation is a vital component in the growth of this market as it enables organisations to build competitive advantage. Over recent years, competitors in the confectionery market have made significant investments in new product development.
Although the confectionery industry is doing well overall, there are certain points of concern. Premium brands are struggling to cope with the economic crisis, with Thorntons in the UK suffering particularly badly. In addition, although the price of cocoa has declined, sugar is more expensive than ever before.
Rising input costs must be absorbed somewhere; thus far, manufacturers have increased retail prices and reduced products' weight. However, if the trend continues year on year, this may end up costing manufacturers' their consumer loyalty.
For more information on the confectionery market, see the latest research: Confectionery Market
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