Muesli is immune to the economic effects of coronavirus pandemic

Whilst the economic impact of coronavirus pandemic has led to declining sales in several categories of confectionery products, muesli, having consistently shown the fastest growth rate together with biscuits in the last two decades, continues to do well, reported the Association of Hungarian Confectionery Manufacturers at their press event that could be attended both in person and online in accordance with the epidemiological regulations. Guest speakers of the press conference provided an overview of the state of the confectionery industry in the shadow of COVID-19, that has a more encouraging prospect for the Christmas season after the difficult Easter period.

During the pandemic the food industry was primarily hit by the loss of the catering industry, the HoReCa sector including hotels, restaurants and cafés, and the significant decline in exports, which accounted for nearly 40 percent of turnover, said Dr Beáta Olga Felkai, Head of the Department of Food Economics and Quality Policy of the Ministry of Agriculture in her presentation, providing a comprehensive overview of the sector. Most of the more than 4,500 players in the domestic food industry are micro-enterprises, with about seventy large companies and three hundred medium-sized companies operating in the field. Whilst their profitability is constantly improving, the widespread use of advanced digital technologies needed for modernization and automation is not yet typical of the sector, making it more difficult for companies to adapt to the rapidly changing market conditions. Therefore, the Ministry of Agriculture subsidized food processing enterprises with nearly HUF 8 billion from the National Food Crisis Management Program developed as part of the Economic Protection Action Plan, which could be quickly accessed by the applicants with simplified administration.

Consumer demands in the confectionery market are also changing tangibly, and COVID-19 has also accelerated this process, said Sándor Sánta, President of the Association of Hungarian Confectionery Manufacturers. Mass interest is turning to healthy products, which represent a trend rather than a specific category. Functional sweets (e.g. products with high protein or increased vitamin or mineral content and energy bars) can be included here as well as various ‘free-from’ products – lactose, sugar or gluten-free items, which are no longer consumed only by those who has sensitivity to an ingredient – and light, i.e. energy-reduced products.

Judging from the signs, functional food increasingly got in the focus of consumers’ attention, who – stuck in teleworking and home office conditions – are looking for solutions that can ensure the adequate nutrient intake without time-consuming cooking or food ordering. Weight control, aiding digestion, maintaining the immune and vascular systems, or following a clinical (medically prescribed) diet also appear in their ambitions in addition to maintaining supplementary nutrition for doing sports.

The global market for functional products, which amounts to USD 189 billion worldwide, is projected to grow at an average of 8 percent annually over the next five years to reach USD 276 billion by the end of the period. Confectionery industry is mobilizing significant resources for innovation to serve the evolving needs of consumers, as Dr Ernő Gyimes, Associate Professor of the Institute of Food Engineering at the Faculty of Engineering of the University of Szeged analyzed in his presentation.

Cerbona brand name appeared in the domestic market in 1988, the following year our company started the production of muesli and cereal bars, which were new product categories in Hungary at that time – said Tamás Török, Foreign Trade Director of Cerbona Élelmiszergyártó Kft. Our corporate innovation has since responded to consumer needs with ever newer products, making Cerbona a market-leading brand in the categories of muesli, cereal bars, oat-flakes and puffed cereal bars too. Muesli, cereal bars and porridges rich in protein, fibre, vitamins and trace elements and are sugar-free, consumed before, during and after workouts being available in the Cerbona Sport program, as well as the new gluten- and lactose-free porridges are popular among domestic consumers. The company’s latest Raw Bar slices, for example, expand the range of the ‘free-from-all’ category, as they are purely plant-based, their natural taste and sugar content is yielded only by fruits, of which they contain an outstanding amount. Another product innovation of Cerbona is the family of dessert-flavoured cereal bars, with which followers of a healthy diet can also treat themselves.

