Suzanne Callander explores some of the key confectionery trends that are affecting the sector today, highlighting the importance of innovating when it comes to product development in order to catch the attention of consumers.
It seems that the confectionery industry has been hit by a perfect storm comprising an ongoing cost-of-living crisis, supply chain issues, and a need for greater sustainability due to climate change concerns, along with ever more rapidly changing consumer demands. This has required confectioners to move with the times and shake up their product offerings. The good news is that, revenue in the confectionery segment amounted to US$1.11tn in 2023 with the market expected to grow annually by 4.77% (CAGR 2023-2027), according to figures from Statista.
“While it’s hard to predict just how the combination of the ongoing cost of living crisis will impact the wider food and drink industry, we can say for certain that West African cocoa production has been hit by bad weather, disease and failing trees – leading to cocoa prices having risen from $2,500 per tonne (a year ago), to now currently trading at $10,500 per tonne, meaning that chocolate has almost doubled in price,” says Carol Oldbury, Managing Director at Hames Chocolates.
Carol believes that this is very likely to affect chocolate’s popularity as prices will have to rise because manufacturers will not be able to absorb all of this increase, resulting in retail price rises.
Also commenting on the rising cost of cocoa, Joke Aerts, Open Chain Lead at Tony’s Chocolonely, says: “We have all felt the effects of global inflation. The cost of living is going up and the price of most things, including chocolate, is rising along with it. However, it is important to remember that the cost of cocoa farming is also becoming exponentially more expensive, with an emphasis being placed on increasing productivity, alongside the negative effect that climate change is having on production. No one wants to celebrate things becoming more expensive, but the increasing cost of cocoa is actually something Tony’s are happy about, as long as it is the farmers that get paid more, because they need to be paid more!
“With 60% of the world’s cocoa coming from Côte d’Ivoire and Ghana, the current farmgate price – the amount paid to cocoa farmers for their cocoa – is far below the amount needed to enable cocoa farmers in West Africa to earn a living income,” continues Joke. “Especially with the rising prices of fertilizers and other farm inputs, and the negative effect of climate change on productivity. It is important to remember that the high prices on the cocoa trading market don’t necessarily mean that higher prices are being paid to cocoa farmers and this results in devastating consequences, such as 1.5 million children working illegally on cocoa farms.
“As part of our 5 Sourcing Principles, Tony’s Chocolonely and its mission allies always pay a substantially higher price for cocoa – the living income reference price (LIRP). We are calling on the industry to do the same because what is currently happening on the cocoa market is not reflected cocoa farmer’s reality!”
New flavours and more variety
In 2023, the treating and snacking market in the UK was worth £13.3bn, with confectionery holding a 40% share of this category (worth £5.5bn), according to figures supplied by Neilsen. Even with increased chocolate prices, this presents confectioners with a significant sales opportunity in 2024.
New flavours and variety play an important role in maintaining consumer interest in chocolate. “Before the current cocoa crisis, the real growth area had been in blonde chocolate – white chocolate with a caramel colour and underlying caramelised tasting notes,” continues Carol. “Caramel really has been driving blonde chocolate’s growth. According to a report from Innova, caramel is the taste that one-in-three consumers choose when they seek comfort. We expect this growth trend to decline until the market stabilises but expect that caramel will continue to be a popular choice with consumers.”
Similarly, while it is unclear how much chocolate price rises will affect purchases, chocolate lovers are expected to continue purchasing white chocolate as a treat, with the addition of delicate flavours, such as lemon, enabling confectioners to offer a wider choice.
The cost-of-living crisis has driven many consumers to switch to own label and private products, to save money, and with the difficult times predicted to continue, this is a trend that is expected to persist through 2024.
“We have seen growing numbers of shoppers turning to private/own label brands, because they offer not only good value, but quality, innovation, and choice. Confidence in the balance of price and quality that private/own label chocolate provides is at an all-time high, with research from the Food Industry Association (FMI) showing that two-in-five shoppers are buying more private label products than before 2020 and three-in-four plan to continue to do so.
