Ukrainians are recognized sweet eaters. According to analysts, our country is among the top ten most devoted fans of confectionery. On average, Ukrainians eat about 15 kg of confectionery per year , namely:
More than 95% of the market is occupied by the products of domestic companies. In addition, the confectionery industry accounts for as much as 15% of the country’s food industry. The confectionery business in Ukraine involves more than 50,000 employees working at eight hundred enterprises.
The Ukrainian confectionery sector is one of the most modernized and highly competitive, but it is currently experiencing bad times. In terms of shipments, it is successfully divided between flour products and chocolate. Other representatives of the category occupy a relatively small share.
General features of the Ukrainian market of confectionery products:
- constant high demand for products;
- most products are homogeneous;
- the price is formed according to the laws of the market, sellers cannot influence it much;
- It is relatively easy for new players to enter and exit the market;
- transparency in pricing and product policy of manufacturers.
Due to the economic crisis (growth of foreign currencies) and unstable political situation (export blockade of the Russian Federation) Ukrainian confectioners have suffered significantly.
Key Market Challenges in 2016:
- increase in the cost of production;
- A decrease in overall purchasing power;
- decline in production volumes in all segments, except for cocoa-free products;
- a serious reduction in the consumption of premium products;
- the urgent need to change production technologies.
Quite a curious situation. The dollar exchange rate has strongly affected the cost of imported raw materials for the production of flour confectionery products and provoked consumers to switch to cheap products: crackers, gingerbread, waffles. It is not profitable to produce cheap products from expensive raw materials. Therefore, the growing demand for sweets in the budget segment led to a change in the production technology of some popular products. Instead of high-quality imported raw materials, confectioners began to use domestic raw materials or inexpensive substitutes.
Read also: Summer treat: analysis of the ice cream market in Ukraine
What products are manufactured in Ukraine
Flour confectionery refers to sweet high-calorie products with a pleasant taste, which are quickly digested by the body. They contain more than 25% flour and a lot of sugar. In addition, sweets contain eggs, fats, chemical leavening agents and flavoring additives.
Conventionally, flour confectionery can be divided into several product groups:
- cookies, crackers, galettes;
- rolls;
- waffles;
- tubes;
- cupcakes;
- cakes;
- brownies;
- donuts;
- gingerbread;
- oriental sweets.
Depending on the method of preparation and consumer preferences, products may have a filling inside and a glaze on the outside. Full or partial coating of the product with chocolate is also allowed. Flour products with sugar substitutes are available for diabetics.
Despite the slow growth dynamics of some segments, the market assortment is slowly expanding. In addition to the primitive baked goods that used to dominate the flour products segment, today you can find anything you like on the shelves: from cookies, muffins and rolls to all sorts of cakes and pastries. Especially products with fillings are growing in popularity.
The largest producers of flour confectionery products
The Ukrainian confectionery market is replenished from three main sources:
- by large enterprises represented in all regions;
- by local producers known in a small area;
- small batches of imported products.
Due to the local war in Ukraine, the economic crisis and the closure of markets in some neighboring countries, the flour confectionery sector has undergone a major reshuffle.
According to experts’ estimates, the list of the largest players in the surveyed market is as follows:
- Roshen;
- Conti;
- AVC;
- Grona;
- Bisquick Chocolate;
- KF Yarich;
- KF Lagoda.
In total, these companies hold more than half of the confectionery market. In 2015, Conti dropped to the second place in the rating, while the leader was the well-known Roshen Corporation. This was facilitated by the development of its own network of stores across Ukraine, which reduced the manufacturer’s costs per “shelf” in the supermarket and allowed it to accumulate an audience of local customers.
AVK temporarily dropped out of the flour confectionery market due to the fact that its main production facilities were located in Donetsk and Luhansk – the ATO zone. Due to the closure of two plants, the production of cookies was completely stopped. Nevertheless, in early 2016, the company managed to move the production site to the city of Dnipro and restore most of the lines. Gradually, the company is bringing back into operation the entire range of products.
Despite the slump in production volumes, the whole trio (Roshen, AVK, Konti) is among the top 100 world producers of flour confectionery products. Based on the rating of the authoritative publication Candy Industry, the positions of Ukrainian confectioners are as follows:
- Roshen – 22nd place – turnover $800 mln;
- Konti Group – 38th place – turnover $473 mln;
- “AVC” – 62nd place – turnover $269 million.
