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    Breaking News

    Brazilian Market for Gum and Sweets on the Upswing

    As Brazilian consumers develop a more sophisticated sweet tooth, Mintel has found that the sugar and gum market in Brazil has topped the $5 billion USD barrier.

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    02.06.13

    New research from Mintel has valued the Brazilian confectionery market at $5.13 billion USD in 2011, up from $4.13 billion USD in 2007 and estimated it to grow even further to $10.43 billion USD to the end of 2012. And it’s a sweet outlook for the future of the sector too, as Mintel forecasts market revenue to grow at a rate of 5% a year, annual growth peaking at 6% in 2014 and 2016, when the World Cup and Olympic Games will take place.  Furthermore, by 2017 the market is set to reach a mouthwatering $7 billion USD. While value sales continued to grow, volume levels have remained stable, at an average of 260 thousand tons a year from 2007 to 2011.

    And it seemed health and wellness were high on the consumer agenda as, simultaneously, 64% of consumers said they preferred confectionery made with natural juices, highlighting another area ripe for more innovation. However, natural products represented a small proportion of category launches, highlighting potential for more NPD in this area - as just 2% of new sugar confectionery launches in Brazil carried an “all natural product” claim in 2011.

    “Over the past five years, the confectionery market has shown fast revenue growth against stable growth for sales volume,” said Jean Manuel Gonçalves da Silva, senior Mintel food analyst. “Apart from raw material price increases, in sugar in particular, the market was also boosted by a better product offering. Higher quality and more expensive sugar confectionery and gum products have been developed - which, coupled with increased income from Brazilian consumers and a desire for innovation - have really boosted the market over this period.”

    The demand for more sophisticated products has been catered for by both imported and products made in Brazil alike. The volume of importation grew 40% between 2007 and 2011, while in value, importation has nearly tripled over the same period of time, highlighting the shift towards more expensive products in Brazil. Around $5 million USD confectionery products were imported to Brazil in 2007 - this figure jumped to $15 million USD by 2011.

    The average price of confectionery also grew 23% over the past five years, from $16.61 USD a kilo in 2007 to $20.63 USD in 2011. Mintel data reveals that chocolates followed this trend with 20% average price increase over this period (from $11.07 USD a kilo in 2007 to $13.08 USD), as did biscuits, with a 28% average price increase in the category, growing from R$3.52 USD a kilo in 2007 to $4.53 USD a kilo in 2011.

    The report also reveals that Brazilians are open to new flavors and products, especially consumers aged between 16 and 24 years old. Indeed, 76% of Brazilian consumers in this age group claim that they like to try new kinds of gum and sugar confectionery.

    “The growth on raw materials has triggered innovation and reformulation in the sugar and gum category in Brazil. As a result of this, items with more flavor appeal have been developed in order to justify price increases - and there seems to be big demand among Brazilian consumers to purchase this new product development,” says Jean Manuel Gonçalves da Silva.

    The research also highlighted how, on the whole, confectionery was more frequently consumed than gum. Some 40% of Brazilians tended to consume sugar confectionery at least once a week, while 30% consume gum with the same frequency. In addition, both sectors were consumed more frequently by younger consumers than older consumers, but this difference was much more pronounced in the gum segment than in the sugar confectionery sector. There, some 55% of those aged 16 to 24 years old consume gum at least once a week, compared to 9% of those aged over 55. Indeed, chewing gum in particular struggles to maintain usage among older consumers. Mintel’s research found that only 14% of those aged between 45 and 54 years old chew gum at least once a week, compared to 23% of the same group who enjoy sugar confectionery on a weekly basis. But it is not just the young who are particularly keen on gum; it seemed that those consumers on higher income tend to have a particular penchant for chewing gum. Today, 43% of better off ABC1 consumers said that they consume gum or chewing gum at least once a week, compared to 36% of lower income consumers of the C2DE classes.

    According to Mintel´s Global New Product Database (GNPD), new sugar confectionery and gum product launches in Brazil have grown nearly 40% from 2007 to 2011, while in the USA, launches have dropped by nearly 50% in the same period of time.

    “The popularity of new lines of sugar confectionery and chewing gum, either with new products or new varieties, means Brazil is an ideal market for confectionery NPD. There’s a constant move towards innovation in Brazil, indicating that success is related to ongoing development, where products are always focused on quality and responding to consumer demand,” said Mr. Gonçalves da Silva.

    In the gum category, sugar free gum represented an important segment of the market, accounting for around 44% of all Brazil gum volume sales in 2011. Consumer attitudes in Brazil supported this, with over half (52%) of consumers saying they would buy more gum if it had no sugar. The majority of consumer demand for this came from those aged between 35 and 44 years old, with some 46% of this age group saying that they bought sugar free chewing gum in the last 12 months, presenting growing business opportunities within this demographic.

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