Brazilian confectionery market breaks R$10 billion mark

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BrasilNew research from Mintel reveals that the sugar and gum market in Brazil has, for the first time, broken the R$10 billion (€3.8bn) barrier. And it’s a sweet outlook for the future of the sector too, as Mintel forecasts market revenue to grow at a rate of 5% a year, annual growth peaking at 6% in 2014 and 2016, when the World Cup and Olympic Games will take place. Furthermore, by 2017 the market is set to reach a mouthwatering R$14bn (€5.3bn). While value sales continued to grow, volume levels have remained stable, at an average of 260 thousand tonnes a year from 2007 to 2011.

Jean Manuel Gonçalves da Silva, senior food analyst at Mintel, says, “Over the past five years, the confectionery market has shown fast revenue growth against stable growth for sales volume. Apart from raw material price increases, in sugar in particular, the market was also boosted by a better product offering. Higher quality and more expensive sugar confectionery and gum products have been developed – which, coupled with increased income from Brazilian consumers and a desire for innovation – have really boosted the market over this period.”

The demand for more sophisticated products has been catered for by both imported and products made in Brazil alike. The volume of importation grew 40% between 2007 and 2011, whilst in value, importation has nearly tripled over the same period of time, highlighting the shift towards more expensive products in Brazil.

The report also reveals that Brazilians are open to new flavours and products, especially consumers aged between 16 and 24 years old. Indeed, 76% of Brazilian consumers in this age group claim that they like to try new kinds of gum and sugar confectionery.

“The growth on raw materials has triggered innovation and reformulation in the sugar and gum category in Brazil. As a result of this, items with more flavour appeal have been developed in order to justify price increases – and there seems to be big demand among Brazilian consumers to purchase this new product development.” says Gonçalves.

The research also highlights how, on the whole, confectionery is more frequently consumed than gum. Some 40% of Brazilians tend to consume sugar confectionery at least once a week, while 30% consume gum with the same frequency. In addition, both sectors are consumed more frequently by younger consumers than older consumers, but this difference is much more pronounced in the gum segment than in the sugar confectionery sector. Chewing gum in particular struggles to maintain usage among older consumers. But it is not just the young who are particularly keen on gum, it seems that those consumers on higher income tend to have a particular penchant for chewing gum.

According to Mintel´s Global New Product Database (GNPD), new sugar confectionery and gum product launches in Brazil have grown nearly 40% from 2007 to 2011, while in the US, launches have dropped by nearly 50% in the same period of time.

“The popularity of new lines of sugar confectionery and chewing gum, either with new products or new varieties, means Brazil is an ideal market for confectionery NPD. There’s a constant move towards innovation in Brazil, indicating that success is related to ongoing development, where products are always focused on quality and responding to consumer demand”, says Gonçalves.

Health and wellness are high on the consumer agenda as, simultaneously, 64% of consumers say they prefer confectionery made with natural juices, highlighting another area ripe for more innovation. However, natural products currently represent just a small proportion of category launches, highlighting potential for more NPD in this area – as just 2% of new sugar confectionery launches in Brazil carried an ‘all natural product’ claim in 2011.

Source: Sweets and Snacks Europe