Kraft Foods and Cadbury
Introduction
The confectionary industry all over the world is comprised of three products, that is, gum, sugar and confectionary. But the world-wide economic recession which in the last few years hit the North American and European markets, adversely affected the confectionary sales. In addition, undue pressure affected the sales volumes as more people moved towards healthier lifestyles, in attempt to avoid what they termed as unhealthy foods. In these developed countries, there are growing concerns about obesity and its side effects. Confectionary makers are now making smaller packets so as to reduce the prices of the purchase which in a way is kind of addressing some of the concerns about unhealthy foods. This is done by improving the portion control even though it increases the sales volumes per kilo, but does not affect the profit margins adversely. Even though the confectionary may tend to be termed as a luxury food item, the sales value appears to be recovering steadily from adversity. In the quest of offering premium products which are more profitable than increasing the sales volumes, the confectionary makers are offering what is seen as low value confectionary. These new products include pro-biotic and antioxidant chocolate. However, the current depression is expected to limit the growth of confectionary, because it is seen as a non-essential food item. Nevertheless, chocolate appears to be picking up in the market and was expected to grow by 4 per cent in 2009. Hence due to the recent depression, the chocolate consumers are rewarding themselves in these difficult times with a treat.
The production of smaller but luxury chocolate food items has excelled because both health and economic concerns are addressed as well as retaining the inability to fulfill the gratification of whims and desires. The health concerns might reduce the value of the sugar-based items, but the sugar-free gum was forecasted to grow by 2 per cent in 2009.
Starting a confectionary business in small scale is really easy, since the costs of operation are minimal. However, starting a confectionary industry on a large scale is more difficult because huge capital is needed so as to establish a production volume that is profitable by introducing an enviable brand in order to gain a quick access to the key market channels. The expected high manufacturing trends leads to huge fixed costs with fairly large increases in capacity and is potentially easy to lead to strong competition.
The market categories
In 2009, the chocolate sales accounted for 55 per cent of the worldwide sales while sugar confectionary had 31 per cent and gum was at 14 per cent. These are not significant changes since 2004, but chocolate and gum proportions vary from one area to another. It is interesting to note that in 2009, the sugar confectionary, which incidentally had lower margins, accounted for 65 per cent of sales in China, but was only 26 per cent in Western Europe.
Even though the chocolate sales worldwide are proving to be flexible, the current depression is expected to put back the growth. In the less developed areas, sugar confectionary sales are forecasted to grow at the expense of chocolate, as the consumers trade down for the sake of the economic downturn. The sugar-free gum items are forecasted to grow steadily in the developed areas but in the less developed areas, the sugar-based gum will remain significantly lower because of its low and competitive price.
Despite the current economic difficulties, chocolate sales are continuing to rise throughout the world. For example, British chocolate lovers have increased sales by nearly 6 per cent from 2007, and in China, chocolate sales rose by 18 per cent.
Cadbury confectionery manufacturer makes 7.3 per cent of the world’s chocolate and also makes 27 per cent of the world’s gum and its candy, stands at 7.4 per cent in the world’s market. The company’s brands include Trident, Halls and Sour Patch Kids. The company is less reliant on the holiday season which includes Halloween and Christmas for its sales than its competitors Hershey, Mars, and Nestle. The company’s sales were nearly evenly split between the first and second half of the year in 2007. Its Crème Eggs strongest sales are around Easter and Halls cough drops its sales all year round. Like its other confectionery competitors, Cadbury suffers from the ever rising commodities prices for ingredients such as corn, sugar and milk. From 2006 to 2007, the company’s raw material costs, increased by 10.9 per cent, thus causing its operating margins to decrease from 14.4 per cent to 13.2 per cent. In response, the management divested its Americas beverage segment, which helped it to save an estimated $66 million in 2008. It now intends to reduce 15 per cent of its manufacturing and distribution centers by 2011.
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Source: onesource.com
Most of the confectionary is bought as snack food as well as gifts. But the alternative confectionary, which include savory snacks, and requires more shelf space and fruit, which has a shorter shelf life as well as other range of choices are also readily available and are bought as gifts.
Regional evaluation
North America and Western Europe incidentally has the largest sales value which account for 55 per cent of all world wide sales, with approximately 60 per cent of those sales being chocolate. The Asia Pacific has a similar sales volume as compared to Western Europe and North America, but it is of lower value because of the lesser unit price of the sugar confectionary. These are the largest markets, but the maturity of these sales channels and the depression somehow limits the potential of these sales outlets. The forecast for the developing nations markets reveals that they will increase their share of the global confectionary retail sales because these markets are untapped and there are less awareness of health related issues and the increased disposable income.
