Table of Contents
- The total revenue of the European confectionery product market was valued at € billion in 2013 and is expected to reach € billion in 2018, based on a negative compound annual growth rate (CAGR) of xx%.
- However, in terms of the U.S. dollar (USD), forecasts show a CAGR of xx% by 2018, mainly due to the projection of a stronger Euro against the USD. The market was valued at $xxbillion in 2013 and is projected to reach $xx billion in 2018.
- The value of the Euro against the USD is expected to experience a CAGR of xx% during the study period (2013–2018).The negative CAGR in Euro implies that products priced in Euros will be less competitive than those priced in USD, thus restraining growth. - Western Europe (WE) continued to be the dominating market in terms of revenue, constituting xx% of the market share, in 2013. However, most of the growth projected during the forecast period is expected to be in Eastern Europe (EE). - Historically, chocolate confectionery has been the dominating segment; it made up xx% of market revenue in 2013 and is expected to make up xx% in 2018, provided all other market conditions remain the same.
- Sugar confectionery is expected to experience a negative CAGR from 2013–2018. This is partly offset by the positive CAGRs forecasted for the other segments.
Definition and Segmentation
- The study focuses on the European confectionery product market. The base year is 2013 and the forecast period is 2014–2018.
- Market size is calculated based on the total market revenue.
- The segments include chocolate confectionery, sugar confectionery, and gum.
- The countries included in this study are:
o Western Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
o Eastern Europe: Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, and Ukraine
- Revenue is mainly represented in Euro, with reference to the USD when necessary.
- Per capita consumption (PCC) is measured in kilograms (kg).
Key Industry Challenges
- Health and Wellness Trend: Confectioneries are generally considered to be unhealthy because of the quantity of sugar and other additives, such as flavourings, colourants, and sweeteners used in their production. As a result, confectioneries have been linked to tooth decay, and diseases such as obesity and diabetes.
- Governmental Regulations: In view of the negative associations mentioned above, there is increasing governmental intervention in the form of regulatory standards, which are sometimes not consistent across the globe. Furthermore, it takes a considerable amount of time and effort to obtain governmental approval for the use of novel ingredients. Furthermore, confectioneries are generally targeted towards younger consumers; however, growing concerns regarding child obesity have resulted in regulatory limitations on related advertisements, which have constrained market growth. There have also been criticisms on some marketing strategies such as keeping confectionery products near checkout tills in supermarkets.
- Sustainability and Production Issues: Cocoa, a key ingredient in the production of chocolate confectionery, has been subject to discussions on sustainability, particularly in Africa (the largest producing region).On average, % of the world’s cocoa is produced in Africa, according to estimates from the International Cocoa Organisation (ICCO). There has been a lot of criticism on the sustainability of cocoa production in this region, as local producers face challenges such as low income, poor infrastructure, and lack of education.
As a result of these poor economic conditions, child labour has become a prominent issue. In 2011, the Fairtrade Foundation estimated that African cocoa producers were receiving only as much as xx% of the cost of chocolate paid by consumers in developed countries. These issues have caused consumers to question ethics across the supply chain.
- Rising Cost of Main Ingredients:
o Milk: The cost of dairy production has risen on the back of increased prices for feed ingredients, thus raising the cost of milk.
o Sugar alternatives and natural sweeteners: The increasing demand for products with less or no sugar has raised the price of sugar alternatives.
Key Success Factors
- Product innovation, in line with extensive customer research
- Nutritional and functional properties such as low calories and natural flavours
- Safe and sustainable production, thus earning consumer loyalty
- Continual access to cost-effective raw materials via vertical integration
- Effective marketing strategies with advertisements that do not offend consumer sensitivities or go against campaigns against particular ingredients
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