The Federal Association of the German Confectionery Industry e.V. (BDSI) complains that there is a shortage of important packaging materials and raw materials. This could have consequences for the production of chocolate Easter bunnies.
The Federal Association of the German Confectionery Industry e.V. (BDSI) looks back on a largely stable development in sales and turnover in its balance sheet for the confectionery industry in 2021. Production volume was just above the previous year’s level (+1.3 percent), while sales rose by 2.2 percent. However, the availability of statistical data obscures the view of the clearly tense economic situation in the industry, explains the association. In addition to the effects of the Corona pandemic, the – sometimes dramatic – increase in raw material prices as well as in the costs of energy, logistics, and packaging materials are causing problems, especially for the more than 200 industrial manufacturers of confectionery and snack products in Germany.
Currently, the companies are experiencing enormous cost increases in all areas. This also relates to the costs of occupational health and safety as well as personnel. These burdens are unprecedented in this form, they say. “The market for important raw materials has been emptied, long-standing supply chains no longer function. This could also have consequences for the upcoming Easter business, for example that not all popular products such as chocolate bunnies can be produced as planned because important raw materials, packaging materials, or freight capacities are not sufficiently available,” explains Dr. Carsten Bernoth, Chief Executive Officer of the BDSI. “Manufacturers are particularly feeling the effects of significant price increases and, in some cases, delivery difficulties in the purchase of important agricultural raw materials such as wheat, soy, and sugar, as well as packaging materials.”
“Breaking point has been reached”
Costs have risen significantly in the procurement of packaging materials and in the areas of logistics and energy. In addition, there is still insufficient freight capacity in international logistics on the road and rail as well as on container ships. Containers are in short supply for transporting goods around the globe. As a result of the Corona pandemic and temporarily idle global trade, many companies have reduced their capacities and inventories. Now, these downsized production capacities are meeting surging demand. While it cost about $2,000 to ship a standard 40-foot container from Shanghai to Rotterdam in December 2020, freight rates were nearly $10,000 a year later (December 2021) (World Container Index). “The breaking point has been reached. Politicians are now called upon to protect medium-sized companies from further costly and bureaucratic burdens. Otherwise, in the medium term, there is a risk of losing the SME economic structure in Germany, which has so far proven to be robust,” says Bernoth.