Demand for loose sweets is shifting towards packaged confectionery products

The trend of growth in demand for inexpensive loose candies and cookies, which appeared in 2022 in conditions of uncertainty, has changed. At the end of 2023, sales of these categories decreased by 5.8–14%, and demand shifted to chocolate bars and packaged cookies. The rise in price of chocolate may again lead to a switch to inexpensive sweets, experts say.

Demand for loose sweets is shifting in favor of packaged confectionery products, according to NielsenIQ research. According to the company’s retail audit, in 2023, sales of loose sweet cookies decreased year-on-year by 14% in volume terms and by 7% in money terms. In the category of loose chocolates, sales decreased by 5.9% and 2.2%, other sweets – by 5.8% and 3.9%, respectively. A year earlier, sales of loose sweets grew in value by 20–30%, and the category of loose non-chocolate sweets grew in volume by 3.4%, NielsenIQ points out.

NielsenIQ Customer Relations Director Saltanat Nysanova attributes the decline in demand for loose sweets to the decline in the share of traditional retail stores in favor of modern retail. According to her, traditional retail stores accounted for about 20% of the decline in the loose chocolates category, 40% in other candies and almost 80% in sweet cookies. According to Infoline, in 2023, the share of ten chains in the food retail market increased by 2 percentage points, to 40.5%. In addition, Ms. Nysanova adds, some consumers may switch to impulse consumption goods, such as chocolate bars. The shift in demand may also be associated with the desire of consumers to buy goods with a predetermined cost, NielsenIQ points out.

According to the company’s retail audit, sales of chocolate bars in 2023 year-on-year grew by 4.1% in volume terms and by 8.5% in money terms. Demand for packaged non-chocolate candies increased by 2.9% and 11.9%, and for packaged sweet biscuits by 1.1% and 9.3%, respectively. The share of loose sweets, according to NielsenIQ estimates, in the structure of cash sales in the confectionery market in 2023 decreased to 12.9% versus 14.2% a year earlier.

President and co-owner of the Moscow Pobeda confectionery factory, Vitaly Muravyov, notes that bulk candies are a less convenient format than packaged ones, although they are cheaper due to the lack of additional packaging. According to him, the share of sweets by weight in the market has been slowly declining recently, and demand in the segment picked up somewhat in 2022-2023, after which the priority of convenience of consumption returned by the end of last year. Individual packaging in general is a priority today in the grocery market, adds Mr. Muravyov. The holding “United Confectioners” (factories “Red October”, “Babaevsky Confectionery Concern”, “Rot Front”, etc.), Mars, Nestle, “KDV Group” did not answer “Kommersant”.

Executive Director of Rusbrand Alexey Popovichev also points out that sales of loose sweets in 2022 grew in conditions of uncertainty, including due to an increase in demand for purchases for future use, and today the demand for confectionery products is leveling out. General Director of Infoline-Analytics Mikhail Burmistrov notes that the increase in demand for more expensive packaged confectionery products correlates with the general trend of income growth in 2023. And sales of loose sweets could be negatively affected by a decrease in traffic in specialized networks amid growing competition in the retail market, the expert points out.

Vitaly Muravyov says that this year the consumption of confectionery products will be primarily influenced by the situation with raw materials. With increased demand and a shortage of cocoa beans, prices for this ingredient have tripled year-on-year, and consumers may be switching to more affordable sweets such as wafer bars, flour, jelly and sugary confectionery products, he points out. And Mikhail Burmistrov notes that hard discounters launched by large retailers can take over sales of loose sweets.

Vladimir Komarov