The Total Addressable Market (TAM) for confectionery was valued at USD 298.4 billion in 2022. It is estimated to reach USD 421.05 billion by 2031, growing at a CAGR of 3.9% during the forecast period (2023 – 2031). The term "confections" describes foods high in sugar and carbohydrates. A wide variety of goods are included in it, including chocolates, cookies, bars, gummies, mints, and others. One of the essential things in the confectionery sector is product innovation. Innovation is typically fueled by varying consumer eating habits and tastes and health awareness and consciousness among consumers. To meet shifting consumer demands, manufacturers broaden their product offerings by incorporating functional ingredients, tropical fruit, organic herbal fillings, and nut-based & exotic flavors. The growth of the middle class as a consumer base has fueled the market for premium goods.
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Innovation, processing, and packaging are the main areas of market growth in the confectionery industry. Factors such as health awareness & consciousness among customers and varying consumer eating habits & tastes tend to drive innovation. Manufacturers increase their product range by including functional ingredients, organic herbal fillings, tropical fruit, and nut-based & exotic flavors in product formulations to meet changing consumers' demands. Innovative packaging strategies such as attractive jars, family-sized packs, resalable packaging, and bags & tubs also contribute to higher sales of products. In 2018, Tic Tac brand launched Tic Tac Gum, an innovative mint in a gum format. It was available in three refreshing flavors, fresh mint, spearmint, and watermelon. The brand was also awarded the Most Innovative New Product Award in the mint and gum category at the National Confectioners Association (NCA) Sweets & Snacks Expo hosted in Chicago, IL. The introduction of slimming properties, a combination of liquid & solid flavors, odor sensations, and energy boosts in confectionery products drives the growth and development of the confectionery market globally.
Retail Market Expansion
The retail industry includes companies and individuals involved in selling finished products and goods to end users. A wide range of confectionery products is vented through retail channels such as hypermarkets, supermarkets, convenience stores, discounters, forecourt retailers, and grocery stores. Internet retailing, discounters, and convenience stores are the fastest-growing retailers in the confectionery industry. These stores act as a global marketing tool, which assists in building an impressive premium image and increasing the brand exposure of various confectionery products. Therefore, retail expansion is a significant factor driving the confectionery market. Tesco Plc (the U.K.), Aldi Stores Ltd. (Germany), Reliance Retail (India), and Walmart (the U.S.) are a few of the top retailers of confectionery products.
Increase in Health Awareness
Sugar is considered the main ingredient responsible for the rise in obesity and diabetes rate. Credit Suisse Equity Research conducted a survey and found that 86% of medical professionals link obesity with high sugar intake. The World Health Organization (WHO) recommends not more than ten teaspoons of sugar intake in daily diets and advises that additional health benefits can be obtained if we reduce the consumption to 5 teaspoons. The average sugar consumption in the U.K. is 12 teaspoons. Furthermore, sugar is referred to as "the new tobacco" in some areas of the U.K. due to its harmful effects. In 2018, world import and export revenue of sugar and sugar confectionery declined from $46.2 million in 2017 to $42.5 billion in 2018. Therefore, increased health awareness among customers has restricted the sugar confectionery sales volume.
The Rise in Demand for Organic and Premium Candies
The megatrend of organic and premium candies has attracted a wider range of consumers. Most consumers are ready to pay a high price for organic candies, believing they have additional benefits. However, many customers have witnessed the high acceptance of organic chocolates as they are rich in antioxidants. The dark and organic sweets market is growing significantly, owing to the health-halo benefits of dark chocolate and its pure ingredients. For instance, the USDA-certified Organic Candy Corn by YumEarth was one of the fastest-selling candies, owing to the high demand from consumers. Millennial consumers mainly drive the market for organic sweets as they are not only concerned about the effects of pesticides, hormones, and antibiotics on health but are also well-versed in food.
The global confectionery market is segmented by product type, age group, distribution channel, price point, and region.
By product type, the global market is categorized into hard-boiled sweets, mints, chocolate, gums & jellies, caramels & toffees, medicated confectionery, fine bakery wares, and others. The chocolate segment was the highest contributor to the market and is estimated to grow at a CAGR of 4.2% during the forecast period. Chocolate is broadly grouped by the amount of cocoa it contains. Milk chocolate, which contains 10% cocoa, accounts for more than 50% of all chocolate consumption. Dark chocolate contains more than 60% cocoa. Chocolate confectionery is an aggregation of boxed assortments, tablets, seasonal chocolate, countlines, alfajores, bagged soft lines, chocolate with toys, and others. Cocoa butter, milk, lecithin, and flavorings, such as vanillin, are some raw materials used in chocolate confections. The production procedure involves four steps, roasting, grinding, mixing/refining, and conching. Some of the critical elements which manufacturers focus on while processing chocolates include gloss retention, bloom stability, flavor, ideal viscosity, and cost. Dark chocolate contains antioxidants, which assist in preventing cardiac diseases, controlling blood pressure, and avoiding wrinkles. An increase in awareness regarding health benefits associated with certain chocolate types and the growth in popularity of chocolate confections in Asia-Pacific are the major factors that drive the chocolate segment across the globe.
