Rising disposable incomes and increasing health awareness across the Asia-Pacific region are driving demand for functional confectionery products, meaning manufacturers should promote the healthy aspects of their products to succeed, UK-based firm GlobalData says.
The research firm’s report, “Opportunities in the Asia-Pacific Confectionery Sector,” reveals the market, which was valued at $39.2 billion in 2017, is expected to swell at a compound annual growth rate (CAGR) of 5.6 percent between 2017–2022.
“The growing popularity of natural ingredients, which are free from artificial flavors and preservatives, in food is boosting the demand for confectionery products,” says Debakshi Sarkar, GlobalData consumer analyst. “In addition, the sizeable proportion of young consumers with adventurous palates is fueling the growth for novel varieties of confectionery products in the region.”
Within the Asia-Pacific region, China held the largest value share with 42 percent, followed by Japan (25.5 percent), India (10.1 percent) and Australia (7.1 percent) in 2017. India is expected to experience the fastest growth with a CAGR of 10.3 percent, followed by China with 6.7 percent during the review period.
In terms of categories, sugar confectionery accounted for the largest share with 43.3 percent, followed by chocolate (37.7 percent) during the same year.
Demand for these categories is driven by consumers seeking a gourmet treat after a busy day, as evidenced by GlobalData’s 2018 Q3 consumer survey. It found that 58 percent consumers in the Asia and Australasia region consume chocolate/sugar confectionery while relaxing at home.
The top three companies in the Asia-Pacific confectionery sector accounted for 36.5 percent value share in 2017. Mars, Inc. led with 14.4 percent, followed by Mondelez International at 12.8 percent and Lotte Co. at 9.3 percent. Private label products accounted for 2.5 percent share during the same year.
“With the increasing health awareness levels among consumers, the confectionery sector is expected to witness a growing demand for functional chocolates which are high in nutritional value,” Sakar said. “Therefore, confectionery manufacturers must position their products as a healthy offering rather than just a gourmet treat, in order to cater to a wider consumer base.”