Boston, MA -- (ReleaseWire) -- 07/09/2014 -- Exploding raw material costs and in turn, higher retail prices are among the drivers for retail volume sales decline in 2013 while value sales continued to grow. In context of the review period, the value growth in 2013 is around the same as the performance over the review period and the volume sales decline is also comparable to what was seen during the review period. Volume sales decline is also the result of the maturity of chocolate confectionery on the whole by 2013, coupled by rising health awareness in Germany.
Ferrero retains a 21% value share as the leading company in chocolate confectionery in 2012 and 2013; far ahead of its nearest rivals: Mars Deutschland with 12% and Kraft Foods Deutschland, also with 12%. Ferrero was in 2013 especially successful in terms of sales over the Easter season. However, Mars recorded the biggest value sales increase of the three leading players in 2013. In particular, Mars' brand M&M's performed very well to cement the leadership of bagged selflines/softlines. Other Mars brands, such as Snickers, Twix or Balisto, also performed well, all with improved availability in retail channels. Mars Deutschland aims to further intensify channel-specific cooperation with its partners. In 2012, the divisions Marketing and Customer Marketing were merged together to a new division called Customer & Channel Development with the goal of further development and to generate added value.
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Constant retail value as well as retail volume sales of chocolate confectionery are both expected to decline over the forecast period. The growing consciousness of healthier nutrition and the general health and wellness trend in Germany are expected to have a negative impact on chocolate confectionery sales between 2013 and 2018. Furthermore, the expected further rising commodity prices will likewise exert a negative influence on future sales.
After two years of significant decline, gum set to recover in 2013 with stagnation in current value terms. However, in terms of volume sales, gum in Germany performed negatively for the third year in a row. Average unit prices for gum increased in 2013 to EUR29/kg, making it proportionally the most expensive confectionery product. Higher commodity and energy costs were the biggest price-increase drivers in 2013, but with falling volume sales of gum, even the price increase was not sufficient to lift value sales. As for the 2013 performance of gum in the context of the review period from 2008-2013, it was a bad year for the market as the growth rate is below the level seen in the review period in terms of current value sales.
Wrigley continues to clearly dominate gum sales in Germany in 2013 with a value share of 76%. The company invested strongly in 2012 and 2013 in its strongest brands, Extra, Airwaves and 5gum. Furthermore, Wrigley established a new important cooperation with Aldi Nord, after losing out sales due to Schlecker's closure. The cooperation with Aldi is seen as a big step towards further competitive advantage.
Gum is expected to recover over the forecast period after the declining trend during the last years of the review period, because of the high saturation of the market. However, both in terms of volume and value, retail sales of gum are forecast to stagnate over the forecast period. Wrigley, as the most dominant player in the industry, is expected to stimulate the gum category due to its strong investments and innovations. Furthermore, the expected market entry of Mondelez with Trident and the growing popularity of Mentos, are forecast to bring fresh wind into the gum market in Germany.
Sugar confectionery's performance in 2013 is better than the performance over the review period in terms of value sales. This outcome has especially to do with higher retail prices due to exploding raw material costs particularly for sugar, which is twice as expensive as in 2011, and gelatine which is 80% more expensive. However, higher prices had an effect on volume sales which declined through almost all of the sugar confectionery categories. Nevertheless, the volume sales decline is around the same as the performance over the review period.
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