Executive Summary

Aug 2019
Prospects
EU sanctions result in widening range of Russian products

Chocolate confectionery is one of Azerbaijani consumers’ favourite sweet products, and the variety of such products of Russian origin in Azerbaijan is increasing. This is as a result of continued sanctions against Russia imposed by the EU.

Interest in new flavours in seasonal chocolate, but investment is needed to extend demand through the year

Sales of seasonal chocolate saw growth in 2019, as consumers demonstrated greater interest in innovative products offering specific flavours, such as pepper/chilli chocolate, mint chocolate, and others. Demand for flavoured chocolate grew as consumers experimented with new tastes; however, the overall share of flavoured chocolate confectionery remains low.

Consumers shift to domestic products when import prices rise due to exchange rate

The average unit price depends on the currency exchange rate, as the vast majority of chocolate confectionery are imported. While Russian products tend to be cheaper due to their local production, they are perceived as being of lower quality than imported offerings, particularly Western brands.

Competitive Landscape
Regional players may gain share following EU- and US-imposed sanctions on Russia

Chocolate confectionery will continue to be controlled by international companies, as they have the power to absorb price changes arising from exchange rate fluctuations, and can appeal to consumers with a wide variety of products. However, Russian players have good prospects to expand shares in Azerbaijan as a result of sanctions imposed on that country by the EU and the US, which will encourage these players to focus on growing sales in non-EU countries such as Azerbaijan.

Kross maintains lead with wide-ranging portfolio of strong international brands

Kross Ltd remained the category leader in 2019, and saw a slight increase in value share, increasing the gap between itself and second-placed Mondelez International Inc. Kross benefits from being the official local distributor of Mars’ brands, offering a variety of globally famous brands, such as Snickers, Mars, Twix, Bounty and others, coupled with its long-standing presence in Azerbaijan.

Modern grocery retailers gain popularity, but private label still not present

Modern grocery retailers grew rapidly in Azerbaijan over the review period, fuelled by growth in the number of outlets and reshaping of the retail landscape towards convenience stores, supermarkets and hypermarkets. The rapid emergence of modern grocery retailers has contributed to increasing sales of chocolate confectionery, promotions implemented by players in the category, and recent new launches.

Prospects
Gum benefits from wide-ranging promotional support, and increased awareness of oral health benefits

Gum is predicted to continue growing positively in coming years. Chewing gum is set to lead value and volume sales, as it is considered a healthier option than bubble gum.

Modern grocery retailers increase availability, and offer competitive prices

Consumers’ improved financial position at the end of the review period resulted in them experimenting with new products to experience various gum tastes. Bubble gum continued to evolve due to a resurgence of the nostalgia trend.

Rising consumer spending power and appeal of bulk packs set to underpin growth

Over the forecast period, gum is expected to see continued steady growth in Azerbaijan. The category’s performance will be underpinned by the improving financial positions of local consumers, and the further development of modern retailing.

Competitive Landscape
Love Is bubble gum given as a romantic gift between cash-strapped teenagers

Bubble gum includes giant global brands such as Mondelez International’s Love Is, Turbo and Toybox, as well as cheap Turkish and Chinese brands. Love Is and Turbo have been familiar to Azerbaijani consumers since the 1990s, as they have in all post-USSR countries.

Orbit largely maintains strong review period share gain thanks to attractive pricing

Orbit maintained its lead of the gum category at the end of the review period. While Orbit saw a slight drop in share in 2019, following a surge in 2018, the brand’s recent impressive gains were largely maintained, with these occurring mainly at the expense of United Brands’ Dirol.

Modern grocery retailers benefit from offering wide range and competitive prices

The rapid development of modern retailing helped control price rises in recent times, with a shift in the retailing landscape towards modern grocery retailers, a channel comprising supermarkets, convenience stores, forecourt retailers and hypermarkets. With their wide range of products and competitive prices, this channel is increasingly appealing to consumers.

Prospects
Sugar confectionery benefits from rising incomes, but faces competition from chocolate confectionery

Development of the economy is positively impacting sugar confectionery sales, boosting demand for more sophisticated products such as toffees, caramels and nougat, medicated confectionery and power mints. However, the main products in this category remain unpackaged sugar confectionery offerings such as halva and kozinaki.