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Competitive advantage
The chocolate and confectionary industry is somehow detached but there are some large international players who include, Mars Inc, Nestle, Kraft Foods and Hershey Inc. Their products are well distinct within a category with a large investment in branding and product formulation and because of this; price flexibility is quite low, thus making the consumer loyalty to be really high. Confectionary manufacturers have little control on prices because the raw sugar and cocoa products are bought on the international commodity markets. At the same time, the differentiation of the raw materials is increasing with the continued promotion of organic and Fair-Trade supplies. Much of the cocoa-based raw material is sourced from areas which have continued political unrest, which can lead to high prices and sometimes unavailability of the same, but luckily, the cocoa production is thriving in other developing areas including the Far East, West Africa and South America. In order to reduce the risk of loss caused by price fluctuation, the confectionary manufacturers purchase equal quantities of the same or very small commodities in two markets at approximately the same time, with the expectation that a future change in price in one market will be offset by an opposite change in the other market. This is called stockpiling and hedging.
The confectionary makers represent only a small part of the buyers’ end product ranges and the vertical integration that involves the purchase of suppliers in order to reduce dependency and thus offering little attraction to the buyers. However, the economic depression and the pressure to maintain profit margins and growth, have led to the merger of commercial interests within the industry. The introduction of organic and fair-trade chocolate has now a firm foundation and has managed to showcase its successful streaks. However, this mitigating factor, of sourcing for raw materials has been only barely and adequately exploited in the gum and sugar confectionary classification. Even so, Cadbury has managed to achieve tremendous growth as compared to Mars and Nestle who have strived to at least get some growth by acquiring possession of other small firms. At the same time, Cadbury has a well balanced portfolio and wide geographic margins (see table below).

|Company |2006 |2007 |2008 |
|Mars |8.5 |8.5 |14.8 |
|Cadbury |10.0 |10.1 |10.1 |
|Nestle |7.4 |7.4 |7.6 |
|Hershey |5.2 |5.0 |4.8 |

Innovation often occurs through extension of existing products, instead of completely new introductions because of the importance of branding in the industry. The examples, the dark mild chocolate, orange and mint favored chocolate and ice cream products based on chocolate bars.
Chemical Analysis
The supermarket chains are the most important channels for confectionary, and accounted for 34 per cent of all retail sales in 2009. The route is relevant in most developed countries of the world and accounts for 43 per cent of retail sales volume. Even though, the supermarkets provide a convenient channel, the depression has made them put pressure on profit margins by demanding lower prices from the confectionary manufacturers and introducing their own brand alternatives. But the threat from private or own branded products may not be too significant. The value of this segment has however remained at 4 per cent for a number of years and the lack of growth may be related to the indulgent associations of confectionary. The small grocery retailers’ account for 29 per cent of all retail sales value and this route is particularly vital in developing markets where grocery consolidation is less than noticeable. Discounters such as Aldi and Lidi accounted for 10 per cent of retail sales volumes in 2009 and are now very strong in Europe.
Kraft Foods
Kraft Foods in which billionaire Warren Buffet, whose Berkshire Hathaway has an 8 per cent stake is the world’s second largest food company. In order to improve its financial performance, the firm established four priorities: ▪ Build a high performance organization by simplifying its structure and making decisions which are closer to the consumers. Bonus and long-term incentives are tied to revenue, operating income and cash flow measures. Business units have wide spread accountability for performance in categories and geographical areas. ▪ Reframe its product categories by concentrating on snacks, confectionary and quick meals and identifying consumer trends that drive growth which influence multiple categories such as pro-biotic cultures to support health and well being. ▪ Exploit the sales capabilities provided by a large scale sales force and strong customer relationships with world-wide customers, by having a single sales person to deal with a store and increasing penetration in the developing markets and channels. ▪ Drive down the costs without compromising quality.
