Sweet whispers in foreign ears

EU accession has raised for companies active on the local sweets market new opportunities as well big challenges in terms of production costs and competition. Analysts from marketing consulting company Visionwise think that integration increase competition among local and imported products in all the market segments, including the sweets, and more specifically, the chocolate market. Following this year's transaction with Kandia, Visionwise's analysts think that the chocolate segment is consolidated, with local independent producers looking for a better market positioning and targeting future take overs by international groups. Against the growth of the past two years, only four names matter on the local chocolate market as they split the big numbers, according to Stefan Liute, strategy director at branding agency Grapefruit. They are Nestle, Kraft Foods, Heidi Swiss Chocolats and Schweppes.

With a market split between local and international players, the companies have started to think over their strategies, either acquisition (Cadbury-Kandia) or selling some assets. Kandia paid EUR 10 million for the sugar-based production including stocks and installation of Kraft Food in December 2006. According to data disclosed by marketing research company AC Nielsen, the local chocolate market grew by 10 percent by volume and 17 percent by value in 2007 against 2006. The average consumption rate registered per inhabitant was estimated at 1.8 kilos per person. Some 88 percent of the public eats chocolate, and 60 percent of consumers are women, according to GFK's study. The market shows that premium products registered the best evolution, with chocolate tablets (large, flat slabs) decreasing in volume sales and an increase in regular chocolate bars and pralines.

Kraft Foods Romania, the second biggest operator on the local sweets market keeps the leading position on the chocolate segment, thanks to its Poiana brand, which reported sales of more than 350 million slabs since market launch in 1995. According to Kraft Food, the company registered 25 percent more sales for the chocolate segment in the first seven months of 2007 compared to previous year. For the non-chocolate segment, Wrigley Romania reported a consolidated value of 81 percent of the local sweets market in H1 of 2007, according to AC Nielsen's reports. The company reported sales that were 29 percent higher in 2007 than in 2006, with Orbit chewing gum as the best sold product. Wrigley Romania, subsidiary of the American group, holds a market share of 95.7 percent for chewing gum and 39 percent for candies, registering a turnover worth EUR 40 million in 2006, according to AC Nielsen.

Importers sell best at the end of the year

Sweets importers say that the last months of the year bring up to a 40 percent increase in sales compared to the entire year's result, the biggest sales being registered on the chocolate market. Different importers on the market acknowledge the growth on the specific segment, but local consumption is estimated to be lower than in other European countries. For the whole market, sweet consumption per person will reach 42 kilos in 2011, according to a study by Visionwise. The general market to growth estimates for next year is optimistic. For Randler group for instance, a Timisoara-based importer of different German chocolate brands, success came unexpectedly from Delitzscher chocolate, the company's representative say. Casandra Petras, marketing manager of Randler group, said the company had increased its turnover on the basis of other brands such as Bohme and Laroshell. These two brands are the new “acquisitions,” as the company started to import them only in 2007. The company's development strategy involves a better presence among imported brands with retailers and small shops countrywide according to the demand on the market, Petras said.

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