Industries Post Lockdown: Confectionery

September 10, 2020

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The first of a series of articles dedicated to finding out the effect that COVID-19 has had on different industries starting with confectionery.

 The past few months have been filled with uncertainty for many industries around the world but one trend has been accelerated, eCommerce. Most businesses have now been forced online to keep up with the demand, and delivery of basics like food has become a necessity. For the confectionery industry, it has been a bit of a rollercoaster ride. 

Industry Winners

With the global confectionery market expected to reach $69.5bln now by 2026 growing at 4.3%, there is no doubt Covid-19 period has accelerated its growth. Chocolate might not be an essential item, but it is a source of indulgence and comfort that consumers look for in times of uncertainty. The chocolate market is expected to survive the pandemic without too much damage but smaller confectionery businesses have been forced to make bigger strides with online sales. 

To help smaller businesses reach their eCommerce goals, Stay Home with Chocolate was created. It uses online tools, such as live tastings and e-commerce to support small businesses offering high-quality and ethical chocolate products. Stay Home with Chocolate’s online events in March. May and June have also massively helped confectionery businesses to stay connected with the industry. 

In the UK chocolate and confectionery firm Hames have found a way to deal with the setbacks of coronavirus by pausing production which allowed them to plan for the future. Their Lincolnshire factory was closed for 3 weeks during the pandemic and even when staff returned, it was only essential staff. During the first few weeks, 98% of Hame’s customer base was temporarily closed. As a result of such a dramatic change, they had to make the decisions quickly to future proof the business. The defining decision being to invest in new equipment to make them more efficient, increasing the amount they can produce and opening new potential revenue streams.   

Industry Strugglers

Whether it’s starting a new hobby or carrying on a fitness regime lockdown has proved to be useful for those seeking a healthier lifestyle. This COVID health kick was very much backed by the government who allowed the public to venture out of their homes for exercise throughout the pandemic. With this came a new mentality when it came to buying and eating food. The public decided they would eat healthier as this would lessen their chances of catching coronavirus and who would blame them. This did, however, have a small yet damaging effect on the confectionery industry. Gum and breathe freshener sales dropped by 11.8%, whilst gift box chocolate sales took an 8.4% blow.  It’s not all doom and gloom however as sales are expected to rise as normal for the Christmas rush, which is said to be starting earlier this year as people panic buy with fears of another lockdown. 

While sales figures for most are a measure of success, others in the events side of confection have also taken a massive hit. Cancellations to confectionery events worldwide have resulted in huge losses and while some have gone virtual others are struggling to stay afloat. 

One of the bigger UK confectionery businesses to feel the squeeze after the pandemic has been the high street chocolatier Thorntons. The brand’s sales dropped by 9.5% to £122.3million. Like so many other brand’s, Thorntons have had no choice but to adhere to the restrictions from the pandemic and the change in consumer behaviour. With restrictions continuing to play a part in peoples lives, Thornton’s must adapt to the ‘new normal’ if they are to keep their standing as a high street brand.  

To Sum it up 

It doesn’t take much to get a feel for the lasting impact that coronavirus has had and is still having on various industries across the world. The confectionery industry is no different with winners and losers across the board. The light at the end of the tunnel for this industry is, of course, the inevitable Christmas rush, let’s hope it lives up to its reputation...  

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