CAIRO: In times good and bad, Egyptians are fond of confectionaries. According to a new retail market audit conducted by Nielsen, consumers in the country spent approximately LE 8 billion on salty snacks, sweets and other treats. On a value basis, sales grew 5 percent in 2011 compared to 2010, but on a volume basis, the category posted a decline of 3 percent due to inflation.
Despite this decline, the salty snacks market in Egypt has attracted new investors even after the revolution, with five new brands entering the field in 2011 supported by heavy media support. Currently the salty snacks market is estimated at 130,000 tons sold per year.
“Snacks as a sector is the least affected by inflation due to the high competition and the low price,” said Osama Awad, Retail Measurement Services Manager- Nielsen. “Salty snacks are particularly popular, comprising 44 percent of the confectionary market in the country as a whole and consumers in Upper Egypt are particularly fond of them.”
Chocolates and biscuits are the second biggest categories with 18 percent and 14percent of the market respectively. “Just as with salty snacks, both biscuits and chocolates have attracted new investments in 2011, mainly from Turkish manufacturers in this field,” explained Osama.
Cake & Croissant categories represent 13 percent of the confectionaries market and are mainly dominated by a large local manufacturer – almost LE 1 billion. Despite the large size of both categories, these categories didn’t attract any new investors in 2011, due likely the dominance of the local player and the high start-up costs.
Ram Mohan Rao, managing director, Nielsen Egypt emphasized that, “Despite the stagnation of the market in 2011, a lot of investors are still interested in the Egyptian market given its large size. This sector has also proven to be good ground for investment especially after discovering that it hasn’t been significantly affected by the revolution and has managed to maintain stability despite the economic-political situation.”
Looking ahead, Rao believes that the category is poised for more growth in the year ahead. “Regardless of what’s happening around them, Egyptians have sweet spot for confections. Even during the tumult of the revolution, confections held their ground in a very difficult environment. It is expected that new products from both local and outside companies will continue to be introduced, further expanding an already huge market.”