Current Trends in Bulgarian Trade with Chocolate
According to a report of Euromonitor International , in 2013 the average growth of the chocolate industry in Bulgaria was 6%. Consumer confidence has been restored after the slowdown of the economy between 2009 and 2012 and, as a result, consumer spending on chocolate has risen.
The leadership in chocolate confectionery in 2013 belongs to Mondelez Bulgaria. The company accounts for a 43% value share and is followed at a distance by the other multinational company in the category – Nestlé Bulgaria AD with a share of 22%. The impressive results of Kraft Foods Bulgaria are achieved on the back of a presence in virtually all chocolate confectionery sub-categories – bagged selflines, standard boxed assortments, countlines, seasonal chocolate and tablets. In 2013, the company expanded its presence within chocolate confectionery as it entered a category that it did not serve before – bagged selflines. The new brand in bagged selflines – Milka Crispello, is enjoying excellent distribution, in-store positioning and is advertised actively on national TV channels.
The present state of international trade in the sector can be analyzed through several trade indices, which describe different aspects of Bulgaria’s position in the global market for chocolate confectionery.
Table 5. Key Trade Statistics for Bulgaria’s Trade in Chocolate Confectionery and Related Products
Source: Eurostat and own calculations
Imports, Exports, Trade Balance (BOT)
Graph 2. Imports. Exports, BOT of Chocolate Products (2004 – 2013)
While imports follow a steady pattern of growth during the period with the exception of 2009, the export growth rate is quite volatile. After a period of relatively stable growth (2004 – 2008), the value of exports decreased by 19.5% in 2009 and skyrocketed in 2010, increasing by more than 2.5 times. A new slump was observed in 2011. The pace of growth has hopefully been restored since 2011. The compound growth rate of exports is 25.26%, underlining the increasing importance of trade for the Bulgarian economy. Throughout the whole period the country maintains a trade deficit, meaning that the quantity imported exceeds the exports. This might be a sign for weak export competitiveness of the Bulgarian economy which is the reason for its inability to cover its import expenses by the revenues from exports. The local businesses may be unable to produce higher value-added goods and services and to create demand for these products abroad. However, a trade deficit is not necessarily negatively influencing a country’s GDP and trade relations. More imports also mean higher price competition and a greater variety of products for the final consumers. For a conclusion to be reached, additional research is required to establish the main reasons and factors influencing the negative trade balance of Bulgaria.
Terms of Trade (TOT)
Graph 3. TOT with Chocolate Products (2004 – 2013)