Sweet-Tooth In­dus­try

En­ter­prises of the Be­laru­sian state food in­dus­try con­cern Bel­go­spishche­p­rom make over 1,000 ti­tles of con­fec­tionery prod­ucts

Economy of Belarus - - FRONT PAGE -

No other branch of the food in­dus­try is as­so­ci­ated with plea­sure as much as the con­fec­tionery in­dus­try. For many peo­ple can­dies, choco­late, mar­malade, and fancy cakes rep­re­sent a source of pos­i­tive emo­tions. Con­sumers in Be­larus and abroad have come to rec­og­nize Be­laru­sian sweets as or­ganic and qual­ity prod­ucts. Nev­er­the­less, con­sumers be­come more de­mand­ing as the choice of sweets gets big­ger ev­ery year. In turn, man­u­fac­tur­ers are forced to con­stantly up­date the as­sort­ment range and work out new recipes. The ar­ti­cle re­veals what Be­laru­sian con­fec­tion­ers fo­cus on in the face of grow­ing com­pe­ti­tion and what prob­lems they en­counter.

Over­all Pic­ture

Be­larus’ con­fec­tionery mar­ket is a mar­ket with a lot of play­ers. Among them are Be­laru­sian, Rus­sian, and Ukrainian com­pa­nies as well as in­ter­na­tion­ally rec­og­nized brands. The ma­jor Be­laru­sian man­u­fac­tur­ers in­clude en­ter­prises that be­long to the state food in­dus­try con­cern Bel­go­spishche­p­rom: SOAO Kom­mu­narka, OAO Spar­tak, OAO Krasny Pis­chevik, OAO Slodych, OAO Krasny Mozyryanin, OAO Konfa, Ivkon, and SOOO First Choco­late Company. Th­ese com­pa­nies ac­count for 67-69% of the to­tal out­put. It is re­mark­able that Be­laru­sian non-con­fec­tionery com­pa­nies have also de­cided to try their hand at the con­fec­tionery business in re­cent years. For in­stance, the Kalinkovichi bak­ery started mak­ing wine gum. Gomelkhlebprom launched a line to make hard-boiled sweets. Mogilevkhlebprom started mak­ing mar­malade us­ing its Kostyukovichi bak­ery branch.

This year Be­laru­sian man­u­fac­tur­ers have not changed their out­put. In Jan­uary-Septem­ber Bel­go­spishche­p­rom en­ter­prises turned out 57,800 tonnes of sweets, 1.6% up from the same pe­riod of last year. The top three man­u­fac­tur­ers were OAO Kom­mu­narka, OAO Spar­tak, and OAO Krasny Pis­chevik.

For the sake of in­creas­ing the out­put the en­ter­prises are busy re­tool­ing and up­grad­ing their man­u­fac­tur­ing fa­cil­i­ties. In 2014 Bel­go­spishche­p­rom en­ter­prises al­lo­cated over Br160 bil­lion for it. Spe­cial­ists noted that there was time when the de­pre­ci­a­tion rate of Be­laru­sian con­fec­tioner­ies ex­ceeded 70% due to the pre­ced­ing lack of in­vest­ments to the tune of roughly $200 mil­lion. Now the sit­u­a­tion is much more op­ti­mistic. Since 2011 nine lines to make con­fec­tionery prod­ucts have been com­mis­sioned and the over­all out­put ca­pac­ity of Be­laru­sian con­fec­tioner­ies has in­creased by 23,000 tonnes to 178,400 tonnes.

Bel­go­spishche­p­rom en­ter­prises make over 1,000 ti­tles of var­i­ous con­fec­tionery prod­ucts. The man­u­fac­tur­ers pri­mar­ily rely on Be­larus-made raw ma­te­ri­als ex­cept for crit­i­cal im­ports such as co­coa beans, raisins, nuts, gelling agents made of wa­ter plants. Sooner or later con­sumers get tired of the same prod­ucts, and the Be­laru­sian man­u­fac­tur­ers work hard to re­fresh the prod­uct choice ev­ery year. Sales statis­tics is an­a­lyzed to phase out un­pop­u­lar prod­ucts in or­der to of­fer popular ones. Since 2000 the per capita con­sump­tion of con­fec­tionery prod­ucts has been ris­ing. In par­tic­u­lar, con­fec­tionery con­sump­tion in Be­larus in 2013 to­taled 18.5kg per capita, 0.5kg up from 2012.

Be­larus-made sugar sweets ac­count for about 60% of con­fec­tionery sales in the coun­try, with the share of im­port close to 40%. In Jan­uary-Septem­ber 2014 Bel­go­spishche­p­rom en­ter­prises sold 49,300 tonnes of sweets on the home mar­ket, 4.5% up from the same pe­riod of last year.

The in­crease in sales is at­trib­uted to changes in the dis­tri­bu­tion scheme, the use of a flex­i­ble sys­tem of dis­counts for re­tail­ers with in­creased respites of pay­ment for shipped prod­ucts, tighter co­op­er­a­tion with top re­tail chains and heav­ier in­vest­ments in ad­ver­tis­ing.

It is worth not­ing that the con­fec­tionery mar­ket is heav­ily in­flu­enced by sea­sonal trends. Thus, when the air is warm, the de­mand for flour-based sweets, caramel,

jel­lies, and fon­dant sweets is high. Au­tumn and win­ter are a good time for sell­ing choco­late prod­ucts. Boxes of sweets sell par­tic­u­larly well closer to red-let­ter days. The de­mand for con­fec­tionery prod­ucts is at its high­est in the fourth quar­ter of ev­ery year, with the sales go­ing through the roof dur­ing New Year cel­e­bra­tions. De­mand for con­fec­tionery usu­ally drops in the first quar­ter of ev­ery year.

As far as for­eign mar­kets are con­cerned, in Jan­uarySeptem­ber 2014 Bel­go­spishche­p­rom en­ter­prises shipped 8,300 tonnes of sweets to over 20 coun­tries across the globe. The com­pa­nies have their own dis­trib­u­tors abroad. The Cus­toms Union mar­ket is the key one for Be­laru­sian man­u­fac­tur­ers. How­ever, they are also eye­ing the mar­kets of the non-CIS states. For in­stance, OAO Spar­tak is work­ing to pen­e­trate the mar­kets of South Korea, Viet­nam, and China. China looks par­tic­u­larly promis­ing. The company is now pre­par­ing a cat­a­logue of prod­ucts in Chi­nese tak­ing into ac­count pref­er­ences of Chi­nese res­i­dents.

For­eign mar­kets have their trends too, this is why the ex­port pol­icy of Be­laru­sian man­u­fac­tur­ers has to be co­or­di­nated. Rep­re­sen­ta­tives of OAO Krasny Pis­chevik be­lieve that co­or­di­na­tion may be car­ried out via a co­her­ent mar­ket­ing strat­egy and a pric­ing pol­icy to al­low Be­laru­sian con­fec­tioner­ies to act as “a sin­gle front”.

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