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Supply Chain

BDSI: Rising Costs Threaten Confectionery Manufacturers

The current cost situation in the German confectionery industry is extremely tense, according to the Federal Association of the German Confectionery Industry (BDSI).

Energy, agricultural raw materials and packaging, as well as transport and logistics were already increasing in price, the group said, but the the Ukraine war has exacerbated this situation significantly.

BDSI Spring Survey

Compared to the same month last year (April 2021), the price of important raw materials for the production of confectionery has continued to climb, such as sunflower oil (+151%), butter (+78.4%), palm oil (+73.3%), wheat (+71 .8%), and skimmed milk powder (+69.6%).

Some 83% of the companies surveyed in the BDSI's study report shortages in packaging materials, while 72% report serious supply problems with agricultural raw materials such as wheat, vegetable oils, glucose, eggs, and milk powder.

The German confectionery industry is a significant buyer of agricultural commodities such as sugar, potatoes, and grain., the group added.

"The federal government must give top priority to consistently strengthening the domestic economy, because only then can jobs and investments in Germany be secured in the long term," said Bastian Fassin, chairman of the BDSI, adding that small to medium-sized businesses were particularly exposed.

Biggest Challenges

Nine out of 10 companies in the German confectionery industry (91%) consider the burden of the war in Ukraine as very onerous for the sector.

The greatest challenges currently facing manufacturers are skyrocketing prices for raw materials, rising energy costs, and concerns about a lack of gas supply.

Furthermore, high levels of sick leave and COVID-related illnesses, coupled with the difficulty in recruiting qualified specialists, are cited as challenges.

© 2022 European Supermarket Magazine – your source for the latest Supply Chain news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.

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