Despite a year of almost constant comments on finance, credit crunch and recessions, the confectionery industry is holding steady, and in some cases growing. Confectionery is synonymous with Christmas, as gifts, as something to share and as a chance to be treated after being good all year.
Graham Walker, trade communications manger for Nestlé UK, says: “The economic decline has resulted in an increase in penetration and footfall for local stores. This plays into the hands of convenience retailers, especially at Christmas when shoppers attempt to spread the cost and buy less but more often. For retailers who get their range right there is a great opportunity this year. More than ever though, it is vital that retailers stock up on big brands that consumers know and trust.”
Following on from the success of its Easter version, Nestlé has introduced a free standee for cash and carry depots that tells retailers what price they can buy the product at, what they can sell it at and what percentage they will make from this. This version also announces the best sellers in the range.
Nestlé is once again running its 50% extra free promotion on After Eight, running from September for a limited time. This aims to encourage consumers to purchase After Eight early in the year and then again at Christmas. Nestlé has also introduced a hollow figurine in the shape of a penguin with Smarties inside.
Walker adds: “The clear message to retailers this year is stock a tight core range of big brands. Nestlé Confectionery is helping retailers by supporting its big brands with marketing support that will drive customers into stores. We will also be demonstrating our ongoing commitment to help consumers reduce, reuse and recycle waste.”
Bep Sandhu, trade relations manager of Mars, says: “Retailers know that in times of recession consumers are looking for low cost ‘pick me up’ treats. Wholesalers can take advantage of this by ensuring they stock and correctly merchandise the confectionery products retailers are looking for. These are often the lines they know and trust. Provide your customers with a core range and it will drive sales for them and for you.”
According to Mars, confectionery goes hand in hand with seasonal events such as Christmas and with a market valued at Â£524m in 2008, Christmas confectionery represents a great opportunity for wholesalers to adjust their range and maximise sales. Mars has focused on a core range of SKUs to drive festive sales, including the Maltesers Tree Box and the boxed format of Mistletoe Kisses.
According to Mars, Mistletoe Kisses had a phenomenal launch in 2007, delivering Â£3.4m in sales value in 2008 with a consumer media campaign and strong in-store execution.
Kate Harding, trade communications manager at Cadbury, says: “Last Christmas, Cadbury maintained its position as the leading confectionery manufacturer with a 25.4% share of the market, with value sales growth of +1.3% on last year. Research has shown that Cadbury is seen as an essential part of traditional Christmas with consumers and also the confectionery brand they most associate with their childhood Christmas. Therefore, we would advise retailers to stock up early on Cadbury Christmas products and maintain availability throughout the season to achieve maximum sales.”
New for this year are Snow Bites, chocolate balls covered in a crispy white dusted shell.
Harding says: “We have created Snow Bites in response to an opportunity we identified within the self eat segment of the novelty category, because last year sales were up 25% on 2007, with a total value of Â£8.7m. We are extremely confident about the success of Snow Bites because they taste great and are also very seasonal – we expect them to be similar in appeal to Mini Eggs at Easter.”
Also joining the Christmas range is the Magical Advent calendar, the chocolate treats get bigger the closer it gets to Christmas, starting with a 4g chocolate and ending with a 16g chocolate cracker.
Cadbury has also announced a partnership with Make-A-Wish Foundation and will be donating Â£400,000 to the charity over the next three years. This partnership will feature on the front and back of Cadbury selection packs, advent calendars and Snow Bites to drive awareness of the charity.
Natalie Brown, senior brand manager of Green amp; Black’s, says: “Our chocolate is showing strong growth in the wholesale channel. Green amp; Black’s has helped lead the growth of premium chocolate and the launch of our hero lines into delivered wholesale have delivered double digit growth. We are now looking at further expansion based on this growth.
“Our gifting offering is set to excite wholesalers this year. Green amp; Black’s has introduced a new-look, eye-catching gifting range to help Christmas sales peak within gifting. The new design, available to stockist from September, is set to interrupt and engage consumers at point of purchase and encourage trading up into the premium gifting category to drive retailers’ profits this Christmas.
“There’s some great momentum behind premium gifting at the moment, and we’ve got a stronger gifting range than ever for this Christmas. By combining beautiful chocolates from a well respected brand in vibrant new packaging and creating them in an ethically sound way we are able to offer consumers the ultimate Christmas gift.”
