ISM update
The ISM partner associations have released figures showing that while the German confectionery business shrank slightly from 9 to 8 per cent, there was nevertheless a 4 per cent increase in turnover across all areas.
Federation of German Retailers (HDE), the Association of German Grocery Wholesalers (VDN) and the Central Association of German Cooperation Groups (ZGV) research also shows, though that trade and industry will have to prepare themselves well for the coming years, because the turnover is relativised by increased raw materials and purchasing prices.
The trade has succeeded in increasing confectionery turnover in all product segments in late 2008. Satisfactory growth was seen in biscuits (+6 per cent), sugar confectionery (+3.3 per cent), chocolate (+5.4 per cent) and in snack items (+5.6 per cent). The growth achieved by the ice cream segment was even greater, however.
A glance at the individual sectors of the food trade reveals that the large supermarkets and the discount stores enjoyed better-than-average growth in the confectionery segment. Smaller companies in the food sector and companies that offer confectionery as a peripheral product were unable to keep pace with this growth.
Trends
Trends like the wellness boom of recent years or confectionery with added benefits have held their own and are now practically part of the standard product range.
This is having a corresponding effect on growth rates, and there has been no recurrence of the growth seen in the past. When looking at regional aspects, one can also see a trend emerging in the field of high-quality chocolate. For a while now, high-quality premium chocolates of small, regional chocolatiers with connected shops have been a star enjoying popularity among consumers. Business is also booming at the speciality chocolate stores that
concentrate on a limited assortment of high-quality chocolates.
Price development and competition
The past year was characterized by significant price increases with regard to purchasing. This was caused in turn by the higher costs of raw materials and energy on the industry side, and by the trade, which was forced to pass on these higher prices to its customers, even though this was not entirely possible because of the widely acknowledged intense competition. Whereas prices increased by about 6.8 per cent on the purchasing side, the price increases on the sales side were only 5.8 per cent.
Outlook
The oft-cited consumer confidence and willingness to spend have not yet faded. There also are some indications that 2009 need not necessarily end in a downward spiral: over the past ten years, turnover in the retail trade has mostly fluctuated in a narrow range of plus or minus 2 per cent around the base line.
To some extent, the trade has thus decoupled itself from the development of the overall economy in good times as well as bad. Many observers at the show thought the current situation could even result in an added positive effect for the confectionery business. According to these optimistic views, a difficult economic environment could generally have a positive effect on the confectionery business. The depressing mood in an economic crisis could lead the consumer to afford himself some small luxury again in the way of a reward. And what could be more appropriate than a good bar of chocolate, for example, or some ice cream for dessert.
Regardless of the particular segment, it remains to be seen what sort of mood consumers will actually be in. For the snacks segment, however, the lack of major sports events this year already suggests a decline in turnover. On the positive side, the price increases of last year will probably not recur in the year ahead, and prices can therefore be expected to remain constant for the most part.
