In 2017, for the fourth consecutive year, the consumption of chocolate confectionery decreased in retail volume terms. The poor performance of general consumption due to the complicated economic situation negatively impacted impulse categories in 2013-2017, and chocolate confectionery was no exception.
Over the review period, the average price of chocolate confectionery increased below general inflation, based on inflation growth rates estimated by economists and specialist consultants in the first year of the review period, given the low credibility of official statistics. Companies’ strategy has been to increase prices as little as possible to avoid deepening the decrease in volume sales.
The existing offer of HW chocolate confectionery is very limited and practically insignificant in Argentina. Over the review period, there were significant launches of rice-based products coated in chocolate, such as the Gallo brand by Molinos Río de la Plata SA in countlines.
Arcor SAIC strengthened its dominance of chocolate confectionery in 2018 due to its renewed product portfolio. The company has a broad variety of brands in the low- and mid-priced segments of all categories of chocolate confectionery and stands out with constant launches renewing its portfolio.
Other grocery retailers is, by far, the most important sales channel for chocolate confectionery. This is explained because there are highly numerous kiosks nationwide.
Countlines registered the best performance in retail volume terms over the review period. This was due to the strong competition in countlines since the launch of the famous Kit Kat brand by Nestlé Argentina SA in March 2015.
Consumption of chewing gum is stagnant. The situation could be worse if not for the constant launches and innovations that are aimed to boost sales.
Volume sales of gum continue to decline and seem not to reach a minimum level despite companies’ efforts to reactivate consumption. The main problem is that children’s interest in bubble gum has decreased as their preference for other impulse products has grown.
Gum products are principally sold through other grocery retailers (the highly numerous kiosks) in Argentina. The second most important channel for gum is food/drink/tobacco specialists, which is followed by forecourt retailers, although the level of sales via the latter is very small compared with kiosks and food/drink/tobacco specialists.
Mondelez Argentina SA continues to dominate retail value sales of gum because of the long tradition of brands such as Beldent in sugar free gum and Bazooka and Bubbaloo in bubble gum. While Beldent has its origins in the 1980s, Bazooka dates back to the 1950s.
L’Heritier Argentina SA debuted in bubble gum with the brand, Pico Dulce, at the beginning of 2018. The brand has a long tradition in lollipops and has taken advantage of this to enter bubble gum as well as other categories such as pastilles, gums, jellies and chews.
Perspectives of gum consumption over the forecast period are not very encouraging. It is expected that sales of bubble gum will continue decreasing, unable to be offset by the anticipated growth in chewing gum.
Sales of impulse products strongly correlate to the economic situation in Argentina and sugar confectionery is no exception to the rule. In the review period, the difficult economic context had a negative impact on sales of sugar confectionery.
Consumers are becoming increasingly conscious of the benefits of consuming healthy products, and companies are launching different options to satisfy the demand for healthy sugar confectionery products. In August 2017, the dominant player, Arcor SAIC, launched Arcor Stevia in boiled sweets.
Until late 2015, marshmallow confections, within other sugar confectionery, was completely unknown to the large majority of Argentinians. However, the product is a favourite among children and teenagers that have travelled abroad.
Arcor SAIC is, by far, the most important company in sugar confectionery in Argentina. It is one of the world’s leading producers of sugar confectionery.
In 2017, investments in marketing campaigns played a key role in the communication of new products as well as a strategy to boost sales. Undoubtedly, Arcor SAIC is the company with the highest investment in publicity, notably for Mogul Marshmallow in other sugar confectionery.
Several countries in the region, including Argentina, are analysing the possibility of limiting sales of certain products in kiosks, mainly those which are high in fat and sugar. In 2008, National Law 26,396 was approved.
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