Even though, Kraft primarily operates away from the U.S, it has operating branches in 70 countries. The products are sold in 150 countries and 9 of these products have brands that are worth more than $100 million and employs in the region of 98,000 people worldwide. The company has two main core businesses, namely Kraft North America, which is organized by product category, such as beverages, cheese, convenience meals, grocery, snacks and food service and Kraft International, which is organized by geographical areas of European Union and other developing markets which includes Oceania and North Asia. Three years ago, in 2008 Kraft recorded revenues of 57 per cent worth, $24 billion while Kraft International collected 43 per cent amounting to $18 billion per cent. The whole of the U.S market accounted for 52 per cent of revenues with Europe collecting 31 per cent and the rest had 18 per cent. The company has a strong portfolio of brands that are recognized both in the U.S and the rest of the world. It has also invested heavily in R&D, some $499 million in 2008 and employs 2,400 people in six technology centers all located in Europe and the U.S. It has an efficient distribution system in both its U.S, and international operations with potential for cost sharing between its various food product categories.
Mars
Mars has four core businesses, including snack food, pet care, main food and drinks. It also makes drink vending equipment and electronic automated payment systems. The company has 130 factories in 75 countries and its products are sold in over 100 countries in North America, Europe, Los Angeles, Asia Pacific, and Middle East Asia. The organization has an extensive portfolio of products and brands giving it the ability to offer a wide range of products to different markets, share activities and balance out growth in different categories. Mars is the second largest confectionary manufacturer in the USA, having 20 per cent of the market, thus giving a strong brand image.
There are two core businesses namely, the US division, Masterfoods, which is based in New Jersey and the European division, Masterfoods Europe, which has its headquarters in Belgium and the Netherlands. Being privately owned means that Mars has a higher degree of self control and less subject to the demands of external investors, but it also means that it has less access to capital investment.
Cadbury
Cadbury began its confectionary business in 1824, when John Cadbury started selling chocolate and cocoa from his shop in Birmingham. Almost two centuries later, the company is operating in over 60 countries and employs about 45,000 people and has contracted about 35,000 suppliers. The company’s vision was to be the worlds biggest and best confectionary company, with a sole objective to deliver superior shareholder returns. The priorities the company focused on were growth, striving to concentrate on fewer brands, as well as develop and deliver quickly to the market so as to create economies of scale, efficiency and capabilities to ensure world class first quality products. The areas of focus were also identified in terms of specific brands, 12 specific markets in Brazil, India, China, South Africa, Japan, USA, Mexico, UK, France, Turkey, Russia, and Australia. The focus was also set on 7 specific customers, including Wal-Mart, Tesco, Costco, Carrefour, Metro Group, Lidl, and 7-Eleven.
Even though the company was apparently driven by performance, it also termed itself as values-led and had a fixed sustainability agenda covering, promotion of responsible consumption, ensuring ethical and sustainable sourcing; prioritizing quality and safety; reducing the use of carbon, water and packaging, nurturing and rewarding employees; and investing in communities.
A huge prominence was accorded to customers’ research with over a quarter of a million people in 47 countries being interviewed to develop the pathfinder framework or trailblazer valance board. Part of the pathfinder framework is to understand the similarity between the consumers in different markets and hence facilitate a developmental path from country to country. Some of these common issues include, the indulgent and treat aspects of confectionary, that natural ingredients and practices are best for the customer and the environment; increasing awareness of healthy lifestyles and the role that confectionary related products play; quality and value are important to all customers; and awareness of the need to safeguard the planet.
The company placed great emphasis on innovation and in one such instance, it developed a centre-filled gum which managed to be used world wide and the local brands were marketed in 80 markets and generated annual revenue of $300 million. This innovation required not only the development of basic recipe and original idea, but also the methods to manufacture the end product itself.
The technology of confectionary can be quite complex and requires the knowledge of phenomena such as mouth feel, melting characteristics, elasticity of gum, flavor retention and crystallization. Providing much investment is not only the fundamental products, recipe and performance but also in nutrition, processing, packaging, transport and merchandising. In the recent years, innovation rates have doubled up and research has been concentrated in centers of excellence to speed up the focus on innovation. The intention is to have fewer innovations but with greater impact being developed quickly.
Chocolate represents the biggest category for Cadbury and accounts for 46 per cent of its revenue, with gum accounting for 36 per cent. The business is carried out on a region basis adapting to the different taste of consumers in different, markets and has the highest presence in emerging markets of any of its competitors. In the years these markets have accounted for one third of revenue and 60 per cent of revenue growth with sales growing at about 12 per cent. The firm recognizes four principle markets, including Britain, Ireland, Middle East and Africa, the Americas, Europe and Asia Pacific. Britain and Ireland are the largest with 30 per cent market share in the UK and 42 per cent in Ireland. The Americas business extends from Canada through the Caribbean and Central America to South America. The company is also really strong in Australasia with a market share of 30 per cent in Australia and 40 per cent market share in New Zealand. The total revenue by regions for the year 2008 is: Australasia 31 per cent; Americas 30 per cent; Europe 20 per cent and Asia Pacific 19 per cent.
