Innovation and brand loyalty are keeping the industry’s revenue growing
Melbourne, Australia (PRWEB) May 13, 2012
The Australian Chocolate and Confectionery Manufacturing industry has remained resilient despite a recessive economy, falling disposable incomes, volatile commodity prices and increasing import competition. The advent of the health-conscious consumer has required producers to be innovative with their product lines and adapt them to changing consumer trends. In the five years through 2011-12, industry revenue increased at an annualised 2.2%. Revenue growth is also expected to grow by 2.2% in 2011-12 to $3.09 billion. According to IBISWorld industry analyst Naren Sivasailam, “The high level of value addition during the production process has enabled the industry's major players to maintain high profit margins and perform well despite recessive economic conditions”. High brand and customer loyalty commanded by the major players have also contributed to high profit margins and sales growth. The volatility of key inputs such as cocoa and sugar has resulted in strong import growth, as producers have resorted to foreign markets to source their products.
As economic conditions improve, IBISWorld expects sustained consumption of chocolate and confectionery. Sivasailam adds, “Consumers will choose to indulge themselves with inexpensive, feel-good luxuries such as candy in an attempt to ease more pressing concerns such as mortgage or loan repayments”. Strong brand loyalty, product innovations and aggressive marketing strategies will drive growth as the economy grows from strength to strength following the global financial turmoil. IBISWorld forecasts that industry revenue will increase over the next five years.
The Australian Chocolate and Confectionery Manufacturing industry is characterised by a high level of market share concentration. Although the industry has a number of small- to medium-size operators, the majority of its revenue is generated by the major players: Kraft Foods, Nestle and Mars. This concentration of ownership is due to an increase in acquisitions and organic growth for the major players through continued product innovation, strong brand loyalty and aggressive marketing.
For more information, visit IBISWorld’s Chocolate and Confectionery Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry consists of establishments mainly engaged in manufacturing confectionery, chocolate or cocoa products, with or without sugar. Chocolate is produced from roasted ground cacao beans that are combined with other ingredients like milk and sugar. Cocoa is a powder produced from cocoa seeds that have been roasted, shelled, and ground. Sugar confectionery is produced by boiling, crystallising, and moulding sugar or molasses into solid pieces that are usually coloured or flavoured.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.