Although the history of the cultivation of cereals dates back thousands of years, the story of muesli – at least under this name – surprisingly only began in the first half of the 20th century, we learned from the presentation of Dr Róbert Török, Deputy Director and Chief Museologist of the Hungarian Museum of Trade and Tourism. According to the manuals, muesli is a food consisting primarily of cereal flakes and crumbs of dried fruit, which can be consumed mostly with milk. Our word muesli, which is one of the main components of the German word Gemüse (i.e. greens, pottage vegetables), was formed on the basis of the reduced form of the Swiss German word Mus, i.e. pulp, puree, porridge. The word ‘muesli’ originated from its Swiss dialect and spread all over the world.

Chewing gum: the next 5,000 years

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COVID-19 poses serious challenges in the impulse products market, but this cannot end the 5,000-year history of chewing gum. Manufacturers are responding to the changes with innovation and functional products, which were presented by the Association of Hungarian Confectionery Manufacturers at the end of July.

Fifty years ago, in 1970, the Csemege Confectionery Company recorded the first full year of Hungarian chewing gum production, so this significant anniversary provided a special opportunity for the roundtable discussion. The representatives of three companies currently dominating the domestic market participated: the Hungarian-owned Chocco Garden based in Szabadszállás (the successor of the former factory of the Budapest Confectionery Company), MARS, which owns the classic Wrigley brand, and Mondelez, which owns the Halls and Trident brands.

– At least 60 percent of chewing gum consumption is related to activities outside the home, mainly chewing on the go, at work, at school, and buying impulsively at counters around checkouts, so in the first wave of the corona virus epidemic, with many people staying at home and online shopping, adversely affected this product category, said Sándor Sára, the managing director of Chocco Garden and the president of the Association of Hungarian Confectionery Manufacturers, at the event, which was broadcast live on the Internet. – This year is unlikely to be a year of chewing gum.

However, Dr. Róbert Török, chief museologist and deputy director of the Hungarian Museum of Commerce and Hospitality, which hosted the event, provided an overview of the market by reviving more than five thousand years of chewing gum. Archaeologists excavated the oldest relic to date, a piece of tar from birch bark containing tooth marks, in what is now Finland. Tar has antiseptic properties, so it may have played a significant role in oral care at the time, and was sometimes used as a dental filling too. According to later sources, the soldiers of Alexander the Great chewed wild mint, the Eskimos gnawed on whale skin, and the peoples of West Africa chewed the fruit of the kola nut tree. In the Middle Ages, parsley was used to alleviate oral smells, and after the great geographical discoveries, our ancestors also bit into coffee beans and tobacco leaves. Rubber chewing also set out from America on its world-conquering journey. The Mayans made a chewing gum called chicle from a tree botanically known as Archas sapota, which was used, among other things, to reduce the sense of hunger and thirst.

The beginnings of chewing gum production in Hungary

The first commercially available chewing gum in the classical sense of the word was based on the spruce resin used by the North American Indians, and John. B. Curtis began selling it in 1848 in the state of Maine in the United States. In the 1860s, American inventor Thomas Adams, who experimented with chicle, created a kind of rubbery material for industrial production. The habit of chewing gum soon spread across the country and the Adams chewing gum with a tutti-frutti taste, which was later sold in Hungary as well, could already be bought in 1888 from the vending machines of the New York railway network.

Although public belief holds that chewing gum was brought to Europe by American soldiers in the two world wars, it appeared on our continent much earlier. This is also supported by the oldest Hungarian chewing gum advertisement, which Róbert Török discovered in one of the 1902 issues of Budapest Hírlap. The spread of this American passion in Hungary can be dated even earlier, as the popularized Ricy chewing gum, according to the ad, was already available in pharmacies, drugstores, spice and delicatessen shops, in many flavours.

Through economic development and trade relations, it also appeared in Europe and Hungary at the beginning of the history of chewing gum, although it was viewed controversially and was considered both healthy and harmful, and at times considered a rarity, status symbol, or even a shortage item. Between the two wars, for example, the Adams chewing gum was especially prevalent in bourgeois and artistic circles in Hungary, while after World War II it was difficult to obtain, meanwhile intensifying anti-capitalist propaganda in the 1950s also stigmatized the moral-destroying American custom.

