Euro snacking resilient despite festive demand fears - industry

By Neil Merrett

- Last updated on GMT

Concerns over the potential decline of US ‘luxury’ food and snack demand during the run up to Christmas are not being shared by European manufacturers of sweet snacks, according to one industry association.

David Zimmer of European trade group CAOBISCO told that higher end biscuit, cakes and confectionery products, particularly those flavoured with chocolate, were proving to be resilient to an expected market downturn for foods.

The comments follow the release of new research by market information group TNS, which suggest that the increased costs of finished products could lead to flat and even declining demand during the last three months of 2008, the so-called holiday period.

TNS senior economist Frank Badillo said that the figures for consumer spending across the entire food chain were likely to fall, though particularly in the case of higher priced 'luxury' goods.

Higher-end strength

However, Zimmer said that from an anticipatory view point, certainly in Europe, and to his knowledge in the US as well, consumers interest in the more higher end luxury goods remained undimmed as yet.

"Despite the recessionary trend, the markets appear to be holding up well so far,"​ he stated.

In particular, Zimmer stressed that the image of snack products as both convenient, on the move foods that are also affordable luxuries was being maintained in European eyes.

"We certainly see no evidence of consumers cutting back on the segment,"​ he said.

Biscuit challenges

According to CAOBISCO, not all baked or confectionery snacks would be reaping the benefit of this expected growth in luxury goods demand though.

The association stressed that biscuit sales were always quite hard to define as many brands were produced on a private label, or retailer own-brand basis, as opposed to higher-end products.

Zimmer said that one area of growth across all segments was chocolate-based or cocoa flavoured products be they cakes or confectionery.

"Demand for chocolate products has not been hit,"​ he said. "Consumption of these products has been boosted by favourable news on the potential benefits of polyphenols and demand for dark chocolate."

Zimmer added that the US definition of the holiday period, which would probably include the nation's stronger focus on days such as Halloween, meant that the counterpart industry in Europe did not necessarily operate under the same conditions.

According to the US national retail federation, the country’s Halloween celebrations provides the second most prolific holiday period for consumer spending on goods like snacks and sweets.

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