Gulfood Manufacturing confectionery

Confectionery

Here's what’s trending in the confectionery industry:

Gulfood manufacturing confectionery

Overview

  • Over the past 5 years running, confectionery production in Middle East and Africa has outperformed all other regions. 
  • The MENA region is one of the fastest growing confectionery markets in the world, currently valued at US$ 9 billion*. In 2016, the industry generated an approximate 20% increase in turnover. 
  • Bolstered by high demand markets such as Saudi Arabia, UAE, Egypt and South Africa, confectionery sales trends are showing no signs of slowing down.
  • Saudi Arabia and UAE demand for confectionery propagates from a largely foreign workforce and a large millennial population while strong macroeconomic performance has boosted sales in South Africa.
  • Chocolate confectionery and gum products are more popular in wealthier markets such as Saudi Arabia, South Africa, Egypt and UAE, with sales higher than those of sugar confectionery. 
  • Sugar confectionery continues to be more popular in markets such as Iran and Nigeria, because of mass distribution ease and longer shelf life. 
  • Demand patterns and consumer behaviour are causing a favourable growth trend for the manufacture of organic, sugar-free chocolate. 
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Chocolate Confectionery

  • Chocolate confectionery remains a relatively underdeveloped category in the Middle East and Africa, whose sales accounted for 5% of world value sales in 2017.
  • However, the Middle East and Africa recorded faster growth than the global average, with a 2% CAGR between 2012 and 2017 in value sales, compared to a -1% CAGR globally.
  • Saudi Arabia, the largest market, generated 22% of the region’s value sales in 2016, while the second largest market, South Africa, accounted for 11%.
  • In Saudi Arabia, higher unit prices fuelled by inflationary pressures in 2017 have seen retailers focus on value-oriented products at the expense of premium products such as reduced-sugar chocolates. This led the largest chocolate confectionery manufacturers such as Mars, Mondelez and Nestlé to focus on price promotions in order to boost sales.
  • In Iran, growth was largely driven by a growing popularity of chocolate confectionery among young urban consumers. The partial loosening of the economic sanctions towards Iran in 2016 has enabled local producers to benefit from an easier process in importing raw material.
  • In the United Arab Emirates’ retail channel, chocolate confectionery was marked by heavy price discounts and bundle offers, especially in hypermarkets and supermarkets, in 2017. With consumers having to budget more wisely, chocolate confectionery manufacturers felt the need to drop prices to attract consumers.
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Sugar Confectionery

  • Sugar confectionery remains a relatively underdeveloped category in the Middle East and Africa, which generated 6% of the world’s value sales in 2017.
  • However, the Middle East and Africa recorded stronger growth than the global average, with a 1% CAGR between 2012 and 2017 in value sales, compared to a -1% CAGR globally.
  • Iran, the largest market, generated 19% of the region’s value sales in 2017, followed by Saudi Arabia, which accounted for 16%.
  • In Iran, sugar confectionery consumption remains largely influenced by traditional local recipes, as many Iranian cities offer their own specific types of sugar confectionery, which target both residents and tourists. 
  • In Saudi Arabia, sales were largely driven by the growth of pastilles, gums, jellies and chews, which benefited from the growing availability of a wide variety of flavours and product formats and the wide distribution of brands such as Mentos and Skittles. 
  • Within other sugar confectionery, halwa products generated the majority of sales. The product's wide presence across all retail channels helped maintain growth in sugar confectionery.
  • In the United Arab Emirates, strong growth in the sugar confectionery category continued to be driven by the success of selective brands within some categories instead of general demand for products within the category as a whole in 2016.

 

*Euromonitor International
 

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