Industry Analysis & Industry Trends
The British sweet tooth has sustained demand for confectionery manufacturers, wholesalers and retailers over the past five years, despite the adverse effect of the global economic downturn. The British love for chocolate helped mitigate the flow-on effects of rapid declines in downstream discretionary spending and increased volatility of input prices upstream.
The industry faces rising internal competition, especially between dominant multinational food companies like Kraft, Nestle and Mars, which are primarily manufacturers of chocolate and confectionery but have taken advantage of their vertically integrated operations to mitigate the incidence of wholesale bypass... purchase to read more
Industry Report - Industry Investment Chapter
Capital intensity for the industry is high. However, labour costs are still a significant proportion of the industry's cost structure given that it requires stock people, sales staff, drivers and marketing professionals to carry out its functions. These roles involve marketing products and taking, preparing, checking and shipping orders to customers. Labour costs such as wages and salaries are estimated to account for 1.6% of revenue, but have fallen as a proportion of revenue over the past five years.
This outcome is consistent with the trend of greater levels of capital investment in technology, such as automated warehousing systems and inventory management that have made a significant contribution in reducing labour dependence while increasing productivity... purchase to read more