Confectionery in Singapore

Prospects

Indulgence remains relatively unscathed by government’s war on diabetes

In Singapore, the consumption of chocolate is affected by the extent to which consumers allow themselves to indulge. Although the government is pushing to reduce sugar consumption amongst Singaporeans, categories that are intended for indulgence such as chocolate confectionery appear to be less affected compared to other snacks.

Players must carefully balance offers to include variety of consumer segments

This shift in lifestyles towards more premium flavours is supported by the growth in GDP per capita amongst Singaporeans. However, there will be a portion of the population that is deterred by the increasing prices of chocolate confectionery, and manufacturers and distributors need to be careful to balance their focus on premium products with the demands of the price-conscious segment of Singaporean consumers.

Chocolate confectionery offers “more for less” approach

To cater to price-conscious consumers, certain manufacturers are choosing the affordable premium approach instead – their products offer greater value, but may not necessarily target the premium segment or contain exotic flavours. For instance, Kit Kat Tiramisu Duo and Cadbury Dark Milk Chocolate are both products that are marketed to contain a blend of flavours within each product or pack size.

Competitive Landscape

Decisive point to determine the leaders of chocolate confectionery in Singapore

Ferrero SpA is an example of a manufacturer whose affordable premium strategy has succeeded in the past. Ferrero Rocher, for instance, is a value-for-money product that has become a well-known part of the gifting culture present in Singapore, which has in turn created brand loyalty and repeat purchases.

Prospects

Gum prohibition in Singapore cause problems for category

In accordance with the Regulation of Imports and Exports Act, it is prohibited to import chewing gum into Singapore. The sole exception to the regulation is the import and sales of gum with therapeutic value – an agreement that was made under the US-Singapore Free Trade Agreement in 2004.

Uphill struggle for gum in Singapore over the forecast period

Educating consumers about the uses and benefits of therapeutic gum will prove to be an uphill task, given that it may be problematic to change the perception of gum consumption amongst Singaporeans. Furthermore, the restriction against the import and sales of gum is unlikely to change over the forecast period.

Competitive Landscape

Chewing gum continues to be dominated by Orbit

Orbit continues to be the leading brand within chewing gum in Singapore. Given the difficulties in generating demand for chewing gum in Singapore, the lack of depth has deterred potential brands from entering.

Gum must offer new attributes to be attractive

Over the forecast period, it is unlikely that any new brands will attempt to enter gum in Singapore. Sugar-free chewing gum with xylitol is expected to be the dominant type of therapeutic chewing gum made available in Singapore, and a lack of consumer interest in the category will lead to a further decline in sales, until the level of therapeutic chewing gum consumed normalises – this will be defined by a very small group of consumers who have grown to purchase therapeutic chewing gum habitually.

Prospects

Government’s war on diabetes biggest deterrent for sugar confectionery sales

The effects of the government’s continued emphasis on the reduction of sugar consumption amongst Singaporeans in 2016 and 2017 increased their awareness of diabetes. These consumers are being more selective regarding their sugar intake – they are avoiding the consumption of products that are perceived to be high in sugar but do not offer the same type of satisfaction as indulgent categories such as boiled sweets, and pastilles, gums, jellies and chews.

Refreshing confectionery for consumers with hectic lifestyles

Singapore’s GDP per capita is set to grow in 2018, and consumers are expected to continue to lead fast-paced lifestyles to afford their high standard of living. As a result, on-the-go consumption and impulse purchases will continue to be prominent – consumers will look to convenient solutions to keep refreshed and to sustain them throughout the day.

Competitive Landscape

Positioning may influence difference between sour profits and sweet victory

Mars Foods Inc, Ricola Asia Pacific Pte Ltd, Lofthouse of Fleetwood Ltd, and Perfetti Van Melle Asia Pacific Pte Ltd led sugar confectionery in 2018, supported by habitual consumption and brand loyalty by Singaporeans. Although growth in sugar confectionery remains positive, boosted by new product launches such as Ricola Natural Relief Extra Menthol Swiss Mint, and Mentos Fruit Fusions, it has slowed compared to the review period years, and the government’s emphasis on reducing sugar consumption threatens to stifle any positive growth by discouraging purchases in the category in general.

Labelling to play important role in educating consumers

Players have made efforts to remain relevant within the category, but the strategic focus may need to shift towards repositioning their products over the forecast period to rejuvenate sales. If consumers begin to perceive mints and medicated confectionery as sugar-heavy products as well, the positive growth originally projected for them could quickly turn into decline.

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