For the year 2020, the Association of the German Confectionery Industry (BDSI) can look back on a widely stable development for the industry and its delicious products both in terms of sales and turnover. The production volume was on a par with the previous year level (0.0%), whereby the turnover decreased by 0.5%. However, the statistical data obscures the view of the economic situation in the industry, which is clearly under strain and which was furthermore affected by the pandemic in very multifaceted and differentiated ways. For example, the significantly increased costs the companies are having to deal with during the ongoing coronavirus crisis and uncertainties in the vital export business are facing Germany's over 200 industrial manufacturers with enormous challenges. The number of employees displayed negative growth and fell by 1.6% for the first time in years.
Coronavirus crisis is a strain on the companies
Germany's entire economy was affected strongly by the Corona crisis in 2020. The overall business situation of the German sweets industry that is characterised by medium-sized companies has deteriorated due to the coronavirus crisis compared to the pre-Corona period. Although the sweets turnover generated by the German retail food trade rose, this growth was however not able to make up for the losses from the export sector and important sales channels such as travel retail or folk festivals and Christmas markets. The long-lasting contact restrictions also led to a lack in important gift-giving occasions for the sweets industry.
The sweets manufacturers did their very utmost to keep the production up and running throughout the entire Corona crisis and thus on the one hand secure the consumers' provision with coveted, delicious products and on the other hand preserve jobs within the companies. However, the sweets industry is also suffering under the current economic conditions:
- Challenges due to the huge increases in the costs caused among others by the implementation of hygiene concepts, staff absences due to the childcare situation, logistic costs, packaging material, raw materials, higher sickness rates
- Considerable uncertainties in the export business and the temporary closure of borders led to difficulties and delays in the supply chain
- Shortage of skilled workers: All vocational schools are currently only operationable to a limited extent and training and further education is faltering.
The companies of the BDSI and their employees are working extremely hard, are defying this crisis as well as possible and are thus most anxious that no further legal measures are brought into force that could put additional strain on the medium-sized companies of the food industry. "In the current situation the companies of the German sweets industry cannot cope with any additional burdens. And even after the crisis, the industry will take a while to recover. Hence now is not the time for new costly regulations such as an extended nutrition or climate label or a national, bureaucratic supply chain law," stated Bastian Fassin, Chairman of the BDSI.
Economic development of the German sweets industry in 2020
According to BDSI estimates, the production of sweets and snacks manufactured in Germany remained stable in 2020 at around 3.9 million tons (+0.0%). In terms of value on the other hand, at approx. €12.7 billion the production experienced negative growth (-0.5%). The BDSI estimates are based on the official figures from the German Federal Statistical Office and the market data from the relevant market research institutes.
In terms of volume, at just under 2.8 million tons the domestic offer (= production + imports - exports) increased in 2020 (+2.6%) and the domestic sales volume was estimated to be €9.0 billion (+3.7%).
Significant declines in the vital export business
The export business with sweets and snacks that is so important for the German sweets industry showed negative development in 2020 due to the global coronavirus crisis and further uncertainties on the world trade front such as the consequences of Brexit or the continuing imposition of US punitive tariffs on the sweet biscuits and wafer products of German manufacturers. Overall, an estimated 2.2 million tons of sweets and snacks were exported. This represents a decline of 2.9% in comparison to the previous year. The export turnover sank by 3.3% in 2020 down to approximately €8.4 billion.
With an export share volume of over 50%, more than every second ton of German sweets is destined for export. Around 80% of all exported sweets go to member states of the European Union. However, exports to third countries have been rising steadily for years.
Employment figures on the decline: In 2020, the German sweets industry provided jobs to around 49,000 employees, which makes it the fourth-largest sector in the food industry. This represents a decline of around 1.6% or approx. 800 jobs.
Innovations 2021 - delicious products for little everyday pleasures
The sweets industry is one of the particularly innovative industries and will once again in 2021 launch a wide variety of new products onto the market. However, the times are difficult for innovations during the coronavirus pandemic. There were no trade fairs or customer calls for the presentation of new product ideas. Furthermore, the consumers are reducing their shopping times in the food retail trade and are tending to opt for the "classic" product rather than an unknown, new product.
Products with natural ingredients such as nuts, oats, sesame, spices or other dried berries are on trend. Salty caramel is also extremely popular, especially as a filling in chocolate, biscuits or ice-cream. Among the salty snacks, particularly nuts, nut and nut/fruit mixtures are currently very trendy. The product ranges of more and more brands on the snack shelves are picking up on consumer-relevant aspects such as naturalness and convenience. As a rule, nuts and pulses are prepared for immediate consumption, i.e. roasted and salted/seasoned. But there is also a demand for unsalted and baked products.
Products for individual lifestyles will continue to gain more significance on the sweets market in the year 2021
In addition to the classic, traditional products that have been successful on the market for years, a row of alternatives with reduced sugar, fat and salt content, vegan, gluten and lactose-free products as well as further innovative products are already available today. The German sweets industry sees the changing consumer demands as an opportunity, continually develops the product offer and reacts to new demands and scientific cognitions.
"Whether sugar-reduced or sugar-free bonbons or biscuits, vegan chocolate or fat-reduced crisps: The manufacturers have been striving to provide the right offers for all of the consumers' tastes for years. However, the sweets industry wants the consumer to be able to individually select his product in future too and not have to fall back on the standard product designed by the political trend," said Bastian Fassin.
The German sweets industry is showing strong commitment to sustainability
The use of sustainably produced ingredients in sweets and snacks has been intensively promoted by the German sweets industry for many years. This is especially true for cocoa, the key ingredient in chocolate. Certification is an important component in the development of a sustainable cocoa sector. In 2019, the share of certified sustainable cocoa in sweets sold in Germany reached 72%. According to the BDSI’s first survey for 2011, this share amounted to only approx. 3%. The sweets industry is thus on an excellent course.
The same applies to the palm oil or palm kernel oil used for the production of sweets. 94% of the palm oil used in Germany’s sweets industry is already certified as sustainable. As such, the sector in Germany is playing a leading role. The companies operating in the sweets industry are taking a responsible approach in championing environmental protection and species conservation in palm oil production, even though palm oil is used in comparatively small quantities in the German sweets industry in relation to the total consumption of the product, both domestically (9%) and globally (0.2%).
The BDSI continues to be intensively involved as part of the Sustainable Cocoa Forum, a joint initiative founded in 2012. In addition to members from the chocolate and sweets industry as well as from the food trade, among others the German Government and standards-setting associations like Fairtrade and the Rainforest Alliance as well as representatives from civil society also assert themselves within this organisation. The BDSI is also a committed member of the multi-stakeholder initiative "Forum for Sustainable Palm Oil".