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NCA Global Compass & Insights

Users are reminded that international trade regulations and standards change with speed and frequency and that information from one source sometimes contradicts information from other sources. This database attempts to compile data from numerous sources. Users should be aware that because different sources are used, there could be errors or omissions. The user accepts that the information is only intended to be an initial reference. The user understands that there is no assurance that this reference material is error free, and that no one involved in compiling or distributing this reference material shall be liable for any damages arising out of its use. Commercially important information should be rechecked and verified with knowledgeable parties in the country of interest prior to sale or shipment.

 

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Source: Euromonitor International

 

Source: Euromonitor International


Dashboard Explanation

A: Total market size by country (dark blue indicates the largest market size, light blue shows the smallest market sizes)

B: Country specific data highlighting total market size, per capita consumption and the forecast growth CAGR, as well as that country’s global rank for each data point

C: Global market size for total confectionery in US$ millions

D: Market size comparison for total confectionery across each region

 

 

Quick Facts

  • The Argentinian confectionery market totaled US$3.0 billion in 2012 and is forecast to grow 1.7% annually through 2017.
  • Chocolate confectionery leads all subcategories with a 53% value share of total confectionery, with sugar confectionery in second place (27% value share) and gum confectionery in third place (19% value share).
  • Arcor SAIC is the overall leader in the confectionery market in Argentina with a value share of 43.5% in 2012.
  • The overall confectionery market is set to register slower value growth during the forecast period than registered during the review period due to on-going inflation that is eroding consumer spending on impulse and indulgence items.
  • Demand for healthier confectionery, with fewer calories, less sugar, and more natural ingredients is continuing to drive product innovation. Functional products offering energy-boosting or relaxing properties are likely to evolve within sugar and gum confectionery, as these represent a niche market. New flavor trends are also expected to help drive sales. Within chocolate confectionery, snacking and health and wellness trends will continue to drive the introduction of multi-packs offering convenience and portion control.
  • Value sales of gum confectionery will grow faster than chocolate and sugar confectionery, driven by demand for sugar-free gum and flavor innovations offering combination flavors.

Sugar Confectionery

Market Trends

One of the main threats to sugar confectionery consumption in Argentina is the impact of inflation, which is weakening children’s power to purchase these products, as their parents do not give them extra money to cover inflationary costs. The consumption of sugar confectionary is also affected by the growing trend towards opening kiosks selling healthy food (confectionery specialty food stalls) in educational facilities in several provinces and cities, with the aim of encouraging healthy eating habits in children and young people in general. Although the sale of traditional sweets is not restricted, kiosks are required to offer juice, seasoned or dried fruits, nuts, seeds, etc.

 

Competitive Landscape

In 2012, Arcor was the leader in sugar confectionery, followed by Cadbury Stani Adams, and Bonafide. Arcor based its leadership on its extensive distribution chain allowing penetration of every kiosk. The company leads every category with the exception of liquorice, which is led by Cadbury Stani Adams. In 2011, Kraft Foods Argentina merged with Cadbury Stani Adams, and new strategic objectives are being pursued to ensure the future growth of the company, mainly in the medicated confectionery and chewing gum categories.

 

Future Outlook

Sugar confectionery is forecast to see slower value growth than expected for gum or chocolate confectionery due to category maturity and the dominance of low- and mid-priced products. The main threat to its expected growth is ongoing inflation putting many small- and medium-sized operators at risk. In the long term, functional and sugar-free products are expected to consolidate due to demand for healthier products. Energy-boosting products will likely evolve as consumers look for products which can enhance their performance at work. Finally, new flavor trends will perform well but will not boost sales significantly, as they are considered marginal improvements to existing products.

 

Source: Euromonitor International

Chocolate Confectionery

Market Trends

The latest chocolate trend in Argentina is that consumers are more likely to eat chocolate as part of their daily routine, instead of saving it for a special occasion. As Argentineans devote less time to full meals and increase their snacking behavior, gourmet chocolate marketers are responding by introducing multi-serve chocolate tablets to satisfy consumer demand. Therefore, chocolate tablets presented in large portion pack sizes (above 100g) gained important ground during 2011-2012. Meanwhile, the growing trend towards healthier consumption is driving sales of rice alfajores, as these have fewer calories and are perceived as healthier, “light” alfajores.

