Explainer: Where is the GCC’s confectionery market headed?
Even though wellness is on the rise, there will always be a place in the market for confectionery
What is the current size of the confectionery industry in the GCC region?
The GCC chocolate market alone stood at $1.3bn in 2017 and is projected to grow at a CAGR of over 12 per cent to reach $2.6bn by 2023. Anticipated growth in the market can be attributed to rising consumption of chocolate among the young population within the age group of 5-24 years coupled with growing urbanisation across the GCC region. Moreover, the growing trend of gifting premium chocolates as a substitute for dried fruits and traditional sweets is further aiding the region’s chocolate business. Rising tourist footfall and an expanding expatriate population (which is increasing the influence of western culture), the higher disposable income of the middle-class population, and growing awareness about health benefits of [certain types of] chocolate are further expected to propel growth in the market through 2023.
However, the confectionery industry covers more than chocolate; it includes sugar confectionery, gum and mints as well. It is evident that in the past decade, supermarkets in the region – particularly in the UAE and Saudi Arabia – have been upgrading their confectionery space and offerings with great varieties, especially from US and Europe. More and more franchised confectionery concepts continue to enter the region while numerous local artisan brands have mushroomed, bringing the confectionery industry steady growth.
While most international brands are present here, do you believe the local market is growing as well?
Yes, very much so. The community based in the GCC (including the media) are heavily invested in homegrown brands and love to support where they can. As they are homegrown, they are normally
“IN A MARKET LIKE THE GCC THAT IS CONSTANTLY GROWING, SHIFTING AND PROGRESSING, IT IS HARD TO KEEP UP AND STAND OUT FROM THE REST. PROVIDING AN AMAZING CUSTOMER JOURNEY IS KEY AND SO IS HAVING A STRONG, BELIEVABLE AND RELATABLE BRAND”
unique to the market and cater specifically to the region, which always plays in our favour. Additionally, homegrown brands are increasingly looking to enter developed markets such as the US and Europe in search of greater economies of scale at a time when Western multinationals are cutting back their own expansion plans in emerging markets.
How can retailers distinguish themselves in an oversaturated market?
In a market like the GCC that is constantly growing, shifting and progressing, it is hard to keep up and stand out from the rest. Providing an amazing customer journey is key and so is having a strong, believable and relatable brand. Authenticity is what resonates and has staying power. It is also critical to create distinct products, assets and messaging, and build a loyal customer base around that.
Looking at the GCC, what do consumers expect from confectioners?
The evidence shows that this trend of purchasing chocolate, confectionery and dessert products online will not subside following the Covid-19 pandemic. Therefore, quick and efficient delivery is key in this market, to satisfy customer cravings at short notice. When customers are going into a store, they are looking to engage in interactive experiences – they want to enjoy the visit and make the most of the time they are spending with their friends and family. Customers are also looking for products that are in trend and/or nostalgic items that are unique – again, this is heavily influenced by the US, Europe and lately Japan and Korea.
Lastly, what is the future of the industry? Where do you see it headed?
The confectionery industry will remain on the rise despite the pandemic and economic crisis; it has proven time and again that it is an industry that has stayed resilient. Confectionery provides affordable comfort and indulgence. It taps into our youth, creating nostalgia for all those who enjoy it. Even though wellness is on the rise, there will always be a place in the market for confectionery. It also satisfies cravings (which we all know we have) – it doesn’t need to be seen as unhealthy and can very easily fit into a healthy, balanced diet.
Additionally, rising disposable income and steady growth of the GCC are some major factors eliciting demand for varied sweets in the marketplace. Higher acceptance of westernised food and consumer’s daily routine will continue to create great opportunities for the confectionery industry. Online confectionery businesses will also continue to grow alongside with brick-and-mortar.