Over the years there has been a move away from this regional structure towards one that is more categorically oriented. At the beginning of 2009, the regional structure was replaced by 7 per cent business units, which included Britain and Ireland; Middle East and East Africa; South America; Europe; Asia; and the Pacific. Each of these businesses focused on the commercial aspects of their geographical area and were supported by 7 worldwide functions. The functions were classed as either category-led; commercial; science and technology; and supply chain or corporate: HR and corporate affairs; finance and IT; legal and secretariat and strategy.
The supply chain team oversees the process from sourcing ingredients and packaging to distribution and customer care service is responsible and manufacturing facilities and warehouses. It is also responsible for quality, product safety and employee safety.
The commercial team, while in conjunction with the category team, aims to improve revenue and profit margin growth by utilizing the wider expertise of the world wide team rather than just that of the particular business team. It also acts as a key point for coordination between other businesses and functions. The science and technology team identifies the world wide priorities, coordinates science and technological activities and also facilitates knowledge management and best practice transfer. The HR and corporate team are responsible for the traditional activities of selection, recruitment and training which are coordinated to the organizations priorities and strategy.

Nestle
Nestle operates in Europe, the Americas, Asia, Oceania and Africa. The company is organized along product lines and has six divisions which include beverages, prepared dishes and cooking aids, milk products, nutrition and ice cream, pet care products, confectionary, and pharmaceutical products. Incidentally, there is a wide scope for overlap between beverages, ice cream and confectionary businesses thus making the Nestle brand portfolio really extensive and strong. The procurement of raw materials is based on type and is undertaken at either the global, regional or the local level. This somehow maximizes the buying power for the world wide used raw materials, but as well allows for local sourcing where necessary. Nestle appears to follow a multi-domestic strategy tailoring products to suit the local and regional preferences but maintaining an international standard for quality.
In 2008, Nestle established a Chocolate Centre of Excellence for R&D into premium and luxury chocolate at its factory in Switzerland. R&D capabilities are considered the best in the industry with 3500 people in 17 research centers. The focus for this research is into improving nutrition and health benefits associated with its products including vitamins, antioxidants and probiotics.
Ferrero
Ferrero is a privately owned Italy based manufacturer of confectionary products that operates primarily in Europe. It has 38 operating companies and 14 factories worldwide. Its products are distributed throughout Europe, North America, Australia, Asia and South America. The companies’ international control of operations is relatively small though, and this places it at competitive disadvantage in respect to other competitors who have more power in relation to suppliers, buyers and economies of scale. The brand recognition and equity is particularly strong, and beats IKEA and Johnson& Johnson in recent surveys, which allows premium pricing. However, recent product recalls have exposed the danger in over reliance on brand equity and further, the growth of counterfeit products is often targeted at premium brands.
Hershey
Hershey manufacturers, markets and distributes confectionary related products and sells the same in over 50 countries from its operations. It is the largest North American manufacturer of confectionary and has strong R&D capabilities. The company has a substantial amount of debt to an equity ratio of about 6.1 per cent. It is also very reliant on the US market which provides about 86 per cent of its revenue.
Lindt
Chocoladefabriken Lindt and Sprungli is a Switzerland group that produces chocolate products focused on the premium segment. It operates six manufacturing plants in Europe and two in the US while its products are sold in more than 100 countries mainly within Europe, North America and Asia. Europe and the Middle East account for about 70 per cent of revenue and the Americas about 23 per cent. Lindt has taken control of a number of stages in its value chain from directly sourcing its raw materials from farmers through manufacturing to operating its own chocolate boutiques, although a number of these have been forced to close down due to the depression. It operates an integrated global chain.
Key Trends Increasing health awareness is affecting confectionary sales with a traditional sugar-based gum, milk chocolate and boiled sweets which are considered unhealthy. However, other products are benefiting from health claims related to sugar-free and functional gum, low calorie products, probiotics and antioxidant properties of dark chocolate. While developing these products may provide value growth the loss of the important connotation must be avoided. The introduction of non-health products with claimed health related benefits into the industry has met with mixed success but remains a possible growth area that addresses health concerns about traditional confectionary. Examples of this might include flavored, chewable confectionary that incorporates vitamins and of course the well –established nicotine gum.
Concern about the growth in obesity has led to a number of governments to consider introducing legislation to restrict promotion to vulnerable groups such as children.
