Many traditional grocery retailers operated shorter hours during the lockdown in 2020, while many children were restricted from going outdoors and schools and recreational areas were closed. This had a negative impact on products with a focus on impulse purchases, such as boiled sweets, mints, and lollipops.
Sugar confectionery remains the dominant area of confectionery in Pakistan in 2021 with it benefiting from its wide variety of product options, lower price points and year-round availability. Boiled sweets remained one of the most popular categories with these products benefiting from regular new flavour innovations that help to hold the attention of children and adults alike.
The government doubled its sugar tax in the 2020 Federal Budget with this putting additional pressure on producers of sugar confectionery, which had already experienced increased costs in 2019 as a result of higher transportation, fuel costs and commodity prices following the currency devaluation. While the obvious answer would be to pass these costs onto the end consumer this is not really a viable option when it comes to sugar confectionery due to the fact these products are primarily targeted at children.
Ismail Industries will likely continue to hold a strong lead in sugar confectionery over the forecast period and could even further extend its lead. With over 30 brands, the company’s umbrella brand Candyland enjoys immense brand equity and consumer trust.
Independent small grocers is expected to retain its position as the leading distribution channel for sugar confectionery over the forecast period, with these outlets benefiting from the fact that these products are typically impulse purchases. Nonetheless, the outbreak of COVID-19 served as a push towards e-commerce, with the online channel having the potential to see further gains over the forecast period.
Low pricing is important in sugar confectionery, in order to maintain its appeal to children. Consumers of sugar confectionery are highly price sensitive, with children spending their pocket money carefully on a variety of alternatives in sugar confectionery and other snacks.
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This report originates from Passport, our Sugar Confectionery research and analysis database.
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