Confectionary and ice cream market sweetens up the business scene
The confectionary and ice cream market in the Philippines is experiencing robust growth, projected to increase by eight percent annually, according to the United States Department of Agriculture (USDA). This expansion is being fueled by Filipinos' passion for sweets and the positive shifts in the country's economic landscape.
Filipinos exhibit a deep-rooted love for desserts, embracing a wide range of traditional and contemporary sweet treats. Desserts hold a special place in the Philippine culture, being an integral part of everyday life and special occasions.
As the country’s economy demonstrates progress and the middle class expands, accompanied by rising disposable incomes, consumers are increasingly inclined to indulge in high-quality confectionary items and artisanal ice creams. This changing consumer behavior presents a lucrative opportunity for manufacturers to introduce innovative products that cater to the evolving tastes of Filipino customers.
As such, the USDA's Foreign Agricultural Service (FAS) is urging US suppliers to "expand their footprint, with niche opportunities for established brands, private labels, and 'free-from' options" in the Philippines' sweets market.
"Fueled by Filipinos' fondness for food indulgences, rising disposable incomes, and increasing urbanization, the $1.2 billion confectionery and ice cream market is expected to see robust growth of eight percent annually through 2028," the FAS said in a June 20 report.
The Philippine sweets market will expand faster than the projected five percent per annum across the entire Asia-Pacific region, with sales seen reaching $1.8 billion in 2028, the FAS said.
"Filipinos, particularly those in the upper and upper-middle income brackets, enjoy indulging in imported confectionery and ice cream, not only as after-meal treats but also as popular gift choices," the FAS noted.
"Though price matters, they prioritize quality and unique flavors and are willing to pay more for established brands and innovative offerings," it added.
In 2023, a third of the products sold in the market were imported, worth $390 million. American sweets exports accounted for only six percent, or $23 million, of Philippine retail sales last year.
According to the FAS, the top-selling sweets in the Philippines were chocolate confectionery, which cornered 38 percent of total sales; ice cream (34 percent); sugar confectionery (25 percent); and gum (three percent).
Local food manufacturers dominate the market with a slice of two-thirds of sales.
The FAS noted that Gokongwei-led Universal Robina Corp. (URC) sells the most chocolate and sugar confectionery in the country.
Tycoon Ramon Ang's San Miguel Foods is a major player in ice cream sales, competing with Froneri and Unilever-RFM. Columbia, another homegrown brand, is also popular in the gum and sugar confectionery segments.
"The United States captured a 15 percent share of chocolate confectionery imports. This highlights the potential for growth in other categories, where US market share currently sits at three percent or less. Achieving growth will require navigating competition from regional players who benefit from zero-tariff trade agreements, as well as competitors from the EU and UK," according to the FAS.
As the Philippines' confectionery market gears up for continued growth and innovation, the stage is set for a flavorful journey, with both local and global players vying for a share of this burgeoning and dynamic market landscape.