 

Competitive Landscape

Domestic brands continued to lead chocolate confectionery in 2012, driven by Arcor’s portfolio of brands. Meanwhile, international brands and manufacturers, driven by Kraft Foods Argentina (including Cadbury Stani Adams), followed by Ferrero Argentina, Masterfoods Argentina, and Nestlé, gained ground in 2012. Kraft Foods Argentina merged with Cadbury Stani Adams in July 2011. With a special focus within the tablets and countlines categories, the company showed impressive growth during 2011/2012 with the Milka, Tita and Rhodesia brands.

 

Future Outlook

Chocolate confectionery is expected to see slow growth over the forecast period, well below the constant value CAGR recorded over the review period, due to the rising cost of chocolate and growing inflation which is eroding consumer spending on impulse and indulgence items. Seasonal chocolate and countlines are expected to show the strongest performances during the forecast period, due to strong competition among the leading brands. In countlines, Arcor seeks to stimulate the consumption of its products as snacks, by promoting the new arrival Bon o Bon Postre and the traditional Bon o Bon Snack. Meanwhile, Kraft Foods is expected to show a strong performance with Rhodesia and Tita, which are historically among the most popular countlines brands in Argentina.

 

Source: Euromonitor International

Gum

Market Trends

Sugar-free gum represents the majority of sales of gum, as consumers tend to be concerned about dental health and consuming excess calories. Bubble gum is mostly consumed by children, and therefore does not compete with any other category, as products in the other categories are consumed by adults. However, due to increased awareness of child obesity and oral hygiene, children and teenagers are increasingly opting for sugar-free gum instead of regular gum and bubble gum. Innovative combination flavors are helping drive growth within the category. Meanwhile, functional sugar-free gum remains a niche category as consumers remain unaware of the dental benefits of this gum.

 

Competitive Landscape

The two leading companies, Cadbury Stani Adams and Arcor, focus their strategies on innovation in flavors and packaging for Beldent and Top Line respectively, although Cadbury is also increasingly supporting Bazooka and Bubbaloo, its flagship bubble gum brands. Both companies support their new products with intensive advertising campaigns on television, in printed media, street advertising and the internet. Arcor aims to reach parity with Cadbury during the forecast period by means of its extensive product range and wide distribution network.

 

Future Outlook

Although gum confectionery is forecast to see higher value growth than the estimates for sugar and chocolate confectionery, growth will still be slow due to category maturity and ongoing import restrictions due to rising inflation and capital flight. Sugar-free gum is expected to see the best performance over the forecast period, related to the appearance of combined flavors. Other innovative products, such as functional gum with relaxing or energy-boosting properties, are not currently present, and could well represent new launches, although there is still plenty of room for growth of more basic functional gum with cleaning and whitening properties.

 

Source: Euromonitor International

Retailing

Quick Facts

  • Current value growth of 27.0% in 2012, with retail value sales amounting to US$50.1 billion
  • Sales from supermarkets and hypermarkets are migrating to discounters and convenience stores
  • Outlets in grocery retailers jumped by 1,304 in 2012, to 358,111
  • Chilean group Cencosud leads grocery retailers in Argentina, with a current value share of 8.0%
  • Constant value retailing is expected to grow at a CAGR of 2% over the forecast period

 

Market Trends

In 2012, Argentina’s chained grocery retailers continued to focus mainly on conveniently located outlets situated in close proximity to residences and workplaces in order to increase volume sales. Sales from supermarkets and hypermarkets are migrating to the discounter and convenience store channels as inflation continues to erode purchasing power. For example, large companies such as Carrefour and Chango Mas expanded mainly through their smaller neighborhood outlets, and became smaller in size. With these new types of grocery retail outlets, companies are looking to compete mainly against chinos (small independent grocers), which in recent years have expanded rapidly in urban areas with significant populations of childless young professional couples with double incomes.

