MARKET NEWS

Candy Industry Companies Must Provide Unique Innovations to Avoid Product Homogeneity Competition

Candy, also called sweets or lollipops, is a confection that features sugar as a principal ingredient. The category, called sugar confectionery, encompasses any sweet confection, including chocolate, chewing gum, and sugar candy. Vegetables, fruit, or nuts which have been glazed and coated with sugar are said to be candied. Candies can be divided into lollipops, gums and chocolate candies. Lollipops are a kind of confectionery that is very popular among the people. It was originally a hard candy inserted on a small stick, and later developed more delicious and fun varieties, not only loved by children, but also by some innocent adults. Lollipops are available in gel type and milk type. Gums is based on natural gums or glycerin resins. It is made by adding syrup, mint, sweeteners and so on. It is a kind of sugar that is very popular among people all over the world. It is both edible and playable, and is loved by children and young people. At the same time, it has become the new favorite of most of young people to dress cool and fashion. Chocolate candies are a type of candies made from cocoa bean products. Tan is lustrous, has a delicate and smooth taste, has a special fragrance, has a high calorific value, and is rich in nutritional value. It is easily digested and absorbed by the human body. In 2019, three types respectively covered a market share of 2.79%, 12.50% and 49.10%.

Offline candy retail stores refer to candy retail stores scattered in various geographical locations. Customers can easily get quality assurance from retail stores and can accurately purchase their favorite candies. The online candy store can help customers choose a more comprehensive range of candies and make their purchase more convenient. Since management costs will be lower than retail stores, the overall price may also be relatively low. In 2019, the market share of offline candy retail stores was 71.82%, and the market share of online candy stores was 28.18%. It can be seen that customers are more willing to patronize offline candy shops and choose candy with taste and quality.

Influence of COVID-19 Outbreak on Candy Industry Development

When the crisis began, the offline retail industry had already seen a sharp drop in sales and traffic. During the novel coronavirus crisis, these stores were closed for a long time. Because retailers in many countries close their doors for the safety of consumers and workers or to comply with government orders. These factors have led to a decline in sales in the candy market. During the COVID-19 period, the procurement of raw materials for confectionery has been a key challenge in view of strict shutdowns and import and export restrictions. The import of sweets is restricted, which will affect downstream consumption. Big brands have been working hard to meet demand, which has created new players in the market, so competitiveness will become more intense. Due to the continuous increase in household consumption, the realization of prices, and the recovery of sales in catering services and professional retail channels, sales of confectionery manufacturers may increase gradually. Although the impact of the COVID-19 control event on consumer participation in seasonal events and the resulting retail impact is uncertain.

Offline retail stores, which accounted for more than half of sales of the candy industry, were forced to close, and candy sales were completely interrupted. Although online retail stores were operating normally, logistics was delayed or suspended due to the epidemic, and shipments were not allowed in areas with severe epidemics. Although the demand was not reduced, the entire sales channel could not operate normally due to objective reasons, and the overall sales volume decreased. In 2020, the sales volume of the confectionery industry in North America, EMEA and Australia is expected to be 16,916 K Tons, showing a year-on-year decrease of 2.74%.

Increasing modernization and hectic combination of professional & personal obligations are some of the major factors triggering the demand for convenience snacks as part of daily diet. The busy life of consumers disallows them to spend time on cooking and dine-out during their working hours, which leads consumers to look for easy and quick to eat food products. The number of consumers in the workplace is increasing nowadays and it is becoming even harder to maintain a healthy work-life balance for them. Thus, manufacturers and marketers are intensively capitalizing to introduce and promote a range of chocolate snacks such as on-the-go snacks, chocolate bar, and others to offer healthy diet to consumers. They are also focusing on offerings of convenient and small packs that allow consumers to carry candies and bars in their bags. Chocolate is one of the most consumed products across the world and is associated with numerous health benefits. For example, it is a rich source of antioxidants which improves insulin sensitivity and reduces blood pressure. Hence, rising association of chocolates with youngsters and other working population across the world is expected to propel the market growth during the forecast period. The large consumption of chocolate and candies in North America has promoted the development of the global confectionery market. Because of their increased taste preferences and relaxed eating habits, consumers demand high-quality and high-quality chocolate more than standard confectionery products. The combination of work life, health concerns, and personal needs among consumers are some of the main factors, which are gradually becoming the driving force for them to consume candy in their daily consumption.

Meanwhile, sugar may affect health has hindered the candy market development. Because candies contain a lot of sugar, they are directly related to diabetes and obesity. Increasing attention to related diseases is forcing consumers to change their lifestyles and reduce sugar intake. High sugar content can cause serious health problems and is a major concern for consumers, which has prompted confectionery manufacturers to reduce sugar content or use sugar substitutes and natural sweeteners in their products. Therefore, this limits the development of confectionery companies to a certain extent. What is more, primary raw materials utilized in confectionery production are cocoa and sugar. Cocoa prices are volatile and can be influenced by a series of factors, including extreme weather, political instability, and pests & disease. In addition, rise in supply demand gap in chocolate industry has accelerated the prices of cocoa beans. Sugar prices increased due to less production and more demand. This is also a weakness of the candy market.

To break out the development limitations, candy makers must invest in R&D of products in order to provide unique innovations. The functional candy or super candy is also gaining popularity across the globe. It is enriched with supplements with extra nutrients like vitamins, minerals, calcium, turmeric, etc., candy provides the best solution for both quelling of sweet craving and added health benefits. Green tea chocolates, wasabi marshmallows, pickle candies, kiwi and celery gummies, energy chews are just a few names in the list of candies, which satiate adventurous taste buds of consumers. This will bring more new opportunities to the candy market. The competition of many candy companies mainly stays at the price level, and the development of new fields is obviously not enough compared with foreign investment. The phenomenon of product homogeneity has seriously hindered the competition between confectionery companies and big brands, making their profits far less than those of big brands. Small and new companies entering the candy market have no advantage in competing with major retailers and other candy stores that have been in business for a long time. Trying to enter the business will mean that the candy manufacturing company must stand out from the competition-a healthy range of choices, specialty products (produced in-house).