Returning to the local market, it is worth noting that in recent years manufacturers have engaged in a real scuffle in the war for the consumer. Many had to expand their product lines, especially in the budget segment, and make promotional offers. Biskvit-Shokoladol, Grona and KF Yarich especially distinguished themselves in this respect. The latter, for example, due to active expansion, grabbed a whole quarter of the simple cookie market.
Read also: Market overview of frozen and fresh berries in Ukraine
Import and export of flour confectionery products
Despite the fact that more than 95% of the Ukrainian flour confectionery market is occupied by domestic products, imported products are also in constant demand among consumers, and its share is slowly growing.
Most of all Ukrainians like Polish, Turkish, German and Dutch sweets. Most exporters are neighboring countries. Therefore, their goods please not only with quality, but also with acceptable price. In total, more than 30 thousand tons of confectionery were imported in 2016.
According to the State Fiscal Service of Ukraine, exports of flour confectionery have decreased in monetary terms over the past three years , but increased in quantitative terms. As we mentioned above, this was due to the reorientation of confectionery producers towards the budget segment.
In 2016, Ukraine supplied foreign partners with 77.5 thousand tons of products worth a total of 104.5 thousand dollars. As for the geographical structure of exports, the most loyal buyers of Ukrainian sweets were Moldova, Kazakhstan, Turkmenistan and Azerbaijan. Earlier, Russia was on this list, but for political reasons this market for Ukrainian confectioners was closed. Four years ago, the Russian Federation accounted for 40% of exports in this segment.
The situation was similar with Belarus, which introduced new barriers to non-tariff regulation and closed the access of our products to its market. In particular, we are talking about the mandatory sanitary and hygienic examination of imported products introduced in August 2015, which all Ukrainian goods must now undergo.
Producers of flour confectionery products promptly reacted and redirected the flow of products to European markets. KF “Yarych” organized deliveries to Poland, Czech Republic, Spain, Hungary, and even the USA. “Biscuit-Chocolate” also successfully mastered the American market.
In 2016, the export figure to the EU increased 8 times.
Portrait of the target audience
Statistics show that in Ukraine, women are predominantly involved in buying products, including confectionery. Of them, 40% are housewives and do not have a permanent job. The age structure is evenly divided, and only the category of women 45-55 years old slightly stands out from the general background and makes up about 21%. 
The specifics of confectionery consumption in Ukraine are different from European or American, where it has become a product of daily consumption. In our country, waffles, cakes and cookies are more of a holiday attribute and are bought when there is a good reason.
Ukrainians are quite conservative in their choice of sweets and prefer to stay loyal to one brand. The main criterion when buying is freshness and quality. No one will buy overdried and hardened oatmeal cookies, even if they are in a beautiful package.
Men buy flour confectionery for a quick snack at work, on the road or at home before bedtime. They prefer simple galette or shortbread cookies, Artek wafers, gingerbread without filling. Women, in turn, consider confectionery as an anti-stress and a source of pleasure. Therefore, they prefer products with filling, sweet fondant or glaze.
Sweets are not a necessity, often confectionery is bought for a momentary whim. That is why manufacturers try to place points of sale in crowded places, and in large chain supermarkets sweets are often placed in several places at once.
Read also: Confectionery packaging market overview
Ukrainian flour confectionery market: trends and forecasts
Despite the crises and market turmoil, we can say that the Ukrainian market of flour confectionery products has reached a certain point of stability. Producers got used to the new state of affairs and successfully adapted to the situation.
The first noticeable trend in the flour confectionery market is an increase in the minimum bar for product quality requirements. If at the height of the crisis the decisive factor was the low price of products, with the stabilization of the market, consumers again want to see only high-quality ingredients in the composition of products.
Another new trend is the reorientation towards “healthy” products. Consumers are trying to look after their figure and body condition, so they prefer confectionery containing natural cereals, fruits and bran.
The latest trend in the Ukrainian flour confectionery market is reorientation towards export. This is especially characteristic of high and premium segment product groups, the demand for which in the home country has significantly decreased in recent years. Export sweets will have a variety of flavors, while products for the local market will remain conservative and restrained.
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