 

Competitive Landscape

In Argentina, traditional grocery retailers are far more widespread than modern grocery retailers, with 349,500 outlets in 2012 compared with just 8,600 modern grocery retail outlets. Following the 2001 economic crisis, many Argentineans eschewed large-format modern grocery retailers, instead making small purchases when needed at traditional grocery retailers. This drove rapid expansion of the chino retail format to meet demand. Traditional grocery retailers in Argentina compete mainly by positioning outlets in close proximity to as many consumers as possible, as well as through maintaining competitive prices, especially in comparison with modern grocery retailers.

 

Future Outlook

The overall consumer mood in Argentina during the forecast period will be dampened by rising inflation, which will erode consumer purchasing power. Therefore, hard discounters are expected to perform well during the forecast period, gaining significant ground against rival grocery distribution channels. The biggest channel in sales terms in 2017 will continue to be independent small grocers. Proximity, convenience and smaller weekly purchases at nearby retailers will sustain this channel’s leadership, driving consumers from supermarkets and hypermarkets to independent small grocers. Meanwhile, convenience stores will the fastest-growing channel in sales terms over the forecast period with a 10.0% CAGR in constant terms, driven by aggressive expansion mainly by Carrefour with its convenience store chains that compete against chinos, which will continue to expand to the country’s interior.

 

Source: Euromonitor International

Income & Expenditure

Argentina’s per capita annual disposable income and expenditure posted robust hikes of 69.4% and 68.6% respectively in real terms over the 2006-2011 period to reach US$6,279 and US$6,168 in 2011, as the economy registered high GDP growth in its continued recovery from the crisis of 2001-2002.

Argentineans in their 30s and early 40s had the highest average gross income, with the 35-39 age group earning US$11,860 in 2011. Many individuals in this age group are in executive or management positions, and typically spend money on their professional image and comfort of their family

Over a third of the population in Argentina belonged to social class E in 2011, which accounted for 11.1 million people or 36.1% of the total population aged 15 and over. This means that mass-produced consumables will find a wide audience. Social class A consisted of 3.0 million people in 2011 or 9.9% of the total population aged 15 and above, and is forecast to expand by 9.7% between 2012 and 2020.

In 2011, Argentina’s middle class accounted for almost 2.7 million households, or 23.5% of the total number of households. The number of middle-class households increased by 3.1% between 2006 and 2011 on the back of strong economic growth.

Between 2013 and 2020, total consumer spending is poised to expand by 65.5% in real terms on the back of continuing GDP growth. Spending on education is projected to post the highest gains over 2013-2020, with an impressive hike of 82.0% in real terms.

 

Per Capita Annual Disposable Income, Spending and Savings Ratio: 2006-2020

Argentina Disposable Income .jpg

 

On a regional basis, the highest total consumer expenditure and per household consumer spending in 2011 was registered in Gran Buenos Aires at US$136 billion and US$31,439, respectively, due to its high population density and the effect of the capital Buenos Aires.

 

Household Expenditure by Region: 2011

Argentina Household Expenditure.jpg

 

Source: Euromonitor International 


Demographics

Argentina’s population has been slowly growing over time and totaled 41.1 million in 2012. The median age is also rising. It was 30.9 years in 2012, up from 27.3 years in 1980. The birth rate is slightly lower than the regional average and will fall further in the future. Fertility rates have also been gradually falling over the past several decades but other factors (such as the growing number of women of childbearing age) slow the decline in the number of young children.

 

The country’s pension system has been in turmoil in recent years. In 2008, the government was able to push through the nationalization of all the private pension funds. The future of the system is highly uncertain. Meanwhile, Argentine society is ageing at an accelerating pace.

Source: Euromonitor International

Economy & Trade

Argentina’s dependency on commodity exports often leads to a volatile economic performance. Numerous labor strikes add to the country’s problems. Driven by stronger consumer spending, higher grain prices and growing demand for manufactures in neighboring Brazil, the economy performed well in 2010 and 2011. However, the economy ran out of steam in 2012 when real GDP grew by 1.9%. The slowdown was due to sluggish global demand, high inflation, a weak grain harvest and the impact of government import and currency controls on investment.

