Estimated to reach a market value of $183 million by 2015 – the global confectionery sector is growing.
In fact, the industry grew by 3.2% between 2007 and 2011 and is forecasted to grow by a further 3% to 2016.
Analysing it further, the market is widely diverse and very competitive, featuring an abundance of industry players, small to large. Favourite products differ between countries, but confectionary is extremely successful in Asia and Europe. Europeans are known for their fondness for chocolate, especially France and Germany – although Malaysia is experiencing a chocolate upsurge.
Confectioners are known for always innovating to meet the needs of consumers – nowadays people have less time to shop and cook, leading to confection in the ready-to-eat sector soaring as manufacturers offer products for both between and as a substitute for meals.
Confectionery is dogged by attitudes that its products are always unhealthy, so producers have experimented with low calorie and low fat options, and products often include vitamin-rich ingredients like fruits and nuts. Consumers are increasingly interested in organic products.
There are a number of leading players in the global confectionary market, from PepsiCo to Nestlé, however many smaller companies are gaining larger reach. It helps that most confectionary is easily transportable with a long shelf life.
The UK confectionery market is still growing and is forecasted to increase from an average of 8.7Kg per person in 2012 to reach 9.4Kg by 2017. Chocolate is the largest sector, followed by sugar-based products. Economic issues in the UK and many other countries has raised demand, but as this is already a huge market, manufacturers are leaning towards developing variations of existing products.
Interestingly, Gum is growing faster than other confectionery categories – fuelled by its expansion into the health category with fortified sugar-free brands providing additional benefits like teeth whitening and breath.
Confectionary is a good fit for franchise. It is a fast-moving consumer goods business benefitting from a strong brand image as well as being very easy to run. Confectionery franchises suit owners who love retail with an eye for product design, especially if they can promote the health benefits of what they are selling.
Confectionery is a franchise model offering a diverse range of opportunities, as it can cater to wholesale clients or direct to customer, both down the road to in countries thousands of miles away. It is also a business that can – and must – adapt to changes in customer habits. With customers now moving towards increased snacking and away from three rigid meals a day – confectionery works by perfectly supplementing busier working and social lives.
Franchises like Snack in the Box have capitalised on this demand. A widely successful vending business that has partnered with Mars, it provides confectionery vending solutions to workplaces. Snack in the Box capitalises on the fact that two thirds of UK confectionery is now eaten between meals outside of the home and it is now offering new franchise territories.
Franchisees getting into confectionery should also consider trends in the content of their products. For example, Stevia - the sugar alternative earlier mentioned - is not widely available in Europe as elsewhere - as it was only EU approved in 2011.
An American franchise now doing well on a global scale is Auntie Annie’s - the world’s largest soft pretzel chain. It has a successful business model offering sweet and savoury take-away products and is currently seeing continued store growth across the UK and 22 other international territories.
Those wanting to work under an established brand should look to confectionary, where big names frequently offer franchise deals. The ice cream sector is very successful at present, with Ben & Jerry’s looking for new opportunities in many global locations.
But perhaps the greatest value of confectionary franchising is in its depth of coverage – a franchise owner can run their own sweet shop, sell handmade designer chocolates or even supply shopping malls selling a variety of self-serve products like those run by Street Corner.