Business Growth in the UK Confectionery Market (Edexcel A Level Business): Revision Note

Business growth in the UK confectionery market

• The UK confectionery market is large, well established and mature

  • Most consumers already buy confectionery and biscuits on a regular basis

  • Future growth in the market is expected to be steady rather than rapid, as there are relatively few new customers entering the market

• Recent growth has not come from people buying significantly more confectionery and biscuits

  • Instead, it has mainly been driven by higher prices, premiumisation and product innovation

  • The UK confectionery market is growing in value rather than volume, with consumers paying more per item rather than increasing the quantity they purchase.

UK confectionery market size and recent growth

• The value of the UK confectionery market has continued to increase in recent years, even during periods of high inflation and falling real household incomes

• Demand for confectionery has remained relatively resilient, despite pressure on consumer spending

• Growth slowed slightly in 2024 as inflation began to fall, but the market still expanded

  • This suggests that confectionery is seen as an affordable treat that consumers are reluctant to give up

Growth within different confectionery segments

• Growth within the UK confectionery market is uneven, with some segments performing better than others

Chocolate confectionery

• This is the largest and most important segment and accounts for over half of total confectionery sales by value

• It has also been the main driver of growth, largely because:

  • Rising global cocoa prices have pushed up retail prices

  • Premium chocolate bars and sharing products have become more popular

  • Chocolate is strongly linked to treating and gifting occasions

Sugar confectionery

• Sugar confectionery, which includes sweets and chewing gum, has experienced much weaker growth

• Demand in this segment has been particularly affected by:

  • Health concerns linked to sugar consumption

  • Reduced impulse buying among some consumers

• As a result, growth in sugar confectionery has been slower, and in some years sales volumes have been flat or declining

The UK biscuits market and business growth

• The UK biscuits market is worth around £3 billion and shows different growth characteristics to confectionery

• Biscuits are bought more frequently and are often part of daily routines, such as eating with tea or as a lunchbox snack

  • This makes demand for biscuits more stable and less dependent on special occasions

• Growth in the biscuits market has been slow but steady, with sales value growth supported by:

  • Rising prices

  • Growth in premium and indulgent biscuit ranges

Growth variation in the biscuits market

Everyday biscuits	Premium and bakery-style biscuits
Very low growth Consistent sales volumes Examples: digestives and rich tea	Growing faster Consumers are willing to pay more for indulgent products Examples: Duchy, Border, Bonne Maman

• As with confectionery, sales value growth in biscuits is being driven mainly by premiumisation rather than increased volume

Market growth forecasts

• Market research organisations forecast moderate growth for the UK confectionery market over the next few years, reflecting its mature nature

• These forecasts suggest that the UK confectionery market will continue to grow, but only at a slow and controlled pace

• Most businesses will need to focus on maintaining or increasing their market share rather than relying on overall market growth

Reasons for forecast UK growth

• Growth is expected to remain limited due to population stability

  • The UK population is growing slowly, which restricts demand growth through new consumers

  • As a result, businesses must rely on changing consumer preferences rather than population growth

• The continued importance of price and premium effects

  • Sales value growth is expected to be supported by:

    • Higher average prices, partly due to ongoing cost pressures (e.g cocoa and sugar prices)

    • Continued demand for premium chocolate and biscuit products

• Ongoing innovation is expected to support growth

  • New flavours, limited editions and product variations help maintain consumer interest, especially in a highly competitive market

  • Biscuits, in particular, benefit from innovation because they are purchased frequently, meaning small changes can encourage repeat purchases

Limits to growth in the UK market

• Despite these factors, there are some limits to growth in the UK confectionery market

  • Competition between established brands is intense, making it difficult for businesses to increase sales without taking market share from rivals.

  • Health concerns and growing awareness of sugar consumption may also limit long-term volume growth

  • The strong power of supermarkets places pressure on both prices and profit margins, particularly for smaller suppliers

• Together, these factors mean the UK confectionery market offers low risk but limited growth potential

What this means for UK-based businesses