Report: Key confectionery trends in Asia

Retail volume sales of confectionery in Asia grew by 5.7% in 2007, which represented a 0.4 percentage point increase on the previous year and is in line with the strong performance seen in preceding years, reports Euromonitor International.

Meanwhile, confectionery retail volume sales grew at an average rate of 5.2% over the 1998-2007 period.

Confectionery is registering strong growth in emerging markets, particularly in countries like India, China and Indonesia, where retail volume sales grew by 10%, 7% and 9% respectively in 2007.

In contrast, growth in countries with higher per capita consumption was close to stagnant given their relative market maturity. Examples include Japan, South Korea and Taiwan, where retail volume sales grew by just 1%, 0.6% and 1.3% respectively in 2007.

Emerging countries are seeing strong growth of chocolate confectionery, sugar-free gum and functional gum, albeit from a very low consumer base.

Growth of chocolate confectionery in countries like India and China is mainly being driven by the growing number of middle-class consumers in urban areas.

Sustained economic growth in these countries is making chocolate more affordable to mainstream consumers for the first time.

Moreover, premium local brands like Le Conté (Shenzhen Co Ltd) are performing particularly well in China, since they offer sophistication and higher quality than standard chocolate offerings, but are priced more competitively than leading international brands such as Ferrero and Lindt.

Meanwhile, in India manufacturers have invested heavily in promoting chocolate as a gift through advertising campaigns such as Cadbury's “Kuch Meetha Ho Jaye” - or “Let's Have Something Sweet” – campaign starring the Indian film star Amitabh Bachchan.

This campaign, launched in 2007, helps to promote the culture of gifting chocolate confectionery during the festive season, especially Diwali, and on other special occasions such as St Valentine's Day and Mother's Day.

In developed markets such as Japan, manufacturers have managed to maintain positive growth for chocolate confectionery by stepping up advertising on the benefits of dark chocolate to heart health due to its high polyphenol content.

Building on the health craze for chocolate confectionery, manufacturers are making chocolate products in Japan even healthier. A popular ingredient in 2006 and 2007 was Gamma-Amino Butyric Acid, also commonly known as GABA.

This amino acid is known to help consumers relax. It has become a popular ingredient to add to alcoholic drinks in Japan. Given the fast-paced and stressful lifestyles in Japan, many consumers are drawn to products that contain such ingredients.

Demand for sugar confectionery in developed markets is largely stagnant. In Japan, retail volume sales increased by a mere 0.5% in 2007.

Maturing consumer demand, a declining birth rate and the increasingly negative consumer perception of sugar confectionery on oral health are the main factors behind this lacklustre performance.

As consumers become more health-conscious they are increasingly selective in their product choices, with a tendency to favour healthier variants, or at least products that are less harmful to health.

Japanese manufacturers are reacting by increasingly aiming their products at young and fashionable consumers, who are willing to try new products.