Upturn in Germany’s confectionery sector hindered by ongoing major sector challenges
Chocolate Shop. Woman Buying Chocolate Sweets In Store
The latest assessment by German trade body BDSI on the nation’s confectionery sector showing a slight increase in sales against an array of business challenges is undoubtedly to be cautiously welcomed as a barometer for wider market conditions.
However, while there may have been a slight uptick in performance, the organisation has raised some serious questions over ongoing challenges that show no immediate sign of lifting any time soon.
For starters, the pandemic itself has continued to impact notably on all spheres of industry, with the confectionery and snacks segments being far from immune to the chaos it has left in its wake. Germany is a case in point on this, with the country experiencing yet another wave of the virus, with more than 100,000 infections presently registered daily, with a peak not expected until well into February.
Consequently, the fact that ISM and ProSweets are happening at all in light of the worsening situation there is quite something, though as with the UK, governments have placed a strong emphasis on trying to enable economic activity to continue at critical junctures. It’s clearly a very difficult balance to strike in terms of the needs for delivering public safety, and creating business continuity.
Beyond the pandemic, as the BDSI notes, major issues with logistics chains (largely export, but also domestic deliveries), have also been hit over the past two years, and this isn’t going away as a key topic. Nor is the ongoing shortage in skilled workers serving the sector, with the pandemic negatively impacting in that respect.
Perhaps just as crucially, the price of raw ingredients has increased notably in core areas of food shopping, affecting a lot of confectionery and sweet baked goods ranges. This in itself is a major deal, with consumers rightly worried by increases in their weekly food baskets, so the prospect of paying more for our confectionery is a very real one indeed.
As far as that factor is concerned, actually paying more for chocolate in particular, is seen by at least some industry observers as being a very good thing indeed – provided that those increases reach those living in key agricultural sectors serving the industry. But if price hikes simply occur to absorb additional handling costs, then the serious threat to the long-term sustainability of the industry remains present.
These are certainly challenging times we are living through, so we can only hope that some of these core matters facing our combined industries will work themselves out as economies gradually begin to recover from the pandemic through this year and into next.
Neill Barston, editor, Confectionery Production
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