Sugar confectionery market size is expected to grow at a significant CAGR through 2028 due to the increasing middle-class population and higher rate of urbanization worldwide. The changing consumer lifestyles mainly in the developing countries have prompted a rising requirement for low-fat convenience food items, further driving the demand for organic and premium chocolate products. However, the growing burden of obesity-related diseases and the shifting preference for vegan and plant-based products may restrict the industry growth.
Sugar confectioneries mainly comprise artificial or natural sugar as key ingredients and are widely consumed across the world. Higher application scope and collective inclination towards gifting confectionery products will add to the product demand spurt. The influx of new innovative flavors and healthy ingredients will also fuel the market expansion.
Based on type, the sugar confectionery market share from the hard-boiled sweets segment will expand from the year 2022 to 2028 driven by their higher popularity among kids. This type of confectionery comes in a glossy state and is easy to manufacture. Fruit drops, barley sugars, acid drops, hard gums, butterscotch, toffee, and caramel are some most consumed hard-boiled candies. Growing intake for boosting the blood sugar quickly is another factor influencing the product demand.
On the basis of distribution channels, the sugar confectionery market is classified into store-based and non-store based. Out of these, the store-based segment is expected to grow owing to access to several different flavors and attractive packaging of toffees, candies and lollipops in supermarkets, convenience stores, malls, hypermarkets, and duty-free outlets.
Confectionery stores are witnessing growing consumer preference as they are filled with an assortment of sweets far much larger than grocery or convenience stores. The increasing sales of confectioneries in store-based distribution channels compared to online stores due to the tactical placement of products will additionally anchor the market development.
Regionally, the demand for sugar confectionery is set to expand in the Asia Pacific with the growing consumer household incomes, and the rapidly expanding younger population. The significant strides in e-commerce and retail sectors along with the presence of major market players have made way for a higher number of marketing campaigns in the region. The improving lifestyles, increasing spending capabilities and the growing product consumption in India and China will drive the regional market growth.
The sugar confectionery market is highly competitive and comprises the presence of players that include Ferrero SpA (Ferrero International S.A.), Lotte Confectionery (Lotte Corporation), Perfetti Van Melle, The Hershey Company (Hershey Trust Company), Specialty Food Association, Inc., Nestlé S.A., The Kraft Heinz Company, Jelly Belly Candy Company, Lindt & Sprüngli AG, and HARIBO of America, Inc. (Haribo).
These entities are constantly focusing on inorganic strategic measures, such as innovations acquisitions, and partnerships to reinforce their global presence. They are also working on R&D investments, and capacity expansions to gain more market share.
For instance, in February 2022, Lotte Confectionery invested USD 28.5 million in Lotte KF RUS, its Russian subsidiary to ramp up the local manufacturing of its popular Choco Pie chocolate cakes across the country.
Similarly, in November 2021, Lindt & Sprüngli embarked on a new major investment plan that totaled around €74 million in a bid to expand the capacity at its Swiss production base in Olten.
The COVID-19 pandemic moderately affected the sugar confectionery industry on account of the declining sales of snacks, particularly sweets, considering the imposition of various industrial trade and manufacturing barriers during 2020. However, the rising inclination and willingness of consumers to spend more on food items to counter the increasing COVID-related stress levels assisted in increased product demand amid the outbreak.