A third Australian confectionery manufacturer has entered administration in less than a month, but are retail pressures and higher costs entirely to blame or are Australians simply eating less sweets?
As reported in the Newcastle Herald, Metford Confectionery issued a statement to staff last Friday revealing that the company had gone into voluntary liquidation.
“We have found it very difficult to make headway with the required sales volume to support the manufacturing operations on site,” wrote Metford Confectionery operations general manager Brent Baillie.
It is the third Australian confectionery company to enter into administration in less than a month following the closures of Betta Foods and Ernest Hillier in January.
According to a spokesperson for the Australian Food & Grocery Council: “These closures demonstrate how tough the market conditions have become for food and grocery suppliers, squeezed between the unstoppable force of dominant retailers and the immovable object of high labour, utility and regulatory costs.”
Confirming the difficulties faced by the market currently, Mondelez, owner of Cadbury, this week admitted that increasing operating costs had led to a decision to reduce its Cadbury family blocks range from 220g and 210g to 200g. The statement said the change was due to ‘manufacturing cost increases that Cadbury could no longer absorb’.
A spokesman for Cadbury said: “We had to make a choice – increase the price we recommend to our retailers or change the size a little. We wanted to maintain the taste and quality while keeping Cadbury family blocks affordable.”
But is it just that the marketplace is competitive or is it that health food campaigners are starting to make headway in the fight against sugar and that the confectionery market is shrinking?
The Australian National Nutrition and Physical Activity Survey which was released in May 2014, surveyed 12,000 Australians in 2011 and 2012. The survey showed chocolate and chocolate-based confectionery was overall the most popular type of confectionery with 17% of people consuming it. Other confectionery (mainly consisting of lollies) were consumed by only 11% of the population, but children aged less than 14 years were the most likely consumers with 17-18% consuming.
Another report released this week by National Geographic, which looked at global eating patterns from 1961 to 2011, backed up those figures.
Most importantly though, the figures revealed that in the last 50 years the amount of sugar consumed as a part of an average Australian’s daily diet has actually reduced from 18% in 1961 to 12% in 2011.
And a lot has changed in the four years since 2011. The impact of celebrity chefs, such as Jamie Oliver and his food revolution, and popular diets, such as paleo which dictates a no sugar diet, have driven a greater focus on healthy eating.
But with a dearth in current dietary data, and confectionery manufacturers and supermarkets unwilling to discuss sales data, it is difficult to say with a degree of certainty that the Australian confectionery market has gotten even getting smaller since 2011. But if the trend over the half century has continued, it almost certainly has.
One thing is for certain though, if confectionery sales were strong, there wouldn’t have been three company closures in three weeks.