Bars are down, but chocolate is up. The latest trends in the confectionery market, as published by BMI, show the winners and losers for 2009. BMI Research quantifies the South African confectionery market on an annual basis, including both imports and exports, and has a wealth of data in terms of recent market dynamics. 

Overall, the confectionery market is sized at just over 200 000 tons for 2009. The chart below shows the volume breakdown of the market for the base year.

 Chocolates

Chocolate volumes increased quite significantly during 2009. This, in the wake of declines in GDP and consumer spending, highlights the resilience of the category in the face of economic recession. Speciality chocolates in particular were the primary driver of this growth, with only limited growth seen in the more conventional chocolate slabs.

Slabs saw a substantial price increase during the base year, where this may predominantly be attributed to inflationary input costs, including the likes of cocoa. 

Bars

The consumption of bars declined in 2009. Countlines are primarily to blame for the poor performance seen within the category.  

While the volume growth in health bars bolstered overall bar category volumes, this was not sufficient to counteract the downward trend caused by dwindling countline volumes. While health bars are currently performing well, it is expected that growth rate will taper off in future as players exit the market.  

Gum

The gum market is dominated by bubble gum with a nearly 90% share of product volumes. Chewing gum makes up the balance of the industry.  

The gum category saw an 11.3% growth during 2009, where this was predominantly due to imported volumes rather than locally manufactured stock. Given the substantial volumes of imports of this category, the local market consumption has traditionally been fairly volatile year on year. Marginal growth is anticipated for the short term as new flavours and pack innovations are expected to underpin future category volumes.

Sugar-Based Confectionery

Boiled sweets dominate the sugar-based confectionery market. The second tier of the market is represented by gums and jellies, toffees, caramels and chews, panned sweets and panned confectionery.  

Although the country saw recession during 2009, sugar-based confectionery still managed to achieve a limited growth rate. This follows the trend pattern seen in recent years.

Collectively, the industry on average reported a limited 0.4% increase in the average retail selling price in 2009.  The industry did however experience an increase in input costs for basic ingredients such as sugar. This highlights that manufacturers were willing to trim their profit margins in order to maintain share.

BMI Research; www.bmi.co.za