Innovations in confectionary industry
The world’s confectionery market is contested by a number of multinational suppliers. Among the largest are Nestle, Masterfoods, Cadbury and Hershey Foods, most of which operate in most countries of the world. Many of the leading suppliers are responsible for much of the innovation occurring in the industry, since all possess substantial budgets for R&D purposes. However, the industry also contains a number of smaller firms, some of which operate in very specific market niches and therefore place a strong emphasis on product innovation.
The global confectionery industry is continuing to grow by capitalizing on trends towards health and functional foods, exotic flavors and novel packing concepts. The confectionary market is one of the most mature food and drink sectors in the industry in tonnage and chocolate represents the largest sector value terms, with sales worth around $53.66 billion in 2003. This is equal to just over 55 per cent of the total market value. By volume, sugar confectionery such as mints, boiled sweets and toffees is the largest sector, with sales of over 7.6 million tones in 2003. The reason for this apparent discrepancy is the fact that chocolate is usually sold at higher price, whereas many forms of sugar confectionery are low-value items, particularly in the developing world.
Many confectionery markets in the more developed world have entered a period of maturity, with the growth levels having slowed significantly in the recent years. This has been particularly apparent in sectors such as chocolate and sugar confectionery, in regions such as Western Europe and North America. The reasons for the slowdown in the market growth have included growing competition from other forms of snacks such as crisps, biscuits and cereal bars as well as the demographic changes such as declining numbers of children and teenagers and the increasing negative health perceptions surrounding confectionery.
To counteract the slowdown in market growth, the world’s leading confectionery suppliers have been pursuing opportunities in the less developed regions. Some of the more notable areas include Eastern European countries and Russia, where the sheer size of the population creates an attractive potential market. Other areas of the future growth include China, India and some of the Latin America markets. In the more developed countries, the manufacturers are focusing on product innovation, which has been identified as crucial in maintaining consumer interest and thereby growing the market in the future. Many of the recent innovations in the global confectionery market can be grouped into categories. The most significant include health functional foods, flavors and packaging.
Health functional foods
Healthier confectionery now appears in many forms. In the previous years, this category was generally limited to low-fat or low-sugar lines, but it has since grown to incorporate products such as organic, sugar-free and low-carbohydrate confectionery, as well as confectionery items marketed as providing specific functional health benefits. According to the latest estimates, the world market for functional confectionery is worth over $7 billion and is still growing. One of the largest categories in the market is sugar-free confectionery. This market has experienced a period of fairly rapid growth, due to the ever increasing use of alternative sweeteners such as xylitol. Sugar-free items now account for the vast majority of chewing gum sales in many countries in over 95 per cent in markets such as Finland, Sweden and the Czech Republic. One of the world’s largest brands is Wrigley’s Extra, which has a leading position in many countries. In contrast, the share of the global market taken by regular sugared gum has declined.
Many chewing gums are now marketed as offering extra health benefits, as well as being sugar free. Some of the more common benefits include breath-freshening and tooth whitening, while gums containing stimulants such as caffeine and guarana are also available. Some gums now help to add minerals the teeth, while Airwaves from Wrigley now occupies a leading slot as a medicated confectionery brand. Elsewhere, Day gum Microtech from Perfetti Van Melle contains micro particles for the removal of plaque during the day.
Many of these trends are also apparent in sugar confectionery market. The rising popularity of breath-freshening products has contributed towards a growth in demand for mints. This trend has also resulted in the emergence of the breath-freshening strips category, as evidenced by products such as Eclipse Strips or Extra Thin Ice from Wrigley and Listerine Actives from Pfizer.
Meanwhile, some varieties of boiled sweets are now fortified with extra vitamins, typically the ACE trio, which gives them added health appeal. The Japanese sugar confectionery market contains a large number of examples of what is termed as etiquette candy, which helps to prevent halitosis.
Flavor factors
A wide variety of taste preferences exist within the confectionery market, thus creating opportunities for manufacturers across the world. The type and flavor of products favored across the world varies according to regions, and local tastes can therefore form the basis of new products that develop onto the market for the purpose of growing a brand’s sales in the short term.
One recent example of a local variation is the growth of sales in white chocolate in some European markets, at the expense of more traditional varieties such as milk and plain. This indicates a trend towards sweeter varieties of chocolate. In the sugar confectionery market, however, one of the most noteworthy trends in recent years has been the growth in sales of sour-flavored sweets, especially in the children’s sector. Consumers are also demanding confectionery with a stronger and more intense flavor.
