Poland is the fourth-largest producer of sweets in the European Union with a 10 percent share in trade within the bloc, according to a report by Bank Pekao. The report also highlighted Poland’s important role globally as one of the leading EU countries that exports to third-country markets.
In 2022, companies in Poland’s confectionery sector had to face many challenges, including the increase in costs, the impact of the war in Ukraine on exports, and changes in the macroeconomic environment. Despite these conditions, the industry performed well and achieved solid financial results.
The confectionery sector, which includes bakery and chocolate products, currently accounts for almost 6 percent of the entire Polish food production sector, with over 700 domestic producers employing almost 30,000 people.
The report confirmed the significance of Poland’s position in international trade, stating that 1 in 10 employees in the EU confectionery industry works in Poland. In 2022, Poland ranked sixth in terms of the volume of sweets sold outside the EU with an 8 percent share of EU exports.
“Poland is also one of the leading global exporters of sweets. In 2021, Poland ranked fourth in sales of chocolate products in the world and ninth in the confectionery products segment,” the report stated.
One of the major challenges in 2022 was the war in Ukraine, which caused a decline in sales to the Russian and Ukrainian markets; there was also decreased demand in Ukraine due to households’ worsening financial situation. Polish companies responded by boosting their sales to the EU, Turkey and the Arabian Peninsula.
The report noted the fragmented nature of the Polish industry compared to its EU competitors. In 2020, the average representative of the domestic industry produced products worth €1.9 million, while the average among the five countries with the largest scale of production was over €6 million. However, Poland’s position is better in the chocolate and confectionery industry, with an average production value of €6.4 million, similar to Denmark and significantly higher than Spain and France.
The costly process of building a brand and expanding to more distant markets, where stronger Western competitors already exist, is challenging. In the longer term, this may also hinder achieving economies of scale under conditions of rising labor costs and a model based mainly on price competition. Analysts conclude that these challenges may lead to industry consolidation.