Lollipops lose sales

Confectionery consumers worldwide are moving away from the traditional, sugary lollipop to other sweets, driven by health concerns and greater spending power. Market researchers say they are flocking to innovative, functional soft candies offering health benefits while consumers with more money turn to chocolates. Data from Euromonitor’s 2011 report, ‘Global market for children’s confectionery,’ written by food analyst Francisco Redruello, and its predictions for 2012 based on interviews with manufacturers suggest countries worldwide are seeing one or both of these trends.

Western Europe

Generally, lollipop consumption in western Europe is declining: Euromonitor predicted lollipops’ (defined as a boiled sweet on a stick) current retail sales will drop 2.6 per cent this year. Euromonitor estimated the value of lollipop sales in Germany will plummet 15 per cent in 2012 – the biggest decline in western Europe this year. Even where sales are growing, increases can be sluggish: sales by value in Italy are expected to grow a mere 0.7 per cent while Spain’s will increase by only 1.3 per cent. Lollipop  retail value sales have grown slowly in Spain in the past few years, rising only one per cent in 2010 compared to a four per cent increase the year before, wrote Redruello, largely because of  “a declining birth rate and the impact of the economic recession as parents reduce the weekly allowance given to their children for treats.” European confectionery association Caobisco also predicts using its most recent data from 2010, that this lull will also depress intra-European Union (EU) sugar confectionery exports in the first half of 2012 “probably due, among other [reasons], to the recession,” says Laurence Vicca, a spokesperson for Caobisco.

Yet this decline goes beyond Europe’s economic troubles – in fact, the low unit prices of lollipops and snack foods are still encouraging some people to buy, Redruello told Confectionery Production. Rather, lollipops here are losing ground to gums, pastilles, jellies, and chews, which can be innovated much more easily than lollipops in terms of fillings, mouldings, and mixing flavours with health benefits. “The amount of new development that you have in this new category is amazing,” says Redruello, citing 20 to 30 new soft confectionery product lines each year in countries such as Spain, Italy, and Germany. Lollipops are also a more mature category and see more competition – with innovations being more easily and rapidly copied. “It’s not easy to be innovative in such a traditional category,” says Simona Zanaletti, international brand manager for Perfetti Van Melle’s Chupa Chups. Perfetti is by far the dominant player in western Europe – claiming 60 per cent of lollipop sales there, said Redruello.

 Sweets with benefits

This means soft confectionery and chocolates have been in a better position to conquer a growing consumer trend: adults choosing sweets promising health benefits. Some soft confectionery lines in Spain have addressed issues including rising obesity among youths. For example, Miguelañez released gluten free Zumo Jellies for coeliacs with ten per cent fruit juice concentrate. German consumers have also been moving towards functional sweets in the last three years, said Redruello. These benefits, such as sugar free and vitamin and collagen enriched candies effectively attract adult consumers. However, “lollipops are very children oriented and they [children] are not keen on sugar free lollipops,” he says.

Boosting sales

Still, innovative manufacturers can boost lollipop sales, he said, pointing to France as an example. Euromonitor estimated France’s lollipop current value would substantially grow by 8.5 per cent for 2012, spurred by innovative solutions and less competition from other categories. For example, Chupa Chups’ introduced its mini lollipops in France, which attract parents because children will more easily finish smaller portions while children enjoy flavours such as fizzy powder. “They targeted the right segment, which is the mini types of lollipops that didn’t exist in France before,” says Redruello. Unlike in most of Europe, lollipops are very popular in France with sales predicted to hit €67 million compared to €15.6m in Germany and €56m in Spain in 2012. European consumers still prefer traditional flavours of fruity or cola, said Zanaletti, although sour variants are popular with children. Another exception is Britain, where the Olympics by promoting days out have boosted lollipop sales along with other snack foods: UK lollipop sales-by-value are expected to grow 7.6 per cent this year.

The US market

Meanwhile, in North America, the United States’ mature lollipop market is expected to contract by 0.2 per cent this year. In stark contrast, Euromonitor predicts the more dynamic pastilles, gums, jellies, and chews sub-sectors will grow by 5.2 per cent. Jenn Ellek, director of trade marketing and communications at the US based National Confectioners Association, said American consumption of hard confectionery, including boiled sweets and lollipops, has declined sharply by 11 per cent in the last five years (according to data for the period ending 10 June 2012).  Children aged two to 17 are responsible for 55 per cent of US lollipop consumption, and while this key demand has been more stable, children are still eating fewer lollipops, with consumption down 1.5 per cent over the past five years.

US manufacturers face challenges in producing healthier lollipop lines with the same indulgent taste. “It can be a delicate balance between taste and healthful, and manufacturers keep this in mind,” says Ellek. In general, American consumers prefer traditional, conservative flavours such as cherry and vanilla to more exotic ones. But Ellek said they are becoming more adventurous, as seen with flavours influenced by Latin America (sweet, spicy, and savoury) and Asia (‘holistic’ flavours such as ginger) already entering the market.

Emerging markets

In emerging markets too, confectionery consumers are moving towards health oriented soft confectionery or pricier chocolates. South America’s lollipop constant retail value is expected to decline by 10.9 per cent in 2012. Brazilian consumers, for example, have a health perception “above the average of other South America countries,” says Redruello. But those who still choose to eat sweets are upgrading to chocolate confectionery – a more expensive category that people can increasingly afford because of Brazil’s economic growth. The same is true in Argentina, where Euromonitor predicted chocolate confectionery’s constant retail value will rise by 8.4 per cent in 2012 while the value for lollipops could drop one per cent this year.

Asia

Asian markets for lollipops, on the other hand, still remain strong. “The developing markets like the Middle East are just on fire,” says John Brooks Jr, vice president of the US based company Adams & Brooks that produces colourful lollipops such as Whirly, Twirl, and Unicorn Pops formed by twisting the confectionery during the moulding process into circular or screw shapes. Perfetti Van Melle has also registered growth in sales for both Chupa Chups and Alpenliebe lollipop brands in Asia, said Zanaletti. Chinese consumers are also buying more chocolate, once only bought for special occasions, said Redruello. But, unlike most other countries, sugar confectionery remains popular: Euromonitor predicted this category would grow 12.3 per cent in constant retail value in 2012, while lollipops’ could rise eight per cent and register $328m (€254m) in sales. Although the growth in sugar confectionery is small compared to the expected 16.2 per cent rise in chocolates, sales are still strong: “The consumer base is much larger in sugar confectionery because it’s cheaper [than chocolate],” says Mr Redruello. Lollipops have been performing well for the last few years: in 2010, lollipops performed the third strongest among sugar confectionery with sales that were expected to rise by seven per cent in retail value. Brands such as Chupa Chups, Alpenliebe, those owned by China based Hsu Fu Chi International (such as DoDo), and US based Wrigley’s Chinese brand Pim Pom have also benefited from successful advertisements that are increasingly attracting young Chinese consumers, he wrote.

Brooks Jr thinks lollipops really are here to stay: “There’s always the idea that consumers would like a guilt free pleasure or the lower calorie indulgences… And I think that’s always going to be a part of the food landscape in many different cultures,” he says.

By Kitty So

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