Industry struggles with problems
There is a shortage of chocolate Easter bunnies
01/25/2022 3:29 p.m
The good news from the point of view of the industry: In the past year, sales of confectionery and snacks increased significantly. But supply chain problems and an “all-time high” in commodity prices are causing problems for the industry. That could affect the lucrative Easter business.
Supply bottlenecks, rising raw material prices and the pandemic are making life difficult for the German confectionery industry. “The market for important raw materials has been swept empty, long-standing supply chains no longer work,” said the general manager of the Federal Association of the German Confectionery Industry (BDSI), Carsten Bernoth, in Cologne. This could even have consequences for the Easter business, “e.g. that not all popular products such as chocolate bunnies can be produced as planned”.
On Sunday (January 30th) the International Confectionery Fair ISM starts in Cologne. After a two-year break due to the pandemic, almost 1,100 companies from 56 countries want to present their sweets and snacks at the four-day trade fair.
The price of wheat has risen by 50 percent to a “new all-time high” within a year, milk powder, sugar and oil have also become more expensive, as has packaging materials, the association explained. The reasons for this are not only lower harvests but also lower imports and increasing demand in Asia. In addition, there would be double the electricity price for industrial customers within a year and capacity problems in international logistics.
“The limit has been reached,” the association summed up. Politicians are called upon to protect medium-sized companies in particular from further burdens. “Otherwise, in the medium term, there is a threat of the loss of the medium-sized economic structure in Germany, which has so far proven to be robust,” explained Bernoth. In addition, there is concern about further staff shortages due to the rapidly spreading omicron variant of the corona virus.
Export back to pre-crisis level
Despite the current problems, the industry association spoke of a stable development in production and sales for the past year. The production volume increased by an estimated 1.3 percent to 3.9 million tons, and sales increased by 2.2 percent to around 13.1 billion euros. In the important export business, sales were 8.9 billion euros (plus 4.2 percent) and thus again reached the pre-corona level of 2019.
According to the BDSI, products with natural ingredients such as nuts, dried berries or sesame are currently in trend. Many manufacturers rely on vegetable protein sources. “More and more products contain oats, pumpkin seeds, sunflower seeds, soya, lentil or pea proteins.” As in previous years, products with a reduced sugar content were also part of the product trends.
According to the BDSI, the German confectionery industry employed around 50,000 people in 2021. The association represents over 200 companies. According to the German Trade Association, the confectionery range accounts for around ten percent of sales in the food trade.