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Uganda Confectionery Market - Forecast(2023 - 2028)
Uganda Confectionery Market
Overview
The Uganda Confectionery market size is estimated to reach $117.2 million by 2027, growing at a CAGR of 3.7% during the forecast period 2022-2027. Confectioneries are food products that are rich in sugar and carbohydrates. Apart from personal consumption, confectioneries are also used to offer hospitality to guests or as gifts. Moreover, they are also extensively consumed during major festivals and other celebratory events. Some of the chief confectionery products consumed in Uganda include caramels, hard-boiled sweets, pastilles, mints and snack bars. The rapid rate of urbanization in Uganda is anticipated to drive the market for confectionery products during the forecast period. However, the Covid-19 pandemic and the subsequent restrictions imposed by the government is projected to act as a key challenge for the Uganda confectionery industry during the forecast period.
Report Coverage
The report: “Uganda Confectionery Market Forecast (2022-2027)”,
by Industry ARC, covers an in-depth analysis of the following segments of the Uganda Confectionery Market.
By Product Type: Hard-boiled
Sweets, Mints, Gums & Jellies, Chocolate, Caramels and Toffees, Medicated
Confectionery, Fine Bakery Wares, Snack Bars, Pastilles and Other Confectionary
Products.
By Distribution Channel: Supermarket & Hypermarket, Specialist Retailers,
Online Retail Stores, Convenience Stores, and Others.
By Age Group:
Children, Adult and Geriatric.
By Price Point:
Economy, Mid-Range and Luxury.
Key Takeaways
- Based on Price Point, the Economy segment accounted for the largest share of the market in 2021 owing to the low average household income of the country.
- The increasing population of young adults in the country is predicted to drive the market during the forecast period. However, rising prevalence of lifestyle diseases such as diabetes is hampering demand generation in Uganda.
- Detailed analysis on the Strength, Weakness, and Opportunities of the prominent players operating in the market will be provided in the Uganda Confectionery Market Report.
Uganda Confectionery Market Share, By Distribution Channel, 2021(%)
Uganda Confectionery Market Segment Analysis - By Product Type
Based on Product Type, the Uganda Confectionery Market is segmented into Hard-boiled Sweets, Mints, Gums & Jellies, Chocolate, Caramels and Toffees, Medicated Confectionery, Fine Bakery Wares, Snack Bars, Pastilles and Other Confectionary Products. The Chocolate segment is anticipated to have the largest share of the market in 2021 and is poised to dominate the market during the forecast period 2022-2027. The rapid growth of this segment is attributed to the abundance and cheap price of raw materials such as cocoa necessary for chocolate manufacturing. For instance, the production of cocoa increased from only 241 tons in 1970 to 35,000 tons in 2019, with an average annual growth rate of 18.1%. The Medicated Confectionery segment is projected to grow the fastest at a CAGR of 4.3% owing to the high prevalence of minor ailments among children in the country.
Uganda Confectionery Market Segment Analysis - By Distribution Channel
The Uganda Confectionery Market based on Distribution Channel can be further segmented into Supermarket & Hypermarket, Specialist Retailers, Online Retail Stores, Convenience Stores, and Others. The convenience store segment accounted for the largest share of the market in 2021. Convenience stores are small retail shops that sell everyday items which the average person uses. They can range from snack foods to toiletries. The low set up and operating costs of convenience stores have increased the penetration of this segment in the country. Moreover, other distribution channels such as supermarket & hypermarket, specialist retailers and online retail stores are not as developed in Uganda owing to low-income levels and poor infrastructure development. The Supermarket & Hypermarket segment is anticipated to witness the fastest growth at a CAGR of 4.5% during the forecast period owing to the increasing Foreign Direct Investment (FDI) from China. For instance, Chinese investors opened the biggest supermarket in Uganda in 2019.
