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