UK confectionery market steels itself for continued challenging conditions
Amid a pandemic, projected recession and post Brexit complications, the UK confectionery market is facing notably uncertain times, but there are still some glimmers of hope amid the challenges that clearly lie ahead, reports Neill Barston
There’s little getting away from the fact that events of the past year amid the ongoing coronavirus pandemic have created a considerable level of global business uncertainty.
The UK confectionery, snacks and bakery markets are clearly no exception to that pattern, as the sector gamely attempts to grapple with the impact of covid-19 upon logistics and overall production operations, which have been stretched considerably.
There has been a decidedly mixed picture that has been hard to interpret within the market – on the one hand, snacking intake has increased as shoppers have been more housebound amid the pandemic. This proposition was supported by Mondelez International’s latest State of Snacking report, which found that 48% of people across the world had indeed seen their level of indulgent treats increase.
This should have been good news for manufacturers. However, on the flip side, figures from the Food and Drink Federation (FDF) recently revealed exports of confectionery and other items actually fell during the first half of the year. According to its figures, results were down by 13.8% as a whole, to a sum of £9.7 billion for the period.
This translated into export sales for chocolate, which is considered the second highest performing UK product behind whisky, reducing 10.7% to £307 million for the first half of the year, and the picture is seemingly not looking much rosier going forward, as complications continue surrounding the end of the Brexit transition period.
While an 11th hour deal was in fact secured right at the end of last month, the promise of ‘frictionless trade’ between the UK and the EU does not, on early inspection at least, seem to be matching that vision by a considerable margin, with heightened border paperwork and logistics issues with a newly installed UK border facility in Kent, resulting in considerable lorry tailbacks in its first few weeks of operating, which show little sign of improving.
Perhaps equally as worrying is the fact while the prospect of additional tariffs being imposed on goods seems to have largely been avoided, there may well be additional transport costs involved for British and EU enterprises, which the Food and Drink Federation has consistently offered warnings over.
Despite such concerns, independent manufacturers have reported some notable successes in recent months with new product launches.
Among them were developments in the fast-rising plant-based market for the segment. One such launch this autumn was the HiP brand, from James Cadbury (below), which has had a strong response. He explained: “The launch of HiP and our new oat milk chocolate bars will stretch the confectionery category, driving increased excitement and engagement. “I believe these innovative, first to-market products will deliver great-tasting oat milk chocolate to younger consumers who are looking for compelling dairy-free and vegan alternatives.”
Similarly with the vegan and dairy free market, Kent’s Plamil Foods reports a good deal of resilience in spite of conditions (see our chocolate feature in this edition), with the company expanding its production to meet growing consumer demand. Elsewhere, within the traditional sweet market, there’s been a sense of determined spirit from manufacturers that have refused to be beaten by tough conditions.
Adrian Simpkin, director of Sheffield-based travel sweets business A L Simpkin & Co, revealed it has been a case of digging in amid testing times. He said: “Upon my return from being locked down in the Philippines earlier this year, I flew into Manchester the day lockdown in the UK was announced. I looked at orders slowly being cancelled or pushed back on my phone. I suppose it’s not ideal to be making the original travel sweets when the global travel retail market shuts up shop.
“But after speaking with my sister Karen, we decided to carry on. We slimmed down production and forged on, and within days we had a steady, consistent stream of orders from our supportive customers at home and abroad. I firmly believe that this experience has greatly helped our company in looking forward to a fresh start in 2021,” he added, noting the experience of the past few months has been beneficial in adapting the business to changed market conditions.
In terms of equipment manufacturing, there have certainly been challenges within the UK in terms of the pandemic’s impact on staffing of businesses, with many companies working on adapted shift patterns as conditions have continued to worsen across Britain, which has led to the third national lockdown this month.
However, there have been some bright spots along the way for some, as Loynds Confectionery machinery (John Loynds pictured below) explained recently to Confectionery Production, which explained that it had in fact seen a greater number of international customers filtering in its direction this past year.
Richard Loynds, a director of the business, said: “Covid has been challenging particularly as it has disrupted our ability to travel which has been a major part of the business both installing and maintaining equipment onsite around the world.
Additionally, we work with a number of suppliers in China who build base machines for us. We have had to rethink how this works moving forwards.
“We are making use of new technology to help solve both of these issues. We now have a dedicated inspection app we are using with our suppliers for doing inspections remotely. Additionally we are using augmented reality technology to help with maintenance and installation of machinery with our customers.”
Clearly, businesses are becoming more creative in developing solutions to work around such testing conditions, which is a trend that will need to continue as Britain enters a further challenging year that has seen forecasts of recession amid the economic fallout of the pandemic.