28 Jul 11 The sweet fortunes of SA’s confectionery market
South Africa’s confectionery sales climbed over 19 percent between 2006 and 2010, notes a recent overview of the country’s sweets and chocolate market by Leatherhead Food Research. Value sales of sugar confectionery, gum and chocolate in South Africa were worth R10.44bn in 2010, it says, adding market growth has been helped by World Cup 2010.
South Africa has one of the largest and most well-established confectionery markets on the African continent, with per capita consumption of chocolate of 1.3kg last year.
Although low by standards in Western Europe and North America, these levels are considerably higher than many of the country’s African neighbours.
“Unlike many of the region’s other countries, South Africa has a sizeable market for chocolate confectionery, since income levels and therefore consumer spending tend to be higher than the regional average, whilst the country also has a fairly developed retail food industry,” notes the review.
Sugar confectionery consumption is slightly higher at 2.1kg per capita, a situation that’s similar across Africa due to its low price.
In terms of sales, the chocolate sector, reports Leatherhead, accounts for a leading 50.5 percent of the overall market, a figure which has declined slightly from almost 52 percent in 2006.
Sugar confectionery accounts for an additional 41 percent of total sales, with chewing gum making up the remaining 8 percent.
In volume terms, the South African confectionery market is dominated by the sugar confectionery sector, which hit 104 000 tonnes last year, equivalent to almost 56 percent of the total market and up by 9.5 percent from levels in 2006.
The chocolate sector accounted for an additional 34 percent of total market volume in 2010, ahead of chewing gum (10 percent).
The chocolate sector is dominated by bars and blocks, which account for over 40 percent of total market volume, ahead of boxed and bagged assortments (30 percent).
The Leatherhead report notes growing evidence of sugar-free confectionery products making headway in the market, especially in the chewing gum market where sugar-free varieties account for a sizeable 95 percent of overall sales.
Many multinationals present in South Africa, such as Kraft/Cadbury and Nestlé, manufacture domestically. Kraft, wiht its acquisition of Cadbury, now has around half of the South African chocolate market, plus ownership of a major production facility located at Port Elizabeth.
Cadbury dominates the gum market, with a share in the region of 55 percent. Wrigley’s penetration is slightly lower – it has 30 percent of gum sales, according to Leatherhead’s data. Nestlé has roughly a 15 percent of the chocolate sector, with brands such as KitKat, Bar One, Aero, Rolos and Smarties.
Ferrero, with brands such as Kinder chocolate and Tic Tac mints on the South African market, recently expanded its operations there, said Leatherhead, with the brand owner recently opening a new manufacturing site near Johannesburg.
The market’s leading domestic supplier is Tiger Brands, which accounts for around a fifth of the chocolate sector and almost half of the sugar confectionery market.