Real GDP is expected to grow by 2.5% in 2013 after gains of 1.9% in 2012. Tighter capital and import controls deter investment and limit the pace of growth. The economy is supported mainly by government-stimulated consumer demand.

Inflation was 10.0% in 2012 and it will edge up to 10.7% in 2013. In 2013, the government announced a temporary price freeze on fuel and many food products. The IMF is urging Argentina to restore international credibility to its inflation index. In 2013, it concluded that the government had failed to take remedial measures and issued a declaration of censure.

Unemployment stood at 7.3% in 2012 and it will rise to 7.5% in 2013. Argentine workers continue to demand pay raises in line with inflation estimated by private economists at more than 20.0%. One in four jobs are created in the public sector.

A mass exodus of foreign investors, which has been limited only by the government's capital controls, threatens to undermine the economy. Underlying problems range from the president's hostile treatment of the private sector, to severe financial distortions such as a parallel exchange rate. Capital flight amounts to as much as US$3 billion per month, according to Banco de la Ciudad de Buenos Aires. A similar malaise affects domestic investors. Business confidence has fallen to levels last seen during the Great Recession.

The real value of private final consumption rose by 8.1% in 2012 and gains of 8.6% are expected in 2013. The rate of growth will likely slow in the medium term.

Source: Euromonitor International

Confectionery Exports from Argentina to the US (2012)
Volume (Tons) 13,624.4
Value  $21,846,810
Confectionery Exports from Argentina to the World (2012)
Volume (Tons) 69,930.6
Value  $264,072,810
Confectionery Imports to Argentina from the US (2012)
Volume (Tons) 469.3
Value  $1,682,646
Confectionery Imports to Argentina from the World (2012)
Volume (Tons) 16,423.1
Value  $73,211,580

Source: Euromonitor International


US Exports to Argentina (Value in US$ Thousands)
January February March April May June July August September October November December
2012 753 8 215 664 589 258 72 409 347 119 763 454
2013 201 382 579 769 552 240 694 691 580 25 653 124

 Source: Euromonitor International

US Export to Argentina (Volume in Metric Tons)
January February March April May June July August September October November December
2012 165.4 1.4  68.4 134.0 123.8 28.6 26.7 57.7 88.1 22.9 92.5 30.3
2013 38.0 85.9 157.4 109.3 97.8 43.0 129.0 106.3 111.8 7.2 -   -  

Source: Euromonitor International


Definitions

Retailers

Retailers selling predominantly food/beverages/tobacco and other everyday groceries. This is the aggregation of supermarkets, hypermarkets, discounters, convenience stores, independent food stores, chained forecourt retailers, independent forecourt retailers, food/drink/tobacco specialists and other grocery retailers.

 

Convenience Stores

Chained grocery retail outlets selling a wide range of groceries and fitting several of the following characteristics: extended opening hours, a retail area of less than 400 square meters, located in residential neighborhoods, handling two or more of the following product categories: audio-visual goods (for sale or rent), take-away food (readymade sandwiches, rolls or hot food), newspapers or magazines, cut flowers or potted plants, greetings cards, etc. Example brands include 7-Eleven and Spar. Note: The number of branches required to be termed chained varies from country to country, but is usually ten or more. If a multinational is operating in the country, then this is included, even if the brand operates less than ten outlets.

Discounters

Discounters typically have a retail space of between 400 and 2,500 square meters. Retailers' primary focus is on selling private label products, within a limited range of food/beverages/tobacco and other groceries at budget prices. Discounters may also sell a selection of non-groceries, frequently as short-term special offers. Discounters can be further differentiated as hard discounters and soft discounters. Hard discounters were first introduced by Aldi in Germany, and are also known as limited-line discounters. These retail outlets are typically 300-900 square meters, and stock fewer than 1,000 product lines, largely in packaged groceries. Goods are mainly private label or budget brands. Soft discounters are usually slightly larger than hard discounters, and are also known as extended-range discounters. Retail outlets of this type typically stock 1,000-4,000 product lines. In addition to private label and budget brands, soft discounters commonly carry leading brands at discounted prices. The discounter retail format excludes mass merchandisers and warehouse clubs. Example brands include Aldi, Lidl, Plus, Penny, Netto, etc.

