The UK sugar confectionery market has proved itself to be one of the few recession-proof food and drink markets, with consumers not cutting sweets out of their diets despite pressure on many household budgets.
In recent years, annual growth in the market has hovered around the 5% mark, a trend expected to continue in the years up to 2016. In 2011, the market reached £3,976 billion, a 21% increase over a five-year period.
Many products in the sugar confectionery segment have undergone notable price increases in the past decade. Confectionery manufacturers have had to tackle rising costs by passing on the increase to the consumer as well as devising new formulations of current products and looking for new formats altogether.
In some ways, rising prices are unavoidable for manufacturers which have had to deal with rising commodity prices in recent years. However, a favourable harvest in 2011 perhaps opens the door for operators to polish their value credentials by tackling rising prices head on, something which there is a strong consumer demand to see.
Whilst such inflation has fuelled value growth in the market, it is likely to have curbed volume growth. Ongoing consumer concerns about healthy diets and competition from other treats and snacks such as chocolate and crisps, which have enjoyed more active innovation and marketing support, are also likely to have played a role in curbing underlying growth.
Consumer tastes appear to be shifting from traditional hard to soft confectionery as static sales of hard sweets have seen the segment lose market share despite a recent rise in NPD.
Soft fruits, which include gums, jellies and pastilles, have grown steadily since 2009 and represent 36% of the UK sugar confectionery segment in 2011. Gum represents just under 20% of the total UK sugar confectionery market, and although the sector posted growth in 2011, its share fell slightly due to the growth rate falling behind that of the overall market.
For more information on the UK sugar confectionery market, see the latest research: UK Sugar Confectionery Market
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