Medicated confectionery benefits from increased availability via modern grocery

Medicated confectionery will be the smallest category in Azerbaijan over forecast period, despite rising spending power and increasing health awareness among consumers. This category is fully dependent on imported products.

Boiled sweets to see lower growth due to maturity and competition from alternative products

Boiled sweets will continue to dominate sugar confectionery in volume and value sales over the forecast period. Products in this category are available to all customers regardless of income group, and are sold through all retail channels.

Competitive Landscape
Strong players with capacity to invest in advertising and promotional support maintain lead

The top brands in sugar confectionery are from international and global companies such as Perfetti Van Melle Group, Udarnitsa KF OAO, Konti Group, and Mars Inc. Local companies have lower levels of financial support to invest in advertising their products and to ensure space on retail shelves.

Consumer awareness of sugar intake impacts demand

The main suppliers of sugar confectionery products are Russian and Ukrainian players. Local sweets are orientated towards traditional products such as kozinaki, halva, and boiled sweets.

Local brands remain insignificant while private label struggles due to limited distribution

Private label has a marginal share in the sugar confectionery environment, as modern retail is still concentrated in major cities. However, such products may gain share in coming years as modern grocery retailers attract an increasing number of consumers and continue to expand store networks.

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Confectionery in Azerbaijan

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Overview

Discover the latest market trends and uncover sources of future market growth for the Confectionery industry in Azerbaijan with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Confectionery industry in Azerbaijan, our research will save you time and money while empowering you to make informed, profitable decisions.

The Confectionery in Azerbaijan market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Confectionery in Azerbaijan?
  • What are the major brands in Azerbaijan?
  • With economic recovery far from guaranteed, are consumers cutting back on impulse and indulgence food items like confectionery?
  • How are manufacturers addressing consumer concerns over health and obesity?
  • What does the future hold for ethically sourced products?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

Confectionery in Azerbaijan - Category analysis

Chocolate Confectionery

HEADLINES

PROSPECTS

EU sanctions result in widening range of Russian products
Interest in new flavours in seasonal chocolate, but investment is needed to extend demand through the year
Consumers shift to domestic products when import prices rise due to exchange rate

COMPETITIVE LANDSCAPE

Regional players may gain share following EU- and US-imposed sanctions on Russia
Kross maintains lead with wide-ranging portfolio of strong international brands
Modern grocery retailers gain popularity, but private label still not present

CATEGORY DATA

Table 1 Sales of Chocolate Confectionery by Category: Volume 2014-2019
Table 2 Sales of Chocolate Confectionery by Category: Value 2014-2019
Table 3 Sales of Chocolate Confectionery by Category: % Volume Growth 2014-2019
Table 4 Sales of Chocolate Confectionery by Category: % Value Growth 2014-2019
Table 5 Sales of Chocolate Tablets by Type: % Value 2014-2019
Table 6 NBO Company Shares of Chocolate Confectionery: % Value 2015-2019
Table 7 LBN Brand Shares of Chocolate Confectionery: % Value 2016-2019
Table 8 Distribution of Chocolate Confectionery by Format: % Value 2014-2019
Table 9 Forecast Sales of Chocolate Confectionery by Category: Volume 2019-2024
Table 10 Forecast Sales of Chocolate Confectionery by Category: Value 2019-2024
Table 11 Forecast Sales of Chocolate Confectionery by Category: % Volume Growth 2019-2024
Table 12 Forecast Sales of Chocolate Confectionery by Category: % Value Growth 2019-2024

Gum

HEADLINES

PROSPECTS

Gum benefits from wide-ranging promotional support, and increased awareness of oral health benefits
Modern grocery retailers increase availability, and offer competitive prices
Rising consumer spending power and appeal of bulk packs set to underpin growth

COMPETITIVE LANDSCAPE

Love Is bubble gum given as a romantic gift between cash-strapped teenagers
Orbit largely maintains strong review period share gain thanks to attractive pricing
Modern grocery retailers benefit from offering wide range and competitive prices