Uganda Confectionery Market Segment Analysis - By Price Point
The Uganda Confectionery Market based on Price Point can be segmented into Economy, Mid-Range and Luxury. The Economy segment is projected to dominate the Uganda Confectionery market during the forecast period 2022-2027 with a market share owing to the low average household income of the population. The high prevalence of poverty in the country means that there is very little demand for expensive confectionary items. However, the Mid-Range segment is predicted to register the fastest growth at a CAGR of 4.6% owing to the rising Chinese and Indian population in the country. It is estimated that there are around 100,000 people in Uganda that are of Asian origin. Moreover, the exponential rise in investment from China has resulted in an increase in presence of Chinese investors and workers in the country. This is generating demand for high quality mid-range confectioneries in the Uganda.
Uganda Confectionery Market Drivers
Rising Urbanization is Projected to Drive Market Growth
The rapid rise in urbanization is driving the demand for confectioneries as the urban population tends to consume more confectionery items. According to the World Bank, the annual urban population growth rate in the country is around 5.2%, which is one of the highest in the world. The total urban population is projected to increase from 6.4 million in 2014 to more than 22 million by 2040. The urbanization is currently estimated to be around 20% and by 2050, Uganda will be among the most urbanized countries in Africa. This can significantly help the country achieve upper-middle-income status by 2040.
Rise in Youth Population is Anticipated to Boost Product Demand
The rising children and youth population in Uganda is increasing demand for confectionery foods as this demography consumes a high quantity of confectionery items. According to the Uganda Population and Housing Census and United Nations projections, around 50% of the population was below 15 years, and the youth made up 22.5% of the population in 2014. Moreover, the population is forecast to increase from 40 million in 2015 to 141.2 million by 2065 owing to the high fertility rate. The population of people between the age 15-34 years will increase from only 22.7 million in 2015 to 48 million by 2065.
Uganda Confectionery Market Challenges
The High Poverty Rate is Anticipated to Hamper Market Growth
The rising number of people living in poverty in Uganda is challenging demand generation as confectionery products are not staple food items. Even though the country has one of the youngest populations in the world, more than 41% of the people live in poverty. The total number of people living in poverty is estimated to be around 44.3 million. Moreover, around 76% of the population live in rural areas, and 73% of the workforce is employed in agricultural activities. The lack of finances and resources, combined with the large average family size is further increasing the risk of families falling below the poverty line.
Covid-19 Pandemic and Subsequent Restrictions is Projected to Limit Growth Opportunities
The rapid spread of Covid-19 virus and the
increased cases of infections has severely impacted the growth of the
confectionery market as well as overall national economy. Around 127,000
infections were recorded in the country and more than 3230 people died from the
disease. The 4 months of lockdown and border closures led to a major disruption
of imports, exports and manufacturing processes. This resulted in reduced
output by commercial confectionary product manufacturers. Moreover, the
stringent travelling restrictions also reduced footfall in supermarkets and other
stores, further decreasing demand. Uganda’s real GDP grew at 2.9% in 2020, less
than half the 6.8% recorded in 2019 owing to the pandemic.
Uganda Confectionery Market Industry Outlook:
Product launches, mergers and acquisitions, joint
ventures, and geographical expansions are key strategies adopted by players in
the Uganda Confectionery Market. The top 10 companies in of the industry include:
- Wm. Wrigley Jr. Company
- Marika Africa Sweets Ltd
- Mondelez International
- H&C Food Industrial
- Lotte Confectionery
- Britania Allied Industries Limited
- Engaano Millers Ltd
- Ahmed Raza Foods Industries Ltd
- Aya Biscuits Group of Companies
- Dolphin Foods and Beverages
Partnerships/Product Launches:
- In July 2021, Latitude Craft Chocolate has expanded its operations with exporting to the UK through distributor Cocoa Runners. The company which has production facilities in Kampala, Uganda, selected Cocoa Runners as a stockist as the firm shared its ethos, and is committed to sourcing the finest craft chocolate, while ensuring ethical trade practices.
- In April 2019, Mars Wrigley Confectionery, opened a new manufacturing plant in Kenya. The new plant is aimed to serve the growing markets of around 14 countries, including Rwanda, Burundi, Ethiopia and Uganda.