Industry trends

The UK chocolate and confectionery production industry is in the mature phase of its life cycle, according to a report published by business information provider IBISWorld in July.

In this context, the industry is broken down into two subclasses: cocoa product production and sugar confectionery manufacture. Most of the cocoa product segment is made up of chocolate, but it also includes cocoa butter, cocoa fat and cocoa oil. The sugar confectionery segment covers the manufacture of chewing gum, caramel, nougat, lozenges, toffee and fondant.

The value that the industry adds to the economy is expected to decrease. However, the report indicates that although the industry is struggling against volatility and the recession, its performance should stabilise with time. We are also seeing that although some larger chocolate and confectionery manufacturers are moving production abroad to cut costs or optimise their supply chain, small high quality producers are coming into the industry.

The report goes on to describe Britons as being among the most enthusiastic eaters of chocolate and confectionery products in the European Union. However, constrained economic conditions and fluctuations in the prices of key inputs mean the industry has not had the smooth ride one might expect over the past five years, it says. Part of the problem is that industry revenue was artificially inflated at the start of the period due to high food prices. The shift of production capacity to continental Europe and a subsequent fall in cocoa prices are cited as being largely to blame for industry revenue shrinking. However, high cocoa prices and strong demand for premium products is anticipated to help revenue increase during 2015-2016.

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Confectionery Production