“Hames Chocolates has built its business around being a forward-thinking and innovative private label chocolate company, which understands the importance of tapping into consumer trends, and what this means for customers. As we wait for cocoa market conditions to stabilise, we will continue to work closely with our private label customers to develop new products.”
Unusual flavours are a popular draw today, with consumers becoming increasingly adventurous when seeking out new tastes. “We have had success with our new Hot Chocolate range, which launched in November, offering a variety of flavours including the more unusual mince pie and milk chocolate with Irish Cream flavouring,” continues Carol. “While unique and unfamiliar flavours are increasingly on-trend, we expect that confectionery with familiar and reassuring tastes – such as salted caramel, milk chocolate, white chocolate, strawberry, milk chocolate with hazelnut and dark chocolate, will also continue to be popular with consumers over the course of this year and beyond.
Be more adventurous
Naveen Pessani, Technical Category Manager for Chocolate & Confectionery at ofi, suggested that one way to attract consumer attention in the chocolate category is to tap into the desire for adventure by developing products that include exotic or unusual flavours. “Building on our research into the emerging flavour profiles crossing continents, there are three chocolate and confectionery trends to watch right now,” he says. These are:
Cross-category flavour blends: Flavour inspiration comes from many places, including other product categories such as bakery, desserts, and ice cream. According to research from ofi, one of the top emerging flavours in UK confectionery right now, for example, is key lime, from the famous key lime pie. And dessert flavours such as sticky toffee pudding, lemon posset, banoffee pie and crème brûlée are also now making their way into chocolate collections.
The rise of newstalgia: According to Innova research ‘New, Niche and Not For Long: Trends in Global Limited Time NPD,’ a total of 48% of consumers are seeking out familiar nostalgic flavours, but they want some excitement and innovation too. This is fuelling the ‘newstalgia’ trend, where manufacturers bring a new twist to classic flavours and formats.
Classic chocolate flavours, for example, are being swapped out for white chocolate in confectionery products. Hazelnut and almond, are traditional staples in many chocolate and confectionery products, but other nut flavours, such as pistachio, are now also growing in popularity.
Exotic fruits: Fruit flavours are a key part of product development in many confectionery categories, but suppliers are looking to complement existing favourites, such as strawberry or lemon, with more diverse choices. Tropical and exotic fruit flavours are on the rise, with mango, pineapple and passion fruit growing, alongside peach – which was initially driven by its popularity across Asia.
Chicory is another flavour emerging in European confectionery. It has a nutty, coffee-like taste and is a natural aid to sugar reduction in some product applications, because it is made up of smaller sugar chains of inulin, which have a sweet taste and prompt a lower blood sugar response than sugar.
New flavours from the Far East are also now influencing new product developments in Europe, with an opportunity for confectionery manufacturers to create new products or reimagine classic favourites.
Sharing packs
Last year, the CGA New Industry Report found that two-in-five consumers planned to go out less often, while according to a report from Attest, three-fifths intended to spend more cautiously. “This trend looks likely to continue in the current economic climate, so we expect the ‘big night in’ occasion and confectionery sharing bags will remain a significant opportunity for confectioners in 2024,’ predicts Carol.
“We also envisage that consumers will continue to favour brands that manufacture confectionery in an ethical and sustainable way,” she continues. “These values are of huge importance Hames Chocolates, and to deliver them in our products, we work closely with the Rainforest Alliance, Cocoa Horizons, and other organisations.” Carol goes on to argue the importance of sustainability needing to run right through a business – from using the most sustainable ingredients; updating equipment to reduce a company’s environment impact and working with suppliers who share the same commitments.
Social media
“Social media also has a big role to play in building excitement around product innovation and creativity,” says Carol. “Growing numbers of confectioners that we supply are using their social platforms to not only tell the story behind their brand and showcase the innovative ideas they are implementing, but also to demonstrate their ongoing commitment to maintaining processes that benefit the planet’s health.”
