Jonathan Thomas, primary market analyst at Leatherhead, told ConfectioneryNews.com that the market, dominated by local producers, could restore growth through chocolate even though sugar confectionery was the largest category in volume terms, accounting for 59% of the market.
Boxed chocolates & sugar-free sweets
“In keeping with some of the other chocolate markets in the area, loose chocolates and chocolate sweets seem to be fairly popular,” he said.
“However, as tastes become more expensive, it would seem that demand for chocolate bars/tablets will increase over the coming years. If the economic situation continues to improve, it would also bode well for products such as boxed chocolate assortments,” he continued.
He added that the sugar confectionery sector could focus upon introducing sugar-free varieties in line with a trend towards healthier eating amongst Ukrainian consumers.
Market decline
The global economic recession has harmed consumer spending in Ukraine causing confectionery demand to fall over the past five years.
According to Leatherhead’s latest confectionery industry update, the Ukrainian market was pegged at €925m ($1.2bn) in 2011 compared to value sales of €1.1bn ($1.5bn) in 2007.
Chocolate consumption in the Ukraine is similar to levels in its key export market Russia at 4.2kg, but lower than nearby countries such as Poland and Czech Republic, said the update.
A local affair
The market is dominated by local players with Ukrainian firm Roshen the leader with a 20% share, followed by Konti on 15%.
Nestle Mondelez, Mars, Haribo and Perfetti Van Melle are present, but command much less of the market. Thomas said that he doesn’t expect them to replicate their global dominance in the Ukraine any time soon.
“I think that the major confectionery multinationals have a limited presence in Ukraine as a result of the strength of the local operators, a trend which seems likely to continue – for example, both Roshen and Konti have invested in their manufacturing capabilities of late, which suggests their market leadership will consolidate further,” he said.
Roshen opened a €59.1m ($77.9m) factory in Vinnytsia in August last year, its largest in the country, while Konti has been expanding its presence in export markets.
Multinationals’ priorities elsewhere
Thomas added that most multinationals were targeting the likes of Russia, Brazil, Mexico, India and China, as well as parts of Asia and the Middle East.
“As such, the Ukrainian market does not appear to be an area of priority for many of these firms at present,” he said.