Forecourt Retailers

Forecourt retailers are retail grocery outlets selling a wide range of groceries from a gas station forecourt, and meet several of the following characteristics: extended opening hours, retail area of less than 400 square meters, offering two or more of the following product categories: audio-visual goods (for sale or rent), take-away food (readymade sandwiches, rolls or hot food), newspapers or magazines, cut flowers or potted plants, greeting cards, or automotive accessories. Sales data excludes gasoline sales. Example brands include BP Connect, and Shell Select. Forecourt retailers are an aggregation of chained forecourt retailers and independent forecourt retailers

Hypermarkets

Hypermarkets typically have a retail space of more than 2,500 square meters, with a primary focus on selling food/beverages/tobacco and other groceries. Hypermarkets also offer a range of non-grocery merchandise. Hypermarkets are frequently located in out-of-town sites, or serve as the anchor store in a shopping center. Example brands include Carrefour, Tesco Extra, Géant, E Leclerc, Intermarché, and Auchan. This retail format excludes cash and carry, warehouse clubs and mass merchandisers. For the hypermarket channel, Euromonitor International also provides a breakdown of value sales between grocery and non-grocery products.

Supermarkets

Supermarkets focus primarily on groceries, and have a retail space ranging from 400 to 2,500 square meters. This retail format excludes discounters, convenience stores and independent grocery stores. Example brands include Champion, Tesco, and Casino. Exception: In some markets, primarily the US, Australia and Hong Kong, there are grocery retailer brands that operate outlets with a selling space of over 2,500 square meters, but offer only a very limited range of non-grocery merchandise or none at all. These brands are included in the supermarket category. Examples include Coles, Woolworths, and Park ‘n Shop. For the supermarket channel, Euromonitor International also provides a breakdown of value sales between grocery and non-grocery products.

Traditional Grocery Retailers

Traditional grocery retailing is the aggregation of those channels that are invariably non-chained and are therefore owned by families or individuals. Traditional grocery retailing is the aggregation of three channels: independent small grocers, food/drink/tobacco specialists and other grocery retailers. While there can be modern (chained) food/drink/tobacco specialists or other grocery retailers operating in this sales channel, these stores are still considered as traditional according to Euromonitor International’s criteria.

Other Grocery Retailers

Other retailers selling predominantly food, beverages and tobacco or a combination of these. This category includes kiosks, markets selling predominantly groceries, food and drink souvenir stores, regional specialty stores, and CTNs (CTN = Confectionery, Tobacco and News retailers). Direct home delivery of milk and meat from dairies and farms is excluded. Sari-Sari stores in the Philippines and Warung (Waroon) in Indonesia, that can either be markets or kiosks, are included in other grocery retailers unless they occupy a separate permanent outlet building, in which case they are included in independent small grocers. Outlets located within wet markets, particularly in Southeast Asia (often located in government-owned multi-story buildings) should be counted as separate outlets.

Confectionery

This retail format is the aggregation of chocolate confectionery, sugar confectionery and gum. Note: Retail sales measurements are confined to packaged sales. However, exceptions are made for seasonal chocolate, where unpackaged/artisanal sales are included. Pick ‘n’ mix sales are also included. Finally sales from chocolatiers, typically displayed loose and later packaged (usually in boxes), are also included.

Chocolate Confectionery

This is the aggregation of tablets, countlines, bagged selflines/softlines, boxed assortments, seasonal chocolate, chocolate with toys, alfajores and other chocolate confectionery. Note: Chocolate overtly positioned for baking/cooking purposes is excluded from Euromonitor International's confectionery coverage.

Sugar Confectionery

This is the aggregation of mints, boiled sweets, pastilles, gums, jellies and chews, toffees, caramels, nougat, medicated confectionery, lollipops, liquorice and other sugar confectionery.

Gum

This is the aggregation of chewing and bubble gum. Bubble gum is similar to chewing gum but is specifically marketed at children/adolescents, with blowing bubbles as the principal marketing theme. Both regular and sugar-free gum is included in bubble gum and chewing gum.

 

Source: Euromonitor International

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