Unfortunately, social media can be a double-edged sword for confectionery producers. While it can offer a wide range of advantages – from building brand awareness and more effectively engaging with consumers – it is too easy to fall prey to false or misleading information. Comments can be shared without vetting, fact-checking, or accountability on social media platforms, which has made it a breeding ground for misinformation and has resulted in many consumers becoming increasingly wary of anything they read on social media. According to GlobalData, a data and analytics company, it is crucial for brands to be more proactive in addressing this misinformation.
Researchers at Deakin University in Australia conducted a national audit of influencer posts, which revealed that nearly half contained inaccurate information. The study looked at nearly 700 Instagram posts by influencers and brands with more than 100,000 followers and found that 45% contained inaccurate nutrition information. Significantly, brand accounts were found to provide the least accurate and lowest quality information, while the most accurate and high-quality information was provided by nutritionists and dietitians.
Katrina Diamonon, Principal Consumer Analyst at GlobalData, says: “The study highlights the need for brands to utilise social media thoughtfully and with a degree of humility. Marketers should acknowledge that consumers will not unconditionally trust what brands are saying online. In fact, consumers are often sceptical of brand messaging on social media, as it can be viewed as promotional and lacking authenticity.
“Building trust on social media is therefore essential if brands wish to establish strong relationships with their audience and foster loyalty. In order to do this, they need to be transparent about their products, services, and business practices,” says Katrina.
Belgian trends
A specialist wholesaler in the confectionery sector, Ameel Candy World has observed some interesting trends that are shaping the Belgian confectionery market.
Frans Hellinckx, Sales Manager at Ameel Candy World, reports that traditional jelly and gummy candies continue to dominate sales in the region, with longstanding brands and their signature products maintaining their position as volume drivers. “We have witnessed consistent growth year on year among the top five brands in our bulk candy offerings,” says Frans. “Demand for traditional jelly and gummy candies remains robust, with our bestsellers consistently driving sales.”
Frans has also identified a resurgence of interest in more traditional classical candies, evoking nostalgia and a return to timeless flavours and textures.
When it comes to social media, Ameel Candy World says that while this can have an influence on product preferences, it comes with a degree of unpredictability. “Products gaining traction on platforms like TikTok, Facebook or Instagram can experience rapid but short-lived success. Sour products and innovative offerings like freeze-dried candies are capturing the attention of younger demographics on these platforms,” says Justien Rosseel, Marketing Manager at Ameel Candy World. “We have recently partnered with a team of eight ambassadors who align with our company ethos. Through their social media posts, we have witnessed incredible statistics of our views, likes and saves. Our social media strategy aims to inspire our audience to inquire about our products at their local stores and encourage retailers to reach out to us. We’re experimenting with this approach and recognise the importance of staying abreast with this trend.”
However, despite highlighting some emerging trends certain dynamics persist within the Belgian confectionery landscape, according to Ameel Candy World. Most interestingly, it has identified only a limited demand for healthier confectionery alternatives, with the majority of consumers in its channels showing only minimal interest in sugar-free or sugar-less products. It appears that Belgian consumers are still prioritising indulgence and authenticity over health considerations. Additionally, Ameel Candy World has identified little emphasis on the avoidance of ultra-processed foods within its market segment.
Despite Ameel Candy Worlds view that Belgian’s are not too worried about healthy confectionery, it is certainly listed as dominant trend in most of the confectionery related reports that have been published in recent years and is a trend that can no longer be ignored by brands wanting to compete today and into the future.
The concept of what a healthy diet is has certainly changed significantly over the years. Traditionally it was accepted that confectionery would only offer empty calories, but was a popular treat nonetheless. Today, however, confectionery is being viewed differently. Confectionery brands are now successfully incorporating functional ingredients such as prebiotics, probiotics or food ingredients rich in vitamins, minerals and antioxidant such as nuts, seeds and berries into their product offerings to win consumer approval while still delighting them with a sweet treat. Health-related claims are also becoming a more common sight in retail confectionery aisles, with ‘gluten-free’, ‘a source of fibre’, ‘no added sugar’ and ‘plant-based’ now regularly appearing on labels to grab the attention of today’s health-conscious consumers.
Editorial contact:
Editor: Kiran Grewal kgrewal@kennedys.co.uk
