Italian confectionery market optimism despite economic challenges

Being home to some of the most renowned confectionery names in the industry has meant Italy has cherished its position among market leaders. Neill Barston reports on 2018’s progress.

Despite a backdrop of wider economic uncertainty, Italy’s sweets and bakery markets have shown encouraging signs of momentum, particularly on the equipment development side of the sector.

The buoyancy of the machinery segment was apparent as Confectionery Production visited this year’s IPACK-IMA in Milan, at which an array of new packaging technology relevant for confectionery was unveiled.

Similarly, from factory tours to the region with the likes of GSR Cocoa Machinery and Carle and Montanari-OPM over the past 18 months, there appears a sense of resilience and determination from many operating within the equipment field serving the confectionery and bakery sectors.

However, this was contrasted by latest Euromonitor International figures showing there was a decline in Italy’s chocolate confectionery market of one per cent for 2017, valued at €1.9 billion and 112,000 tonnes.

The country has traditionally been strongly associated with the quality of its pralines and tablet bars, as well as artisan crafted confectionery being one of its star performers.

According to the global research group, the slight dip in sales has in part been down to consumers being increasingly conscious of healthy eating options.
However, some of the biggest brands in the sector, including Ferrero, Perfetti Van Melle, Nestle and Lindt & Sprüngli, have all expressed optimism on their respective performances that have seen a number of product launches.

As Euromonitor added, Italian consumers increasingly look for premium ingredients in their food, resulting in large grocery retailers increasing the number of locally sourced products, as well as premium brands that are recognised by consumers. Other key characteristics that consumers look for in chocolate are ethical sourcing of cocoa beans, and artisanal production is also considered a plus.

Single origin cocoa is, says the organisation, identified by consumers as a sign of premium quality. However, the higher price point for this type of product reduces purchases in terms of volume.

Products made in Italy, or brands with a historical heritage like Perugina also tend to be preferred by consumers looking for products they consider Italian.

Market progress

As far as finished product performance goes, Euromonitor results found Ferrero led chocolate confectionery with a 34% value share during the past year.
The company, which has enjoyed strong fortunes with its Kinder brand, had made a concerted effort to underline the heritage of the business, as well as opportunities to make improvements on ethical supply chains.

Consequently, the firm’s turnover stood at €10.5 billion for 2017, up 1.5 per cent over the previous year, with overall sales up by a total of 2.2 per cent.
The company was followed by Nestlé Italiana, which has continued to invest in new Italian plans and promoting its global share of the sector, with 15 per cent of market share, while Lindt & Sprüngli managed 12 per cent of the segment.

Other notable players in the Italian market include Loacker, Elah-Dufour-Novi and ICAM, that have helped add to the diversity of the region’s confectionery sector.
For its part, Italian-Dutch firm Perfetti Van Melle holds around 90 per cent share of the chewing gum market, and a reported figure for over 50 market share for the impulse candy segment.

A spokesperson said: “Both chewing gum and candy categories have seen a decline over the last few years as a consequence of a number of factors, in particular, the sluggish domestic economic situation, reduced interest from consumers in these categories, and growing concerns around sugar and processed food.
“PVM is facing these challenges using different levers. This includes being innovative, which is key to our business and we have launched products that aim to be relevant to our consumers, satisfying more functional and well-being needs. In the chewing gum category, we have extended the range of our key oral care gum brand, Daygum, to include an effective whitening and protection product. Our recently launched Daygum White&Care is the first chewing gum to combine oral care protection and whitening effect.”

The spokesperson added that the business had also responded to consumer demands for healthier options with many of its ranges being sugar free.
In addition, the company has also developed what it believes is the first chewing gum sweetened with stevia, Vigorsol Easy, a natural sweetener, together with natural colours and flavourings. This next-generation gum contains natural mint flavourings and matcha green tea.
As part of its Fruittella brand, the group has recently launched the new Veggy Am!c! range of jellies that do not contain ingredients sourced from animals.

Packaging success

One area of particular success for the Italian market has been in its packaging equipment segment.
This was demonstrated at the recent IPACK-IMA, which witnessed key equipment being unveiled. Among the notable solutions were machinery ranges from Cavanna, Carle & Montanari-OPM.

Furthermore, the CAMA group explained that it had placed a determined focus on delivering industry 4.0 solution harnessing computer-driven efficiency improvement measures with its latest series of equipment.

According to Ucima, the Italian packaging manufacturing association, the domestic market also continued its strong performance, with 14.4 percent growth to more than €1.5 billion for the past year. Export sales were €7.19 billion, up 7.5 per cent over 2016.

“The volatility of markets and constant changes in the geopolitical conditions in a number of regions make it increasingly difficult to make reliable forecasts,” says Ucima chairman Enrico Aureli.

“On balance however, we expect last year’s growth trend to be maintained. According to the Ucima research department’s forecasts, the industry will continue its strong performance in Italy and Europe. Sales are also expected improve in Asia andAfrica with growth of between six percent and 6.5 per cent in the two-year period 2018-2020,” continues Aureli.

While wider economic challenges remain, the country’s confectionery market has exhibited positive developments across its machinery development and finished product market segments that have led to projects of a return to growth moving towards the next financial year

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