White chocolate varieties of many popular brands have emerged in recent years. In addition Cadbury launched Dream in 2003, a white chocolate brand which has been particularly successful in the UK and New Zealand. Leading brands that have extended their market in white chocolate varieties include Maltesers from Masterfoods, KitKat and Smarties form Nestle and various lines from smaller suppliers such as Lindt and Sprungli. Other flavors have also been introduced into the chocolate market. One of the more popular is Cappuccino, which has featured in brands such as Galak and Marabou. The chocolate confectionery market has also witnessed the emergence of bars with flavors such as cola and varieties based on fruit. In the sugar confectionery market, sour flavor based around lemon, apple and pineapple have been very much in vogue of late. In the UK, the Chewits range from Leaf was extended in 2003 with Xtremely Sour varieties, providing an even more intense taste. Other major sugar confectionery brands to have been established with sour varieties include, Maynards Wine Gums form Cadbury, Starburst from Masterfoods and a number of Haribo lines. The growth in the market for medicated confectionery has also increased for flavors based around honey and menthol. Outside Europe, there is a wide diversity of sugar confectionery flavors. In Japan, for example, green tea is a frequent ingredient for sweets, while Chupa Chups developed Lychee-flavored lollipop specifically for the Chinese market a few years ago. Sugar confectionery markets in the Americas have featured the emergence of hotter sweets based around flavors such as chili, mainly to cater for the increasing Hispanic population. Hotter flavors are also apparent in the market for chewing gum. Although mint varieties dominate in most parts of the world, cinnamon remains a popular choice in the USA, as evidenced by the success of Wrigley’s Big Red flavor. Some of the more unusual chewing flavors to emerge in recent years include varieties based around fruit, as well as more exotic flavors. A chewing gum combining liquor ice and black pepper was launched in Demark during 2002, while plant extract flavors frequently appear in the Japanese market.
Confectionary packs showing Guideline Daily Amounts
In the chocolate category, pack sizes are tending to become smaller in response to economic downturn and health considerations while in sugar confectionary, category individual items are tending to be packed together to provide greater convenience. Emphasizing the source of cocoa beans is increasingly used as a way to different from private label chocolate and exotic flavors, for example, sour cherry and chili, are used for the same purpose and target connoisseur consumers. All these are intended to generate higher profit margins.
Developing global market
Cadbury buy out will give a milestone to Kraft Foods in developing markets, including India. In addition the buyout will help Kraft, besides expanding its footprint in developing markets, capitalize on population growth trends and provide scale to invest in infrastructure in key geographies.
The percentage of Kraft's net revenue from developing markets is expected to increase from 20 per cent to 25 per cent when combined with Cadbury. From Kraft Foods' perspective Cadbury gives us meaningful entry into India, one of the biggest global markets. The deal would enhance Kraft's long-term revenue growth from 4 per cent to over 5 per cent.
Through the deal, which created the world's biggest confectioner, both the companies seek to have leading positions in Brazil, Russia, India, China and Mexico. Importantly, a combination would increase scale for both companies in markets where the two do not have significant presence currently. The company’s strategy of going forward would be to focus on becoming leading snacks, confectionery and quick snacks company and to exit from the lower growth and lower margin businesses.
|Category |Forecast 2009-2010 |Forecast 2010-2013 |
|Confectionary |0.9% |2% |
|Chocolate |0.6% | |
|Sugar confectionary |1.1% | |
|Gum |1.4% | |

High growth areas are expected to be North Africa and India. High to medium growth areas are expected to be in China and Middle East Asia. Medium to low areas are expected to be South America and Eastern Africa. Low growth areas are expected to be North Africa, Central and Southern Africa and Australasia. Earlier forecasts were for 27 per cent growth but were downgraded as a result of the depression. The structure of the global confectionary industry continues to undergo changes. During 2008, Mars assumed leadership of the market with its $23 billion acquisition of Wrigley, thereby overtaking Cadbury. In addition to the recent divestment of its beverages business, Cadbury continues to widen its presence on the world stage, with the recent acquisitions having taken place in developing markets such as Turkey and Romania. Prior to the merger between Mars and Wrigley, Perfetti Van Melle had acquired rivals Chupa Chups in 2006, while both Lotte and Ulker have made major purchases within the last couple of years. Key players in the world confectionary industry provides in-depth profiles of 23 of the world’s leading confectionery manufacturers, including information such as the latest financial data, market shares by each country and recent corporate activity.

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Nestle SA Company Profile. Datamonitor July 2009
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