Confectionery Market Anticipated to Generate a Revenue of $189.9 Billion, Growing at a CAGR of 3.7% from 2020 to 2027Download Sample Reports Overview
The global confectionery market is estimated to be valued at $227.4 billion by 2027, surging from $189.9 billion in 2019 at a noteworthy CAGR of 3.7%.
Impact Analysis of COVID-19 on the Confectionery Market
The global market for confectionery is estimated to experience a decline amid the COVID-19 pandemic. The decrease in growth of confectioneries is due to the disruption in transportation and closing of borders across the globe. Also, in initial days of lockdown, the prices of raw material such as cocoa decreases and price of transportation increased due to supply shortage. Therefore, demand for confectionery products is consequently projected to witness a stagnant growth.
Furthermore, there are certain initiatives taken by key players in the confectioneries market helping the society to overcome the situation that COVID-19 has created. For instance, Nestle, one of the largest food company in the world, announced on April 2020 that, they have paused their production in some locations temporarily based on government guidelines but they are repurposing their production in some locations so they will ensure to fulfill the evolving demand. Such type of initiatives helped societies to overcome the issues such as lack of proper supply of confectioneries during Covid-19 crisis.
Also, there are certain countries where postage and deliveries are possible during the pandemic. Therefore, confectionery manufacturers are able offer various products online and thereby few companies have seen an upsurge in the sales during the lockdown. These factors are anticipated to create lucrative investment opportunities during the forecast period.
Global Confectionery Market Analysis
The enormous growth of the global confectionery market is mainly attributed to availability of innovative confectioneries such as diverse range of confectionery products in new flavors and many others. Also, manufactures are offering various confectionery flavors including herbal fillings, functional ingredients, nut based, exotic, and tropical fruit flavors according to the demand of consumer. Moreover, growing trends of gifting confectioneries such as chocolates, cakes, cookies, and others has accelerated the growth of confectionery market. Moreover, leading market vendors are adopting various strategies, product innovation and acquisition to sustain in global market. For instance, Ferrero International, in January 2018, manufacturer of branded chocolate and confectionery in Italy, announced that they have acquired Nestle’s U.S confectionery business and this acquisition will offer more than 20 brans of confectioneries. The main aim of the acquisition is to expand the company’s reach in U.S with premium confectioneries. These types of factors and acquisition will fuel the growth of the market.
The high cost of raw materials and growing health concerns in consuming sugar-based confectioneries may obstruct the growth of the market. Moreover, sugar and cocoa fields need high maintenance to avoid any damage due to crop diseases and weather conditions. These are some of the factors that will restrict the confectioneries demand and create a negative impact on the market during the forecast period.
The growing prominence of organic confectioneries is one of the important factors contributing to the growth of the confectionery market and it may create huge opportunities for the global confectionery market, in the future. Moreover, changes in lifestyles, health concerns, and eating habits of people that includes adoption of healthier snacking will increase the demand for organic confectioneries in the global confectionery market. Therefore, manufacturers across the globe introducing different ranges of on-the-go items such as chocolate bars, chocolate snacks, and other snack bars that gives nutrition and provide a healthy diet to consumers. Such type of adoptions may further lead to lucrative market opportunities in the global confectionery market in the upcoming years.
Global Confectionery Market, Segmentation
The global confectionery market is segmented based on type, distribution channel type, and region.
The type segment is further classified into chocolate confectionery, sugar confectionery, and gum & candies. Among these, chocolate confectionery sub-segment is anticipated to have the fastest as well as dominant market growth and surpass $126.5 billion by 2027, with an increase from $102.1 billion in 2019.
The market growth can be attributed to increasing innovative branding activities, promotional events, and appealing packaging of products are also some of the factors that increase the demand for chocolates among the consumers. Moreover, there are different strategic collaborations among the market players to acquire a prominent position in the marketplace. For instance, in April 2018, The Hershey Company, largest chocolate company in America, announced that they are investing more than $500 million till 2030 for their cocoa production, which is primarily focusing on polishing the production of cocoa in America. All these factors may create a positive impact on the segment throughout the forecast period.
The distribution channel segment is further divided into supermarkets/ hypermarkets, bakeries, convenience stores, online, and others. The supermarkets/ hypermarkets sub-segment is anticipated to have a dominating market share in the global market and register a revenue of $92.4 billion during the analysis timeframe.
This growth is projected to be the result of availability of diverse range of new flavors and textures of confectioneries in supermarkets. Furthermore, supermarkets are gaining huge attention among the consumers because most of them prefer mass purchase of groceries. Therefore, supermarket is the best option because they offer a one-stop buying experience. These types of factors may aid in the generation of a lucrative revenue throughout the forecast period.
The confectionery market for the Asia-Pacific region is projected to witness rapid growth. This market generated a revenue of $45.9 billion in 2019 and is further projected to reach up to $60 billion by 2027.
The demand for confectioneries is surging in the Asian region increased specifically because of rise in confectionery items as a gifting option along with increasing urbanization in countries such as Japan and Australia. These are some of the factors that will propel the growth of the confectionery market in Asian countries. Moreover, factors such as rapid growth in consumer spending on confectioneries, purchasing capacity, and the eagerness to try new and innovative products of confectioneries will eventually foster the Asia-Pacific confectionery market, in the upcoming years.
Key Players in the Global Confectionery Market
- Mars, Incorporated,
- The Hershey Company,
- Mondelez International, Inc.,
- Ferrero Group,
- Meiji Co., Ltd.,
- Chocoladefabriken Lindt & Sprüngli AG
- pladis Global,
- Ezaki Glico Co., Ltd.
- Haribo GmbH & Co. K.G.
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Confectionery Market
- Bargaining Power of Suppliers: The companies involved in application security business are extensive in number. Thus, companies have several options and alternatives to handle expensive supplies. Moreover, unpredictable demands in supplier pricing may impact company profitability. Hence, there will be low threat from the supplier side.
Thus, the bargaining power of the suppliers is moderate.
- Bargaining Power of Buyers: Buyers have high bargaining power, primarily because of the huge number of confectionery providers that offers various products in best prices. The buyers can hence choose the service that best fits their preferences.
Hence, the bargaining power of buyers is high.
- Threat of New Entrants: Startups entering this market are providing innovative confectioneries to the customers. However, companies that are already in confectionery market are globalized and
therefore, the threat of the new entrants is less.
- Threat of Substitutes: There are many products available like flavored yoghurts that can be switched with confectioneries. People are experimenting with different products to suit their sweet tooth.
Therefore, the threat of substitutes is high.
- Competitive Rivalry in the Market: The ventures operating in the global confectionery are opting for various businesses deployment strategies to hold their position in the market. Several companies such as Mars Incorporation and The Hershey Company are launching innovative confectionery product in the international market and strengthening the footprint worldwide.
Therefore, competitive rivalry in the market is high.