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Success Tastes Sweet

Source:ringier Release Date:2011-10-17 728
Food & Beverage
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Global confectionery giants and domestic players are enjoying sweet returns in Asia's emerging markets

Colourful Candy Trail ? Christopher Howey | Dreamstime.com

RISING consumer affluence in major Asian markets like India, Indonesia and China will be crucial to the growth of the confectionery segments. The economic recovery in emerging markets is already having an impact on the performance of key confectionery categories, according to Franciso Redruello of Euromonitor International.

In general, stronger economic growth in these emerging markets boosted consumer confidence and led to increased disposable incomes. This benefited the performance of key indulgence categories, like chocolate confectionery and functional gum, which command higher unit prices and are particularly sensitive to an improvement in the economic climate, said Mr Redruello, a senior Packaged Foods analyst at Euromonitor.

 Sales of children's  confectionery are also benefiting from economic recovery in emerging markets.  Although confectionery targeting children is difficult to define as a category in its own right - after all, many confectionery products are consumed by adults and children alike - some categories, like pastilles, gums, jellies and chews, boiled sweets and chocolate with toys, are mostly targeted at children. "Children generally determine the way these products are marketed, the nature and direction of innovation as well as local and global distribution patterns," Mr Redruello noted in an Analyst Insight.

Snacks with Benefits

Consumers in middle socio-economic groups are opting for healthier impulse snacks, including snack bars and sugar-free gum.

In China, products such as chocolate confectionery and functional gum are becoming mainstream indulgences in urban areas. "Rapid economic growth and increasing awareness of health is driving demand for confectionery categories  in China that claim to offer wellness benefits. This trend is being  underpinned by higher disposable incomes amongst middle-class consumers, who are turning to snacks offering not only indulgence but also health properties," Mr Redruello stated in an Analyst Insight from Euromonitor.

Medicated confectionery was the best performer India in 2010, growing by 2.4%  in value terms. "Its robust performance was partly down to the fact that most medicated confectionery products contain ayurvedic herbal ingredients. The latter are quite familiar to Indian consumers in terms of taste and health benefits," he said in separate Analyst Insight.

However, Euromonitor forecasts that India's urban population - now  accounting for just 30% of the total (1.2 billion) in 2010, but set to increase by 46 million over the 2010-2015 period - will drive demand for processed food items like dairy and chocolate products.

Chocolates with Claims

Chocolate confectionery is the most dynamic category within the China  confectionery market, and achieved the fastest growth in both volume and value terms in 2010. Dark chocolate, favoured by female consumers for its lower fat content, recorded strong growth in 2010 whereas plain chocolate declined.

Indulgence in chocolates, considered healthier than other sweets, is rising in emerging markets (Photo ? Maxim Shebeko | Dreamstime.com

 

"In addition, dark chocolate producers claim that it can increase antioxidants in the blood, thereby preventing high blood pressure and heart disease," said Mr Redruello, noting that Mars (China) and Ferrero China launched Dove Xinshui dark chocolate and Ferrero Rocher Lang Mu,   respectively, in late 2009 and 2010.

In India, chocolate confectionery sales grew by 13% in constant value terms in 2010, a stronger performaAir Max 1 Mid Liberty Max Kicks

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