Sugar Confectionery in Estonia

2021 DEVELOPMENTS

Category shows signs of recovery from the negative impact of COVID-19

Since the outbreak of the COVID-19 pandemic, sugar confectionery has suffered from a sharp decline in impulse purchases by consumers in Estonia. With consumers spending more time at home, socialising less, and cutting their spending to deal with the economic uncertainty that accompanies the COVID-19 crisis, sugar confectionery saw only low retail volume growth in 2020.

Power mints drives volume growth as consumers switch from boiled sweets

Power mints is expected to be the top performing retail volume growth category in sugar confectionery in 2021 thanks to its perception as being a healthier option than boiled sweets. Power mints is expected to be a key driver of growth in sugar confectionery as a whole in 2021, as consumers are switching from boiled sweets, which have a negative health perception due to high sugar content, to power mints.

Companies delay new product development

Following the outbreak of the COVID-19 pandemic in 2020, many companies in sugar confectionery postponed or cancelled new product launches in order to prioritise their spending and investment during the more difficult economic conditions of the health crisis. As such, there was very little product innovation in 2020.

PROSPECTS AND OPPORTUNITIES

Healthy eating trends to become an important factor in sugar confectionery

While consumers may gravitate towards cheaper, high-sugar comfort foods in the short-term due to the impact of COVID-19 and the economic recession, it is likely that health will continue to play an important role in determining the success of sugar confectionery brands into the forecast period. As Estonian consumers become more aware of the health risks of a high-sugar diet, they are likely to increasingly turn away from sugar confectionery that does not attempt to mitigate these negative side effects.

Toffees, caramels and nougat benefit from nostalgia as consumers rediscover traditional favourites

Over the forecast period, toffees, caramels and nougat is expected to lead retail current value growth, with growth expected to peak in 2024. This product area is expected to benefit from a sense of nostalgia amongst the Estonian population for more traditional products in sugar confectionery.

Premium products may struggle in the short term as consumers remain price sensitive

As Estonia finds itself hit by economic recession in the face of COVID-19, the cheaper, more accessible brands look set to increase their share in the near forecast period as consumers turn to more affordable and convenient brands such as Haribo and Kalev AS. While in recent years, sugar confectionery had been venturing into more premium, gourmet and hand-made production niches, especially among small businesses, this growth has been stunted by the COVID-19 pandemic.