February 1/Western Europe Food and Drinks Insights -- Scandinavia's largest confectionery company, Sweden-based Cloetta Fazer, has completed its acquisition of Finland-based confectionery company Fennobon Oy, which specializes in functional chewing gum products. This move follows its acquisition in September 2007 of Swedish throat pastille specialist Karamellpojkarna. With these acquisitions, Cloetta Fazer is ensuring that it has a sufficient portfolio of functional products, which have offered some of the fastest rates of growth within the global confectionery sector over the past few years.

In Scandinavia, sugar confectionery and chewing gum are very popular forms of confectionery; Sweden has the highest rate of sugar confectionery consumption per capita in Europe, and Finland has the fourth highest rate. Despite this, both countries have not been immune from the global wellness trend that has seen consumers increasingly turn to sugar-free and functional products. However, up until recently, Cloetta Fazer, despite a large product portfolio, has been underrepresented in the functional product category.

Chewing gum makes up around 10% of the total confectionery market in Finland and around 6% in Sweden. Fennobon is Finland's only domestic manufacturer of chewing gum and specializes in sugar-free gum sweetened with xylitol. Xylitol, which was first discovered in Finland, does not cause tooth decay and has actually been found in some studies to repair minor cavities. Nearly all chewing gum sold in Finland contains Xylitol, and recently, international manufacturers such as Wrigley and Cadbury Schweppes have also reformulated some of their functional products to contain Xylitol. Fennobon also sells chewing gum with added vitamins and gum designed to lower cholesterol.

Cloetta Fazer's second acquisition, Karamellpojkarna, also offers functional confectionery products and specializes in throat pastilles containing menthol and eucalyptus. Perhaps owing to the cold climate, throat pastilles are the third largest confectionery segment in Sweden and account for around 14% of the market. Cloetta Fazer is already the largest confectionery company in Scandinavia with around a 40% share of the market in Finland and a 24% share in Sweden. However, to maintain and grow this position, the company has wisely made moves to expand its range of functional products; growing consumer concern with the sugar content of many confectionery products has already seen a shift towards these types of products, and BMI believes this trend is only going to accelerate in the future.

From the January 7, 2008, Prepared Foods e-Flash