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UK chocolate market structure Essay

The UK confectionery market has been forecast to increase at a compound annual growth rate (CAGR) of 2.16% over the next five years, increasing from a per-capita consumption of over 8.7Kg at the start of 2012, to reach just over 9.4Kg by 2017. According to a recent report, ‘The Future of the Confectionery Market in the United Kingdom to 2017,’ in terms of categories, ‘Chocolate’ is forecast to continue as the largest sector in the industry, and will see a volume of just under 400 million Kg by 2017. The second largest category, ‘Sugar Confectionary’ will see a volume of around 180 million Kg by 2017. With consumers staying at home to save money because of the economic crisis, demand for this format has significantly increased. As a result, rather than introducing new products in an already saturated market, manufacturers are increasingly introducing sharing-format variations instead.

The fastest growing category is suggested to be ‘Gum’, which will grow at a CAGR growth rate of over 2.62% between 2012 and 2017. Health has become a growing consideration with the large majority of gums now sugar-free (87%), and reporting to offer health benefits such as teeth whitening and plaque prevention. Notable product developments currently being used by manufacturers in the confectionery industry are figure-shaped confectionery and price-marked packs. The former adds animation to consumers’ confectionery experience, while the latter is a response to consumers’ growing preference for price marked products. Although the confectionery industry is doing well overall, there are certain points of concern.

Premium brands are struggling to cope with the economic crisis, with Thorntons suffering particularly badly. In addition, although the price of cocoa has declined, sugar is more expensive than ever before. Rising input costs must be absorbed somewhere; thus far, manufacturers have increased retail prices and reduced products’ weight. However, if the trend continues year on year, this may end up costing manufacturers’ their consumer loyalty. For more information on the UK confectionery market, see the latest research: Confectionery Market Research


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