How Sweet Is the Future

CHOCOLATE VERSUS SUGAR We observe that the importance of chocolate products in relation to sugar products as a whole is highest in Germany, Austria and Norway. How Sweet is the Future However, the chocolate products’ market in these countries is not uni- Internationalization/expansion fied and appears to be diversified within the product classes. For instance, Germans are the biggest consumers of pralines, which accounts for nearly 40 percent of Renate Sander the total consumption of chocolate A.C. Nielsen GmbH products, with tablets representing 31 percent. In Austria it is exactly the opposite. However, Scandina- vians, Irish and Dutch pay more for chocolate bars. In Spain, which comes last in Europe as far as chocolate products are concerned, we note that bars are or producers, internationaliza- In preparation for this report we far below the average at only 7 per- Ftion and expansion towards had access to data from 32 countries cent. This is no surprise if we take into other countries is mostly no longer where we have regular reporting on consideration that, for most large an option, but a question of survival. confectionery. These countries rep- international suppliers of bars, the The battle against the rise of raw resent nearly half (46%) of the Spanish market represents a weak material prices and the multiplica- world population, i.e., about 2.6 bil- spot in their European activities. tion of difficulties in achieving high- lion inhabitants. Among Asian countries, the Chi- er prices at trade level, and thus, the In an attempt to be clearer we nese market is a dark blot on the pressure linked to profit, force pro- divided the confectionery market chocolate products horizon. On the ducers to look towards new markets. into four segments: chocolate con- contrary, Japan consumes the fectionery, sugar confectionery, bis- biggest part of Asian chocolate cuits and salted snacks. INTERNATIONALIZATION products (64.7%). Australians, with We examined detailed data on STRATEGIES a clearly disproportionate market the four segments for 16 countries. Internationalization strategies may In 1995, these 16 countries realized share of 16.4 percent for 1.1 percent vary. One strategy is the acquisition of a turnover of US$36.4 billion for of the population, often play a key local producers or joint ventures in confectionery, representing an aver- role in the approach to Asian mar- certain countries. For example, over age part of the total turnover for kets. So, for many manufacturers, the last few years Nestlé has entered food trade (All Commodity Vol- Australia serves as an open door to Eastern European and South Ameri- ume=ACV) of 4.0 percent. Far East countries. can markets. Philip Morris strength- It is worth noting the differences South America is an interesting ened its position in the Scandinavian among some countries. While market, in particular Brazil, given its market by purchasing Freia Marabou, France represents only 2.6 percent population size and its possibilities of and Cadbury was not only able to get of this confectionery volume, development in respect to the con- into the German market through its Poland accounts for 8.5 percent. The sumption of chocolate products (Fig- take-over of Piasten, but also to reasons for this difference lie not ure 1). This is also true for Colombia. ensure its presence in Eastern Europe. only in the importance of confec- The South American markets will Other manufacturers, such as tionery itself, but also in the trade become very lucrative because of the Mars and Ferrero, follow a strategy structure and the size of the distrib- high rate of growth of their consump- of creating new markets by their ution network outside the food tion of chocolate products, even own efforts. retail trade. though, of course, these increases Presented at the IOCCC Conference in Köln, Germany The Manufacturing Confectioner/June 1996 53.

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