The Federal Association of the German Confectionery Industry (BDSI) has looked back on what they characterise as a difficult year for the industry. According to the BDSI, the production volume was above 2021’s level (2.8%), and sales rose by 6.5%; but this only partially covered the additional costs incurred by the companies as a result of the war in Ukraine.
According to the BDSI, the statistical data is not an accurate reflection of a tense economic situation in the industry. In 2022, more than 200 companies in the German confectionery industry experienced skyrocketing price increases and problems and failures in the international supply chain.
“As a medium-sized industry, we demand that the federal government and the European Union take on the major and existential challenges instead of getting lost in the bureaucratic small and small. We urgently need solutions for a competitive and stable energy supply, an opening to combat the ongoing labour shortage and a functioning infrastructure in the areas of transport and digitisation,” explained Bastian Fassin, Chariman of the BDSI. “Instead, companies are burdened with a flood of national and European laws, which are also mostly impractical and extremely bureaucratic. If we continue like this, there is a risk of a market shakeout at the expense of small and medium-sized companies.”
What the BDSI is calling an “enormous cost burden” is becoming a location decision or a question of existence. Location-related burdens include labour costs, the taxes, duration of approval procedures, ‘sluggish’ broadband expansion and bureaucratic burdens.
In spite of relief measures offered by the federal government, confectionery companies still have to cope with significant additional costs for electricity and natural gas. On top of this are uncertainties in procuring raw materials, combined with significant cost increases in 2022 on raw materials including sugar (up to 100%), cocoa (23%), corn (19%) and wheat (9%).
Importantly, domestic supply of impors and experts declined in 2022 and amounted to almost 2.7 million with domestic sales totalling EU€9 million.
According to estimates given by the association, the total production of confectionery and snack products made in Germany rose to 4 million in 2022, a 2.8% increase. In terms of value, production rose to €14 billion, a 6.5% increase.
Labour shortages in Germany are worsening, particularly in the German confectionery industry which, to date, has over 200 companies and around 60,000 employees. 84% of companies in the Germany confectionery industry have reported massive issues with filling vacancies for simple jobs in production that don’t require any training but induction in the company.
More than 50% of companies in the industry also have difficulties with finding suitable trainees. The German government has introduced new regulation related to the immigration of workers to fill spots, but says the workforce needs to be designed in “an unbureaucratic manner”.
Trends affecting German society as a whole are related to sustainability and climate protection, which the confectionery industry is committed to. Sustainability efforts of the industry can be observed in new recipes, certified raw materials, manufacturing processes and packaging.
Using raw materials certified with sustainability standards has been promoted by the industry, in particular cocoa. In 2021, the proportion of certified cocoa reached 79%. In a survey conducted by the BDSI in 2011, this proportion was approximately 3%; demonstrating the industry “is on the right track”. In addition, 94% of the palm oil used in the German confectionery industry is already certified.
The association is involved in the Forum Sustainable Cocoa, an initiative founded in 2012. In addition to members from the chocolate and confectionery industry and food trade, the organisation also involves the federal government and standard-setting organisations such as Fairtrade and the Rainforest Alliance.
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