Based on age group, the global confectionery market is classified into children, adults, and geriatric. The adult segment dominated the market and is estimated to exhibit a CAGR of 3.7% during the forecast period. The demand for sugar-free gum has gained greater significance in the industry, owing to health concerns over snacking calories and sugar consumption. Therefore, gum marketers are innovating fun and flavorful products and modernizing them with non-caloric sweeteners. In addition, the growing trend of veganism among adults demands using plant-based milk alternatives in their bakery confections. This includes using milk derived from oats, almonds, coconut, flax, cashew, and others. Manufacturers can consider this an opportunity to create lucrative growth prospects in the fine bakery wares segment.
By price point, the global confectionery market is distributed into the economy, mid-range, and luxury. The economy segment dominated the market and is anticipated to exhibit a CAGR of 3.7% during the forecast period. In most markets, value is a trending topic. For instance, in the U.S., roughly 79% of confectionery consumers look for an economic value when choosing chocolates. In countries with growing economies, the value factor plays a crucial role. According to research by the financial services provider Rabobank, a bar of chocolate (45 grams) accounted for less than 1% of the weekly shopping budget in western economies such as the U.K. and the U.S. Still; the same bar accounted for 18% of the weekly food allowance in India. Although disposable income is rising in developing and developed regions, many consumers still prefer the cheapest option. Therefore, most confectionery products cater to the large masses in the economy sector. Furthermore, confectionery products under this category are sold in distribution outlets, such as supermarkets/hypermarkets, as various options are available, generally with multiple purchase offers. These factors cumulatively have enabled to the creation of lucrative opportunities for the economy segment.
Depending on the distribution channel, the global confectionery market is segmented into supermarket/hypermarket, convenience stores, pharmaceutical & drug stores, food services, duty-free outlets, e-commerce, and others. The supermarket/hypermarket segment was the highest contributor to the market and is estimated to grow at a CAGR of 3.5% during the forecast period. The expansion of supermarket and hypermarket use in developed and developing economies is responsible for the segment's rise in the confectionery market. Additionally, the one-stop shopping experience offered by these retail formats makes it a very well-liked option for consumers. These retail formats are typically found in widely accessible locations and provide clients with a large variety of products at competitive prices. Customers can complete all of their shopping needs at these locations, thus saving them time and enhancing the appeal of this market.
Region-wise, the global confectionery market is studied across North America, Europe, Asia-Pacific, and LAMEA.
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Europe's highest revenue contributor is estimated to grow at a CAGR of 3.6%. Europe accounts for a significant share of the confectionery market. Countries such as the UK, Germany, France, Spain, and Italy, are the prominent contributors to the revenue of this region. The significant challenges faced by the German chocolate segment are the high cost of raw materials, the introduction of government regulations, and the increase in competitive pressure. Spanish confectionery manufacturers invest in research and innovation to introduce appealing products that offer customers unique experiences. New sugar substitutes and sugar-free products are emerging in European countries as consumers are concerned about the health effects of high sugar consumption. Added benefits, such as fortification with vitamins, the addition of natural extracts, dental health improvement, and breath freshening effects, offered by sugar confectioneries attract consumers in the region. In addition, innovation in textures, flavors, shapes, and pack sizes supplements the market growth. Private label products continue to hold importance in the European Union and are purchased by families in larger pack sizes, which cause harm to the sales of mid-priced brands.
Asia-Pacific is the second largest region. It is anticipated to reach a predicted value of USD 85 billion by 2031 at a significant CAGR of 4.7%. Product portfolio extensions and new brand launches from established players are significant factors driving the region's confectionery market. Key players in the region actively invest high amounts in advertising campaigns and marketing to enhance their brand recognition and influence the market. Companies such as Ferrero China Ltd. promote their products as appropriate gifts for weddings and personal gift-giving occasions. Additionally, manufacturers launch limited edition seasonal chocolate confections to capitalize on consumers' taste for winter-themed products. International brands overpower domestic brands in the region. Expanded investment by market players, increase in per capita disposable income, and rise in the overall consumption of confectionery products are the major drivers in the region.
North America is the third largest region. The North American confectionery market comprises the U.S., Canada, and Mexico. The U.S. is the leading manufacturer and consumer of confectioneries in North America. Canada and Mexico offer massive potential for confectioneries in the region. Chocolate and sugar are the leading confectionery segments in North America. Stagnation in the consumption volume of sugar confectionery is observed due to demographic changes such as an increase in the aging population and low population growth. Growth in health consciousness among customers and the introduction of new laws targeting the obesity problem in several countries, such as Mexico, hinder the growth of the sugar confectionery market in the region. In January 2014, the Mexican government imposed an 8% tax on food products containing over 257 calories per 100 grams. Growth of the chocolate segment in North America was bolstered due to new product launches and innovations. Boxed assortments, tablets, and bagged selflines/soft lines are the fastest-growing chocolate confectioneries in this region. An increase in demand for organic, premium chocolate, and sugar-free products are expected to provide potential growth for the confectionery market expansion.
The major companies in the global confectionery market include