Today's confectionery market is very diverse, both in terms of the products offered and their prices. In this post we will delve into the ins and outs of confectionery price calculation and try to point out what determines the price of confectionery.
Product complexity vs. price.
A key factor affecting the price of candy for children is the degree of complexity of the product. Whether we are talking about a lollipop or chewing gum that is relatively simple to make or a much more complex product is important for the final price. In the case of sweets of a complex nature, not only is the production process itself more advanced, but the cost of packaging itself can be significantly more expensive. It is worth noting that sugar-free products, which are gaining popularity, are, as a rule, more expensive than their counterparts with sugar.
How does the production process affect the final value of sweets?
In the case of simple products such as lollipops or candies, the key influence on the price is the production process - manual or machine. Automation of the production process, characterized by greater efficiency, often translates into a final cost reduction. Of no small importance are the prices of raw materials used in the production of candy. Prices of raw materials can fluctuate from a few to even tens of percent in a year. Their availability can also be a problem. The prices of cheap sweets are in the range of EUR 0.15 - EUR 1 on the store shelf. Several products in this segment are shown below.
For more complex products, the number of factors affecting the price increases significantly. The first is the time and resources spent on creating the concept, which is the task of research and development departments. Then comes the process of designing molds for packaging, and the quality of the material used can vary significantly. The whole leads to a more complex production process, often requiring more manual labor than for simpler products. It is worth noting that each stage of creation affects the final price. The result of these activities are products whose prices are presented in the range of 1 to 5 EUR on store shelves. Examples of products can be seen below.
Design costs and production control.
Another factor that affects the price is the costs associated with the preparation of the design. In this case, a team of graphic designers works with the quality department to make sure products meet regulatory requirements, among other things. This process, although often overlooked by consumers, is crucial to maintaining the highest quality standards, but it generates costs. An important element that plays a role in pricing is production control. In our case, a dedicated department meticulously oversees this process at the factories, ensuring that each product meets high quality standards.
Currency, transportation and other factors.
In many cases, production takes place in a different country than the place of final sale, making currency exchange rates a critical element in assessing costs. Also, the choice of transportation plays a key role - by sea, road or air. The sea route, which is usually the cheapest, brings with it various problems such as transportation time, the cost of refrigeration when choosing a temperature-controlled container, large fluctuations in freight prices related to political unrest. Freight-related costs, such as fuel prices and customs fees, can significantly affect the final price of candy on store shelves.
Confectionery price calculation summary.
We can see that the price of candy is the result of the arrangement of many factors. The key element is the complexity of the product, which affects not only the production process, but also the cost of packaging. This applies to both low-cost and more expensive candies. The production process, automation, quality of raw materials, as well as design and production control costs should also be considered. In addition, currency exchange rates and transportation costs are important price drivers. It is worth being aware that the price of candy is not random, but is the result of complex processes and decisions made at each stage of production. After all, behind every package of candy is not only a delicious product, but also a story full of effort, innovation and attention to the highest quality.
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