Sweets are not afraid of the crisis
In recent years, the market of sweets – both as a whole and its particular categories individually – has recorded a successive increase, which only slightly slowed down as a result of the economic crisis. Although the leading position still belongs to chocolate products, non-chocolate products are growing in strength and win an increasingly higher market share in terms of both value and volume of sales.
SWEETS WITHOUT CHOCOLATE
The development of the market of sweets without chocolate is conditioned to a large extent by global trends connected with the increasing pace of life and growing expectations. Each category of sweets without chocolate, among others candies, caramel drops, lollipops, cookies, wafers, jellies and marshmallows, has its own loyal consumers.
Based on the conducted research studies, sweets consumption in Poland is significantly lower than in the “old” member states of the European Union. Observers and analysts of the sweets market in Poland agree that even in the situation of an economic crisis, the market has a lot of potential. For several dozens of years, sweets in Poland were mainly associated with an occasional product, which meant that the currently booming category of the so-called impulse sweets was limited to an absolute minimum. The position of non-chocolate products was also weaker and only in recent two decades they have successively gained recognition and liking of consumers, rivalling with chocolate, which had been a synonym of sweetness in Poland for many years. However, the Polish society is becoming richer and spends money more consciously.
Individual categories of the non-chocolate sweet products are characterised by fierce competition among producers, which results in systematic expansion of already existing product ranges and providing consumers with innovative products. This peculiar race between producers is intensified by the fact that Polish consumers are increasingly less conservative in their choices, in particular concerning impulse products, i.e. most of the sweets. Especially small consumers and young people are willing to reach for new products – both in terms of flavours as well as shapes and packaging.
It is hard to explicitly assess which segment of non-chocolate sweets has the biggest potential. An average Pole consumes relatively less sweets than the people from Western Europe; therefore, producers are given numerous opportunities for development. However, careful observation of consumers’ expectations is the main condition that allows for exploiting such opportunities.
Candies, caramel drops and lollipops
When analysing the Polish market of candies (hard candies, dissolving chewing gum, jellies and marshmallows), it is necessary to state that the pace of development has moderately slowed down recently, but the market continues growing dynamically. The category of candies and lollipops grew in the period from October 2008 to September 2009 by 4.6% in terms of value as compared to the previous year (data prepared by The Nielsen Company) and amounted to EUR 249.3 million. The driving force of the entire market is the segment of candies for children, in which the most important and constantly developing categories are jellies and marshmallows – in terms of value, these segments grew by 18.3% as compared to the previous year (source: The Nielsen Company, MAT AM 09 vs 08).
According to the data made available by The Nielsen Company, it turns out that jellies lead in terms of both value and volume winning 22.1% and 26.8% market shares respectively. It is also visible that such products as dissolving chewing gum are very popular among consumers – a total amount of EUR 56 million was spent on these products, which meant a 22.6% share. Candies were ranked third with a market share of 21.3%. It is also confirmed that the segment of soft candies is characterised by increasing dynamics of development as compared to other groups of products.
According to producers, relatively young products on the Polish market have the biggest potential. Such products include among others soft candies characterised by a less traditional design – similarly to hard candies – which allows for increased flexibility of a product offer and for the ongoing adjustment of products to current market trends.
According to Marek Malinowski, Commercial Director and Member of Management Board at ZPC Mieszko S.A., the sale results in terms of value show that good quality gelatine products, packed and characterised by exceptional flavour and pro-healthy values (including juice) are the most popular products among consumers. Within this segment, it is possible to observe two main tendencies. The first one ensures sale of traditional products that meet the needs of consumers, i.e. fruit jellies (gummy bears). The second trend encourages jellies enthusiasts to reach for new products, e.g. characterised by new shapes or forms. “Increasing expectations of consumers determine producers to introduce innovative and creative solutions” – says Marek Malinowski.
Jellies and marshmallows are already very popular among both children and their parents, who very often decide to buy them for themselves. The success of this type of “soft sweets” will still remain on a high level, mainly because of the fact that adults approach jellies with more understanding than in the case of other sweets. These products are often enriched with natural fruit juice and vitamins. Thereby, they somehow match the tendency of healthy nutrition, which dominates on the market nowadays. They have soft and delicate consistency, and are not hard to chew, which is extremely important in the case of the youngest consumers. Additionally, they attract the attention with their unique shapes, colours and filling, which surprise consumers more often.
“Admittedly, fruity flavours still dominate in the category of jellies, but consumers are more willing to reach for products in other flavours, e.g. Cola. Such products were introduced to the offer of Jutrzenka’s Mi¶ki” – says Anna Gorzan, Marketing Director at Jutrzenka – Colian Sp. z o.o.
The segment of caramel drops records constant increase on the market of non-chocolate sweets. According to The Nielsen Company, the dynamics for the period April – May 2009, as compared to the same period in the previous year, amounted to +4.5%, whereas hard caramel drops still recorded the highest value of sales. The market of these goods is clearly polarised and divided between traditional and modern products addressed mainly to younger consumers who seek non-standard solutions.
