The Confectionery report describes the sector in South Africa, discusses current conditions and factors influencing the success of the industry. Twenty-one companies are profiled, including the multinational confectionery manufacturers and importers, as well as Kees Beyers Chocolate, the largest local manufacturer of chocolate products which acquired the Sweetie Pie brand in 2013. Also profiled are small artisanal confectioner, DV Chocolate which manufactures branded chocolate for Woolworths, and micro-enterprise Shooga Shooga, which manufactures and wholesales sugar confectionery.
The Confectionery Sector
This report focuses on the South African confectionery sector which analysts estimate is growing at a compound annual growth rate (CAGR) of 2.4%, giving an industry value of between R12.4bn and R13.5bn. Chocolate confectionery, valued at R6bn, is dominated by three multinational companies, Mondelez South Africa, Tiger Brands and Nestlé, while sugar confectionery manufacturers include Lodestone Brands which manufactures Candy Tops sweets, Trade Kings, a Zambian company which expanded into South Africa in 2005, and Manhattan, which has been owned by Premier Foods since May 2013. Although there are no confirmed figures, the sale of sweets by spaza shops and informal traders is considered to be substantial.
Opportunities and Challenges
The market share of the largest three chocolate companies is being eroded by imported brands and from the growing number of niche, artisanal chocolatiers who have entered the industry. Market share for the big three dropped from approximately 73% in 2013 to 68% at the end of 2015. However, despite tough economic conditions, growth of up to 15% has been forecast for the premium confectionery segment which is currently dominated by imported brands Lindt and Ferrero Rocher. Stakeholders believe there are also opportunities in the lower end of the market where smaller more affordable package sizes are being sold, often by hawkers and other informal traders.