However, this did not change the fact that demand and supply and fashion dictated, so by the end of the decade it had become necessary to produce domestic chewing gum, which according to a contemporary article by Magyar Nemzet was first started in 1959 by the plants of the Győri Biscuit and Wafer Factory. However, the real breakthrough ball gum was launched by the Csemege Confectionery Factory ten years later, the chief museologist explained.

At the end of the 1960s, Hungary imported chewing gum worth about $ 50,000, so the Csemege factory bought a French chewing gum production line for almost the same amount. Production began in 1969, initially making 24 quintals of gum balls and pellet-shaped gums a day from rubber. In the pilot plant, which was intended to test a future new factory, the business started to take off so much that by 1973 it had already produced half a million pieces of gum a day, now made of a synthetic material. Production and supply also expanded in the 1980s, with the appearance of the cigarette gum, for example, and the factory also entered the West German market, and then several other countries around the world through the German partner.

Antal Zöld, the retired deputy CEO of the Csemege Confectionery Factory, who participated in the launch of Hungarian chewing gum production, also shared his personal experiences of the beginnings with the audience as a guest of honour at the round table.

Innovation with functional products

Last year, nearly one million tons of chewing gum were consumed worldwide, according to Euromonitor International’s 2019 data, while in Hungary we chew about 2,000 tons a year, i.e. we spend an average of HUF 2,000 per capita on chewing gum. As a comparison in the USA, the world’s largest market, the figure is USD 12, about HUF 3,500 at today’s exchange rate.

Although the data of recent years will hardly be repeated by the domestic market in 2020, the market participants in the current difficult period also look ahead, if you will, to the next five thousand years. Their power of innovation does not falter, the latest product developments are about products enriched with various minerals, trace elements and other food supplements, which not only give the pleasure of chewing, but are also healthy and delicious. From this point of view, sugar-free gums, for example, have always been a particularly healthy product group in the confectionery industry, as chewing improves oral hygiene, strengthens teeth and chewing muscles, and in many cases relaxes, said Sára Sándor.

Debuting in 1964, Trident was the first sugar-free chewing gum to contain three enzymes to help prevent tartar formation. The brand now belongs to the Mondelez International group, which once appeared on the domestic chewing gum market ten years ago, only to return in 2018 with a chewing gum based on cough suppressant candies, also available in the sugar-free version of Halls. The group is planning for the long run under the Halls Gum brand, said Péter Kertész, government and corporate communications consultant at Mondelez Hungária Kft. At the beginning of 2020 the company launched the pellet-shaped dragee version of the gum in several flavours, and by the end of the year they are preparing a study of the changing consumer habits.

Attila Sófalvi, the country director of MARS Magyarország Kft., also known for the Orbit chewing gum, said that after the strong start of the year, a 20-60 percent monthly decrease in turnover was registered in domestic retail chains. However at the same time, sales increased in international discount stores, which covered the complete range of goods for people’s shopping needs. They try to respond to the new situation with, among other things, an online display of impulse buying, which evokes a checkout zone, but added that in the long run they see the solution in expanding their offering with innovative products.

Chocco Garden operates the only classic chewing gum plant in Central and Eastern Europe, said Anna Benke, the company’s business development director. Founded thirty years ago, the original German machines are still in use, in addition to next-generation technology, and 70 percent of their Crazy Gummi products are exported to many countries around the world, from Canada through Brazil and Israel to Japan. They have to meet extremely diverse consumer needs, so consistent quality management is just as important to them as continuous product development, Anna Benke said. Chocco Garden’s innovative products include French fries shaped chewing gum for connoisseurs, for example, but the future lies in functional chewing gum. For example the stimulating Energy Gum, enriched with caffeine, guarana and vitamins, was launched two years ago and is now available in green tea, multivitamins and cocoa -flavonoid superimmune as well as a stress-relieving versions containing zinc and magnesium. In addition to the contents, the looks will also be updated, and with the introduction of a Danish foiling technology, chewing gums with a hidden tattoo pattern in the packaging will hit stores later this year.