Tangerine Confectionery has a range of seasonal products including, Taveners Fruit Jellies, Taveners Cartons, Anthon Berg range of liqueur chocolate, Princess Marshmallows Tin and Butterkist Popcorn Tubs.
According to Tangerine, confectionery has been a popular Christmas gift for many years, and with the recession still biting, it’s predicted that it will be more popular than ever as consumers look to get more value for money this festive season.
Anthon Berg Chocolate and Marzipan Fruit Discs are available from September and a limited edition tin of Princes Marshmallows will also be available.
Kraft Foods says, for the third year running, 2008 market data showed growth for Terry’s Chocolate Orange, which rose 6% in value and won a place in the stockings of nearly half a million new consumers across the UK.
Terry’s Chocolate Orange Milk in 2009 will feature a seasonal design of Santa Claus and a cut-out in the shape of the moon revealing the Chocolate Orange Ball.
Louise Stigant, commercial director of away from home and convenience at Kraft Foods UK, says: “The design really captures the magic of Christmas and looks fantastic on the shelf. It makes the Original Milk ball even more appropriate as a gift, and we hope it will prove popular with loyal fans and new customers alike.”
Last year Kraft launched Toblerone Tinys and this year consumers will be able to join the hunt for a Golden Tiny in promotional packs. Winners will be able to claim one of 300 presents from the website.
Stigant adds: “Customers love Tinys, which gives them the unique taste of Toblerone in a miniature format. This promotion gives an added incentive to buy, and we’ve got some fabulous prizes to make Christmas extraordinary for the winners – it’s bound to cause a stir and get customers searching for their Golden Tiny.”
=== Buyer’s viewpoint ===
Jonathan Summerley, Hancocks senior buyer
The 2009 Christmas season is looking very positive for independent retailers, despite the state of the market. We have not yet had a year without Woolworths and like pick and mix, their demise has significantly reduced the supply of seasonal confectionery on the high street. Shoppers will want to purchase these goods and so the opportunity to make a decent profit from selling a creative range of Christmas confectionery stares many retailers in the face, if they choose to react to it.
Value is where it’s at for the moment and we can cater for that need admirably. Suiting all price points and ages, our festive range really can give the bigger retailers a run for their money – every independent retailer can make a profit from Christmas confectionery and we will happily show them how.
Specialising in confectionery, we have good relationships with many suppliers and we truly need their continued support in order to drive the independent market forward. We need their help to provide a level playing field for the smaller retailer so that they can continue to compete alongside the larger players. A long-term healthy market requires all sizes of retail operation and it is in everyone’s interest, to ensure that this structure is encouraged.
=== Product Controller’s viewpoint ===
Ian Irvine, Product Controller at Sugro
While Christmas ranges – such as gifting, sharing, indulgence and eat-now opportunities – will never be tight, there has nevertheless been a trend towards range rationalisation, especially among the major confectionery suppliers. This is a welcome move, as most independent retailers cannot hope to stock a huge range, without having potential residual issues. Â Novelties continue to perform exceptionally well within our sector, especially impulse lines in the “under a fiver” category and most suppliers have been diligent in exploiting this profitable area. Alongside the perennial Lindt Reindeer and Santa, we now have Snowmen and Penguins, and we must not forget the licensed products that can return margins that are moving towards acceptable. Â While we like to think that we work in partnership with most suppliers, Cadburys and Mars have stood out from the crowd in terms of really thinking about our sector and providing the correct packs and promotions to exploit opportunities in a crowded market. Â We do however want to support medium size companies who have genuine niche products that again, can add value. In line with our impulse focus we can’t ignore some big hitters i.e. After Eights, Maltesers, Selection Boxes and Cadbury Sugar Cartons. We don’t, however, want to lose the retailer money by having too much emphasis on large tins and twistwrap.
From our suppliers we first look for an understanding of the impulse and convenience market place and a willingness to grow our sector in partnership with our business. There are products that are right for us, and there are ways of promoting them that can return profitable seasonal volumes, and we will always support suppliers who provide impulse sector exclusive packs which are supported in a way that ensures the consumer gets a value for money offering at their local store.