Despite the fact that many companies including Cadbury itself are struggling to deal with rising raw material costs (witness Hershey Foods’ swoon from No. 5 to No. 6 as sales fell an estimated $36 million), Candy Industry’s list of the Top 100 international confectionery companies suggests consumers are willing to spend more than ever on sweet treats.
Total combined sales for the Top 100 confectionery companies in the world hit $91 billion last year—an eye-popping gain of almost $10 billion from the previous year and about 50% more than five years ago, when the Top 100 posted sales of $60 billion.
Now that’s some sizable growth. But before anyone goes and sprains an elbow from patting him or herself on the back, there are a few caveats. Some of the increase in the Top 100 total this year is due to factors apart from incremental sales gains.
Exchange rates always affect the standings. But this year, the U.S. dollar plummeted, losing about 11% of its value vs. the euro from Jan. 1-Dec. 10, 2007 and raising the sales of just about every European Union manufacturer on the list.
Then, like every year, Candy Industry corrected a couple oversights from past lists. Only this time the oversights appear a little higher up the ladder.
Spain’s Natra debuted at No. 33 with sales of $427 million. Poland’s Grupa Jutrzenka and Wawel landed at Nos. 56 and 81, respectively, posting revenues of $180 million and $100 million. And Ukraine’s Roshen came in at No. 68 with $140 million. All replaced companies with sales of less than $60 million.
Lastly, a number of acquisitions also drove the overall total. Wrigley began the year by buying Russian chocolate maker (and former No. 71) A. Korkunov. The deal added about $100 million to Wrigley’s total and opened a slot for a company like Georgia Nut and its $70 million in revenues.
Two of the new names, Jutrzenka and Natra, debuted higher due to a spree of acquisitions. Jutrzenka picked up Polish wafer maker Kaliszanka and its $50 million in sales this summer. Natra nabbed chocolate spread manufacturers All Crump of Belgium and Nutkao from Italy, adding more than $130 million to its revenues.
Groupe Cemoi acquired a majority stake in French rival Jacquot de Troyes (annual turnover of about $175 million). Cadbury Schweppes picked up Japanese reduced-sugar confectionery expert Sensei Foods. All acquired companies were previously not listed.
And in the biggest move of all, Kraft Foods buyout of Danone Group’s LU biscuit division (another non-listee) will likely propel the company past Hershey and Wrigley next year.
Still, $10 billion can’t be completely explained away by monetary fluctuations and growth through acquisition. The industry appears pretty healthy, fueled in part by rising demand in developing nations.
Rampant new plant activity in those regions—including Perfetti Van Melles’s new facilities in Vietnam and India, the joint Arcor/Barcel plant in Mexico, and Mars and Wrigley each building in Russia—suggests bigger numbers to come.
Who knows? Next year might top that $100 billion mark.