According to Anna Gorzan, Jutrzenka’s offer in the segment of hard candies mainly comprises products addressed to a consumer with traditional preferences, who looks for and appreciates high quality over time. Jutrzenka is in charge of such commonly recognisable brands as Minties and Brando, which are positively perceived and enjoyed by Polish consumers. The company’s offer also includes such traditional products as Kukułki and Krówki, which expand beyond the segment of caramel drops, but are also candies. “We prepare our offer bearing consumers’ comfort in mind; therefore, we have products both in convenient bags as well as loose” – says Anna Gorzan.
The Poles often reach for such products as dissolving chewing gum, lollipops or fudge. “Polish fudge is appreciated in Hungary, lollipops are popular among citizens of the Czech Republic, whereas the Poles for many years have preferred the chewy type fudge with a teardrop in the middle or the crispy type” – says Krzysztof Mazurek, Marketing Director at Dagny Sp. z o.o. – “The market of fudge and lollipops develops in a stable way determined by a tendency of looking for products made of natural ingredients.”
Cookies, family wafers, impulse wafers and gingerbread
The category of cookies without chocolate and wafers are characterised by high indicators of both quantitative and qualitative increase of sale and popularity among consumers, mainly as a result of price increase.
According to The Nielsen Company, the value of the cookies market, which includes among others biscuits, cookies with cream filling, impulse and family wafers, sponge cakes, gingerbread or mixtures, totalled nearly EUR 381 million in one year up to September 2009, i.e. by almost 8.6% more than the year before. Lack of supervision over the cookies sold by weight at such places as marketplaces or bazaars is a significant problem connected with precise determination of the cookies market’s size. Despite a noticeable tendency for abandoning products sold loose, consumers – in particular from smaller towns – are still very willing to purchase them in this way. The share of products sold loose is estimated fairly precisely and totals approximately 50% of the total market of cookies.
Biscuits, with a 37.3% share, are ranked in the first position in terms of sales value, according to The Nielsen Company. In the examined period, family wafers were the second most valuable segment of the market with a share of 18.7%. Besides traditional cookies and wafers, consumers often reach for other products. Sponge cakes with jelly had a market share of some 14.7%. Based on the collected data, Polish citizens often reach for biscuits with cream filling and gingerbread, whose percentage share in the market in terms of sales value amounted to 10.4 and 7.5 respectively.
Anna Gorzan from Jutrzenka underlines that the forecasts show the same increase of cookies and wafers sale in 2009. “Moreover, for several years, we have been observing two types of trends on the market in relation to cookies and wafers packaging. On the one hand, packages below 60 g are gaining in popularity.
Consumers live in a constant hurry and often have a bite “along the way”.
On the other hand, they often decide to purchase large packages of cookies and wafers with weight exceeding 400 g, e.g. during larger weekly shopping. Jutrzenka – Colian takes consumers’ needs into account and differentiates its portfolio according to the trends and tendencies observed on the market” – adds Anna Gorzan.
Wafers are the most popular snack of the youngest generation of Poles. Usually, these products are purchased on an impulse depending, to a large extent, on proper exhibition on store shelves. However, a decreasing number of impulse wafer consumers are noticeable as they turn to the segment of candy bars.
It turns out that Poles most often purchase products from this group in modern commercial centres. Based on the data gathered and analysed by The Nielsen Company these products are most often bought in supermarkets with a 43% value share. We also do sweet shopping in average-size grocer’s stores (18.7%) and hypermarkets (13.8%).
Further sales growth
In a pursue for higher standards of development and level of life, we can expect the market of sweets without chocolate to continue growing. Certain segments are likely to become more important at the expense of other products. The forms of serving or methods of packing are probably going to change. In the case of jellies, marshmallows, lollipops or wafers and cookies, the growth of these categories is not likely to stop. According to experts, the Polish market will record a diverse and constant growth in the perspective of several consecutive years.
Based on the opinion expressed by a representative of Mieszko, jellies will still remain the most dynamically growing segment on the Polish market of sweets without chocolate. It applies to both the traditional, fruity gummy bears, as well as the more innovative products characterised by interesting shapes, colours, filling and methods of packing.
Meanwhile, Krzysztof Mazurek from Dagny, has a different opinion and claims that the market of jellies has already been saturated and overproduction is clearly visible. The future will belong to “natural” and ”organic” sweets. Despite higher prices, the dynamics of this segment’s growth will be higher as the number of wise and conscious consumers is growing all the time.
Regardless of the fact whether the market is about to grow or shrink, in the nearest future, we should expect new products launched by producers. The innovative products will be based on natural ingredients, enriched with vitamins and minerals, as well as characterised by reduced content of fat and calories. Additionally, the increasing care for the balanced development of the youngest will mean introducing new versions of products with added value.
Products in traditional shapes and flavours will still be most popular among consumers. However, on the quickly changing market, producers will look for a place in new and innovative categories, which are a challenge for the future.
