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Challenges faced by confectionery manufacturers based on market trends
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Thursday, 17 December, 2020, 08 : 00 AM [IST]
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Dheeraj Talreja
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The Global Confectionery Market size was valued at a whopping $184,056 million back in 2015, and it is expected to reach $232,085 million by 2022, supported by a CAGR of 3.4 per cent during the forecast period 2016-2022. With such huge potential comes intense competition, and the confectionery industry is bursting at its seams with manufacturers and confectioners constantly creating new products based on changing consumer preferences and market trends.
Over the past few years, makers of candies and chocolates have witnessed a sharp paradigm shift in people’s tastes and choices. This can obviously be attributed to an increase in the number of well-travelled and affluent consumers who are now looking for flavour innovations in confectionery as opposed to the traditional and standard fare of Indian sweets. Chocolate confectioners have thus been experimenting with a mix of different ingredients that are both eclectic and unorthodox in order to cater to this growing niche clientele.
An example of this would be the growing trend of incorporating condiment and spice flavours such as cinnamon, ginger, and chilly into chocolate. Apart from flavour, confectioners also have to be mindful of the health trends surrounding dark chocolate and vegan chocolate. An increasing number of social media influencers and dieticians suggest consumption of dark chocolate rather than traditional Indian sweets that are very often loaded with high fat and sugar content.
Chocolate is considered an indulgence in regulation
Raw material availability
Chocolate confectionery manufacturers and retailers continue to face multiple challenges. Along with the increases in the price of raw materials, they also encounter a challenge of sourcing cocoa beans. For the bean to bar makers, sustainable supply of cocoa beans is a challenge. For the others, sourcing of bulk chocolates is a continuous struggle. The other ingredients used as inclusions in chocolates are also sourced very carefully and chocolatiers are always in the lookout for newer ingredients.
Health awareness
It is no secret that new-age consumers are health-conscious and their food choices are dictated by organic food trends. Hence, traditional chocolates and sweets today face brutal competition from other health foods such as nuts, oats, granola bars and other mildly sweetened products that pander to audiences looking for healthy dessert alternatives.
These products are here to stay and will make it difficult for the chocolate market to rapidly expand unless it taps into global and local health trends. According to a report released by the National Confectioners Association, millennials are likely to change purchasing patterns for chocolates by choosing small-batch products with unique flavours and textures, and high-quality ingredients. Long-standing brands are now attuned to these trends and are investing in research and development to remain relevant to today’s consumer.
Demand for Value-added Foods
In conjunction to the health trend, there has also been an increase in demand for value-added foods and beverages such as products fortified with vitamins, minerals and protein. Manufacturers are thus looking for new ways to fortify their products in viable ways without incurring exorbitant costs or adding ingredients that consumers may not recognize as natural or healthy. Probiotic yogurts, Vitamin D fortified milk etc., are very good examples of such products.
Pacing the right Innovation
Bringing new products in the market that align with emerging consumer trends in a timely manner is sometimes difficult for many confectioners as the process of creating new and relevant products, and moving them through the various stages of research and development, testing and marketing and retail takes a lot of time. By the time some of these products hit store shelves, trends might have abated or changed and there might be a flood of competition from other smaller and more agile companies.
However, during the lockdown phase many confectionery brands in India considered this is a golden opportunity to launch products for consumers sitting at home and providing them with comfort food and most manufactures kept up the pace with innovation.
Low shelf life for gluten-free products
The demand for Gluten-free foods has been on the rise and it is almost imperative for a confectionery company to have a gluten-free range of products. However, making gluten-free products comes with its own set of challenges because the lack of wheat flour and gluten significantly reduces the moisture retention capacity of a product, giving it a very low post-baking shelf life.
Most gluten-free products need to be consumed within 48 hours of baking or be kept under proper refrigeration and can be used for a maximum of 3 to 4 days only. With unpredictable consumption patterns, it can thus be an expensive affair for confectioners to offer a range of different gluten-free products.
Manufacturing and Regulatory challenges
During the lockdown, confectionery was treated as an ‘indulgent’ and not considered into essential items. This led to an imbalance in demand and supply. Chocolate might not be an essential item, but it is a source of indulgence and comfort that consumers look for in times of uncertainty.
Confectionery has always been a dynamic field brimming with innovations and new products. However, confectioners today face a host of challenges because of constantly changing food consumption patterns and lifestyle trends. And in order to keep up, food manufacturers and confectioners are going to have to adapt to these changes in preferences by merging health with taste.
(The author is president-India, AAK Group)
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