The confectionery category needs to up its game
The upbeat theme of last month’s TFAP Exhibition in Singapore was ‘Reigniting the Industry’. It is a message that the moribund confectionery and fine food category should certainly take to heart. The latest Generation duty free figures, revealed by TFWA President, Erik Juul-Mortensen, show that sales dipped 0.3% last year.
It’s the second disappointing year in a row for this important US$ 4.86bn business – in 2015 confectionery and fine food sales dropped 4%. Now it’s true that other product categories besides confectionery suffered an anus horribilis in 2016. Some pretty strong headwinds buffeted our entire business last year – from terrorist attacks to currency fluctuations.
Yet I’d argue that confectionery is also being affected by a weakening of consumer demand in many mature markets. According to a recent report by Mintel, volume sales of chocolate confectionery were flat in key markets such as the U.S and U.K last year, causing cocoa prices to fall to a four year low in February.
Sadly the picture isn’t much brighter in emerging markets. In China, retail volumes of chocolate fell 4% last year (Euromonitor). There were also poor domestic performances for the category in Brazil (-6%) and Russia (-2%). The one outlying market was sweet-toothed India, where sales grew by 13% between 2015 and 2016 (Mintel).
You are not likely to see it being discussed in the mainstream travel retail trade press, but the clear, long-term problem for the sector is the growing global movement against sugar. Sugar is being blamed for the rising obesity epidemic and NO amount of consumer research, category management and range rationalisation on the part of operators and brand owners will change that.