Easter hits are granola and biscuits

800 tonnes of Easter sweets – mainly chocolate bunnies and chocolate eggs – are consumed annually
on the Hungarian market, in the value of approximately HUF 5 billion. The Easter confectionery market
has always grown in recent years, and between 2017 and 2018 there was a particularly large
expansion, with a 10% increase in sales. This was mainly due to the shift to higher quality, not the
increase in the number of tonnes to such an extent.

There will definitely be no shortage of Easter confectionery this year, because retailers have already
filled their warehouses and shelves with the usual quantity long before the state of emergency was
declared, so there is no need to worry about someone missing out on chocolate bunnies, chocolate
eggs or other Easter delicacies, whether choosing domestic or imported sweets.

This year, the Association of Hungarian Confectionery Manufacturers predicts a decrease in the
consumption of Easter sweets, because according to surveys, in the current situation, flour, oil, rice
and canned foods are the most popular products, for which consumers have spent and still spend
twice as much as usual.

This will probably not be the best year for confectioners, says Sándor Sánta, President of the
Association of Hungarian Confectionery Manufacturers, adding that he hopes to celebrate Easter next
year under different circumstances.

It is expected that the sums intended for the purchase of food for Easter have partially diverted,
furthermore the motivation for building up reserves may also be more significant than before. Exports
are now limited to many destinations or downright impossible. Domestic small and medium-sized
companies are primarily exposed to the decline and negative effects of market demand, therefore the
priority for both them and their employees is to keep companies alive and preserve jobs, all the more
so because the smoothest possible restart is essential to remaining competitive.

The most negative effects are to be expected in the case of chocolates, impulse-buy products and
unique confectionery sold through premium and exclusive channels (e.g. downtown, at airports, in
cafes), where the decline can be as high as 10 – 70%, depending on the product. Many small and
medium-sized Hungarian companies focus on such products, so aiding them is vital. The market for
snacks and chips is stable. Interest in granola, cereals and functional bars has grown significantly. At
Cerbona's Székesfehérvár plant, for example, they are responding to the increased demands by hiring
new employees and extending their operating hours. Our members also reported an increase in
demand in the biscuit segment. In the case of biscuits, it is currently a great advantage that the
majority of the raw materials are domestic, so here the difficulties arising from transportation have to
be mitigated less, but exports in this case are also a difficult trajectory.

The strong trends in food, and within that, in confectionery consumption, will hopefully not change in
the long run. The demand for quality sweets, the purchase of products with lower mass but higher
value will certainly continue as things return to normal.

The role of food in these difficult times is greatly appreciated anyway, as are the moments when we
can forget about the problems a little and gift those close to us or ourselves.

The Association emphasizes that they also work unwaveringly in confectionery production in the
factories: confectioners, line workers, technicians, quality inspectors and many others make sure they
go to work every day so that production is continuous and customers have access to their favourite

A small source of pleasure, quality sweets consumed in moderation, can be afforded by almost
everyone even in the extraordinary circumstances, so the Association asks consumers not to leave
chocolate bunnies and special confectionery alone on the shelves when they are done buying or
ordering staple products. Nor is it worth leaving bunnies, lambs, eggs and other delicacies in the
shops because they will most certainly be missed during the holidays.

The members of the Association have initiated a number of donations in connection with

Mondelez Hungária offers nearly eight tonnes of Milka Easter sweets to those in need through the
Hungarian Red Cross, and also helps the work of the organization with a cash donation of nearly one
million Forints.

In accordance with its many years of best practice, Haribo Hungária Kft. supports the local
communities and health care institutions in the area with its Easter donations.