Transcript Food Bites - Sugar-based Confectionery 2011

Food Bites
Sugar-Based Confectionery
Snacks and Confectionery
Annual Market Quantification
March 2011
Industry context
Sugar confectionery is made up of a wide array of sweet confectionery, commonly known
as sweets. This analysis includes boiled, éclairs, gums and jellies, liquorice, lollipops,
marshmallows, other sugar confectionery, panned, as well as toffees and chews.
The main ingredient used in the manufacture of sugar based confectionery is sucrose.
Through varying the types of ingredients used, boiling temperature and shaping methods,
confectioners are able to make a wide range of sugar treats.
In South Africa, boiled sweets are the most lucrative market within sugar confectionery
with over one quarter of both volume and value totals. Niche offerings within this
category include liquorice, other sugar confectionery as well as éclairs. There is a relatively
higher concentration of small regional players in this category than in chocolate, bars and
gum, possibly because of lower entry barriers.
Independent wholesale is the dominant distribution channel used to distribute sugar
confectionery in South Africa with over a third of the volumes sold through this channel.
General retail and wholesale are also very popular distribution channels with over 50% of
the industry’s volumes channelled this way. Similar to other confectionery products,
regional distribution is concentrated in densely populated areas.
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2010 Category
Shares
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Top 3 Analysis
Boiled sweets decline
• Boiled sweets continue to play a major role in the sugar confectionery category with
26.7% contribution to total volumes in 2010.
• Growth in the boiled sweets market averaged -0.6% per annum over the past four
years. In 2010, the category shrunk by 2.9% and is yet to recover to the peak achieved
in 2004. 2010 saw a drop in per capita consumption of 3.3% with South Africans
consuming 9.5% less of boiled sweets than they did in 2000.
• The growth trend in the boiled sweet category is typical of products in the maturity
stage of the product life cycle and focus should be directed at keeping consumer
interest through activities such as flavour and packaging innovations.
• There is a growing trend towards sugar-free sweets and it is expected that this will
rejuvenate the category, going forward.
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Top 3 Analysis
Conservative outlook for
toffees, caramels chews
• Caramels remain a niche offering within the toffees, caramel and chews category
with 7.3% contribution to the category’s volume, down 1.0% from its 2009 share.
• The category maintained its position as the second most popular product in sugar
confectionery. It contributed 16.3% to total volumes and 14.9% to market value.
• Toffees, caramels and chews showed healthy growth of 5.1% in 2010 but the
category is expected to grow at much slower rates in the medium term. The
increase in ingredient prices was noted as one of the factors that will curb higher
levels of growth in the medium term as the cost of imported toffee ingredients
continues to climb.
• Local manufacturers face stiff competition from cheaper Indian and Brazilian imports
which are preferred by some outlets who focus on the bottom line
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Top 3 Analysis
Limited growth for
gums and jellies
• Gums and jellies are expected to return to 2006 levels by 2012. The category
remained stable from 2009 with 1.5% growth recorded and is excepted to show
higher growth levels in 2011. Per capita consumption was at 315.9g, up 1.1% from
2009 levels.
• General retail continues to be the main distribution channel for gums and jellies with
42.3% of the industry’s output distributed via this channel. Volume channeled to
wholesale chains shrunk by 10.1%, while independent wholesale maintained its
volume with a marginal growth rate of 0.9%. Regional distribution remains
concentrated to high population density areas with Gauteng, KwaZulu-Natal and
Western Cape contributing close to two thirds of the total volume.
• The good performance of this category is attributed to the health benefits of jellies
communicated to consumers by most manufactures.
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Food Bites
Sugar-Based
Confectionery
For more information,
contact:
Jan Wegelin
Research Manager
Tel: (011) 615 7000
Mobile: 082 938 0744
www.bmi.co.za