CATEGORY DATA

Table 13 Sales of Gum by Category: Volume 2014-2019
Table 14 Sales of Gum by Category: Value 2014-2019
Table 15 Sales of Gum by Category: % Volume Growth 2014-2019
Table 16 Sales of Gum by Category: % Value Growth 2014-2019
Table 17 NBO Company Shares of Gum: % Value 2015-2019
Table 18 LBN Brand Shares of Gum: % Value 2016-2019
Table 19 Distribution of Gum by Format: % Value 2014-2019
Table 20 Forecast Sales of Gum by Category: Volume 2019-2024
Table 21 Forecast Sales of Gum by Category: Value 2019-2024
Table 22 Forecast Sales of Gum by Category: % Volume Growth 2019-2024
Table 23 Forecast Sales of Gum by Category: % Value Growth 2019-2024

Sugar Confectionery

HEADLINES

PROSPECTS

Sugar confectionery benefits from rising incomes, but faces competition from chocolate confectionery
Medicated confectionery benefits from increased availability via modern grocery
Boiled sweets to see lower growth due to maturity and competition from alternative products

COMPETITIVE LANDSCAPE

Strong players with capacity to invest in advertising and promotional support maintain lead
Consumer awareness of sugar intake impacts demand
Local brands remain insignificant while private label struggles due to limited distribution
Summary 1 Other Sugar Confectionery by Product Type: 2019

CATEGORY DATA

Table 24 Sales of Sugar Confectionery by Category: Volume 2014-2019
Table 25 Sales of Sugar Confectionery by Category: Value 2014-2019
Table 26 Sales of Sugar Confectionery by Category: % Volume Growth 2014-2019
Table 27 Sales of Sugar Confectionery by Category: % Value Growth 2014-2019
Table 28 Sales of Pastilles, Gums, Jellies and Chews by Type: % Value 2014-2019
Table 29 NBO Company Shares of Sugar Confectionery: % Value 2015-2019
Table 30 LBN Brand Shares of Sugar Confectionery: % Value 2016-2019
Table 31 Distribution of Sugar Confectionery by Format: % Value 2014-2019
Table 32 Forecast Sales of Sugar Confectionery by Category: Volume 2019-2024
Table 33 Forecast Sales of Sugar Confectionery by Category: Value 2019-2024
Table 34 Forecast Sales of Sugar Confectionery by Category: % Volume Growth 2019-2024
Table 35 Forecast Sales of Sugar Confectionery by Category: % Value Growth 2019-2024

Packaged Food in Azerbaijan - Industry Overview

EXECUTIVE SUMMARY

Azerbaijan’s improving economy renews consumer interest in packaged food
Packaged food is increasingly enticing customers
Domestic producers are first for staple packaged food
The modern way of shopping goes hand in hand with packaged food
Modern retail and higher incomes will make packaged food more affordable

FOODSERVICE

Sales to Foodservice
Forecast period is set to improve on the review period as confidence in the economy returns
Domestic suppliers benefit from affordable prices for staples as consumers remain price-sensitive
Sizzling summers make more consumers turn to ice cream and frozen desserts for refreshment

CATEGORY DATA

Table 36 Foodservice Sales of Packaged Food by Category: Volume 2014-2019
Table 37 Foodservice Sales of Packaged Food by Category: % Volume Growth 2014-2019
Table 38 Forecast Foodservice Sales of Packaged Food by Category: Volume 2019-2024
Table 39 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2019-2024

MARKET DATA

Table 40 Sales of Packaged Food by Category: Volume 2014-2019
Table 41 Sales of Packaged Food by Category: Value 2014-2019
Table 42 Sales of Packaged Food by Category: % Volume Growth 2014-2019
Table 43 Sales of Packaged Food by Category: % Value Growth 2014-2019
Table 44 GBO Company Shares of Packaged Food: % Value 2015-2019
Table 45 NBO Company Shares of Packaged Food: % Value 2015-2019
Table 46 LBN Brand Shares of Packaged Food: % Value 2016-2019
Table 47 Distribution of Packaged Food by Format: % Value 2014-2019
Table 48 Distribution of Packaged Food by Format and Category: % Value 2019
Table 49 Forecast Sales of Packaged Food by Category: Volume 2019-2024
Table 50 Forecast Sales of Packaged Food by Category: Value 2019-2024
Table 51 Forecast Sales of Packaged Food by Category: % Volume Growth 2019-2024
Table 52 Forecast Sales of Packaged Food by Category: % Value Growth 2019-2024

SOURCES

Summary 2 Research Sources