Boston, MA -- (SBWIRE) -- 09/10/2014 -- Executive Summary

Chocolate Confectionery

Value sales of chocolate confectionery are anticipated to maintain 4% growth in 2013. The range of premium products available is expected to increase in the year, as new packaging and the number of children-specific products increases. At the same time, manufactures will emphasise healthy concepts to products - targeting parents who are major consumers in the market.

Competitive Landscape

Lotte Confectionery is set to lead chocolate confectionery with a 30% value share, reaching Won153 billion in value sales in 2013. However, the company's market share has gradually decreased over the review period, because of its out-dated brand image and stagnation in chocolate confectionery sales. To overcome its share decline, Lotte Confectionery launched its Kids Tree brand for kids in February 2013. Together with other snack products under its Kids Tree brand, it emphasised the naturalness of its products and lack of additives. An increase in the range of products on offer has the potential to support sales to children and mitigate a decline in overall sales.

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Industry Prospects

Value sales of chocolate confectionery is expected to grow at a CAGR of 1% at 2013 constant prices over the forecast period. As more manufacturers are rebranding their existing products, more boxed assortments will be launched under familiar brands. For example, Orion launched various sizes of Market O box assortments, after observing Chinese visitors buying large quantities of the products as souvenirs.

Gum

In South Korea, gum sales will continue to increase marginally due to falling growth in demand for gums fortified with xylitol which is a functional ingredient for teeth health and a lack of innovation in developing replacements. In 2013, gum is expected to see value growth of 2%, to reach Won375 billion. Bubble gum will continue negative value growth of -1% in 2013. This decline will be caused by market saturation and consumer awareness that chewing bubble gum is bad manners. On the other hand, chewing gum is expected grow by 2% in value terms, driven by steady growth in sugar free gum. Sugar free gum will contribute 76% of chewing gum value sales.

Competitive Landscape

Lotte Confectionery will maintain their dominance in gum, with an expected 55% value share in 2013. Watta, which was launched by the company in 2013, focussed on teenagers and benefitted from high levels of marketing. The product was developed to provide a longer-lasting experience of chewing bubble gum. Marketing through competitions will support sales of the product, although the impact on the company's market position was minimal.

Industry Prospects

Value sales of gum are expected to decrease at a CAGR of -1% over the forecast period, in constant 2013 prices. While the growth of overall gum will decline, chewing gum will perform better with a -1% CAGR than bubble gum with CAGR of -3% in constant value sales. Manufacturers are expected to focus on chewing gum, especially sugar free gum which has better potential for growth in the forecast period.

Sugar Confectionery

Value sales of sugar confectionery are expected to grow by less than 1%, to reach Won356 billion in 2013. Medicated confectionery will see the highest value growth of 2% in the market. In South Korea, the yellow dust from China, which occurs during every spring, will happen more often in 2013. Moreover, the level of fine dust particles called PM-10 has increased rapidly in the Seoul city, which causes severe air pollution and sore throats. Both of these environmental factors will cause higher consumption of medicated confectionery.

Competitive Landscape

Crown Confectionery leads sugar confectionery, holding 20% of value sales in 2013. The company's largest brand, My Chew, will recover from sales losses between 2009 and 2012. The brand will hold 32% of sales in pastilles, gums, jellies and chews in 2013. Since its merge of distribution network with Haitai Confectionery & Foods in 2009, the company has adjusted its product lines to avoid cannibalisation. For instance, both companies have similar products called Youngyanggaeng, which may face cannibalisation by confusing consumers due to the same name. Because the product of Haitai Confectionery & Foods has performed better, Crown Confectionery has looked to differentiate its products by developing a new type of Youngyanggaeng.

Industry Prospects

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