With 99% of consumers purchasing confectionery, it remains a very significant category to most independent retailers, even though it has seen some decline.
Hancocks Cash and Carry says it is bucking the trend, completing 2006 with a growth of 2% in both sales and customer visits.
Richard Brittle, purchasing director of Hancocks, says: “While confectionery remains a highly competitive market, there are many opportunities for good profit if retailers remain proactive and flexible. The success of Hancocks really does highlight to retailers that if you are proactive and work hard to develop the category, there are plenty of sales to be achieved from confectionery – despite the mounting supermarket pressure. We have no shortage of customers demonstrating double figure growth, highlighting the ongoing potential of the market.”
According to the 2007 Mars Confectionery report, confectionery continues to provide wholesalers and cash and carries with sales opportunities. Andrea Taylor, trade relations manager of Mars Snackfoods, says: “Mars’ policy of investing in fewer but bigger and better promotional activities has been very successful in driving incremental sales in 2006.
“Within each of the every day chocolate segments, filled bars, bitesize and block, Mars has grown share, despite the market experiencing a slight decline. Wholesalers and cash and carries can look forward to more of the same from Mars in the rest of 2007, where we will commit to invest to help depots make the most of this lucrative category.”
Mars is introducing its first Christmas self-eat product to the market this year in the form of Galaxy Mistletoe Kisses. Suited to the impulse and independent retailers and targeted at female consumers the Mistletoe Kisses bars include three Galaxy chocolate pieces with a mousse and caramel centre.
Taylor says: “By investing in Galaxy Mistletoe Kisses, Mars will help drive growth in the pound;4m Christmas self-eat category. It is born from the hugely successful Galaxy brand, which grew by 18% in 2006 and is now the number two block brand in the market worth pound;162m.
According to Mars, boxed chocolates is another key focus at Christmas, representing 75% of total Christmas sales with a total value of pound;404m. The impulse sector accounts for pound;69m of the boxed market. This year is the 10th birthday of Celebrations and Christmas will see tins and cartons in various sizes.
Taylor says: “The Celebrations portfolio delivers 60% of its total brand sales during the Christmas season, making it a must-stock product in the 16 weeks leading up to Christmas. Celebrations delivered a 7% sales uplift in tins last Christmas while the 460g large carton maintained its leadership position within the twistwrap box sector.” Maltesers is another key member of the boxed market, which, Mars says, remains the number one selling treat brand all year round and the key Christmas period accounts for 44% of yearly sales.
Another new product for Mars this year was the introduction of Mars Planets in March of this year. Mars is introducing two new tube variants, Mars Planets and M M Peanut, to its Christmas 2007 range. This category shows strong year-on-year growth, according to Mars, with it owning three out of the five top selling tubes in 2006. Minstrels, Maltesers and Revels grew 44%, 28% and 14% respectively.
In terms of a recommended range for smaller stores, Taylor suggests Galaxy Mistletoe Kisses, Celebrations large carton, Maltesers 146g box, Maltesers tube and Galaxy Collection selection box.
Dark chocolate is a prime growth area in the confectionery market, according to Cadbury Trebor Bassett, with sales growing by 50% since 2004 and as a result dark chocolate now accounts for 17% of large block sales. Now nearly one in three shoppers buys dark moulded chocolate every year.
Following this trend CTB launched Cadbury Flake Dark in 2006 and Cadbury Bournville Deeply Dark in February of this year.
Kate Harding, acting head of customer relations of CTB, says: “Cadbury Flake Dark is perfect for consumers looking for a moment of sheer indulgence. It delivered pound;4.3m in retail sales in its first six months, generated high repeat purchase and importantly has attracted new consumers into the Flake brand.
Cadbury says that CTB products account for 24.6% of seasonal confectionery sales during the Christmas period. This year Cadbury is adding Cadbury Magic Elves to its Christmas range. The novelty packs come in eight characters, made of milk chocolate popping candy. The Elves will also feature on-pack across the Christmas range, including selection boxes and advent calendars, tieing the Cadbury products together.
Harding says: “The magic of Christmas is the key focus for our 2007 Christmas range. The portfolio offers important core Christmas range solutions for all retailers and delivers what shoppers want during the busy festive period with the injection of some innovation.”
Five months after its launch, Heaven has driven premium blocks to become the fastest growing area of confectionery for independent retailers, according to Nestl eacute; Rowntree. The company expects the growth to continue with further TV advertising from September. Graham Walker, trade communications manager of Nestl eacute; UK, says: “Chocolate blocks account for 12% of all confectionery sales in independents. Heaven was launched in February and to date has counted for 75% of incremental sales in the last 12 months. It now makes up 25% of all premium blocks sold. Premium blocks have higher sales value which is good for retailers and wholesalers.”
A new Heavenly Truffle Collection will be supported at Christmas as well as the new Black Magic Dark Collection. The new pack and chocolate design contains Hazelnut, Praline, Simply Black Magic, Orange Zest, Amaretto Crunch, Smooth Dark Truffle and Mocha Truffle. A Simply Black Magic Thins, containing 18 dark chocolate slices, will also be available.
Quality Street has two new sweets, Toffee Deluxe and Milk Chocolate Block and Strawberry Delight and Orange Creme have been improved. The After Eight range is being extended with the launch of After Eight 85% Dark.
Walker also believes two other areas in the confectionery category are important, permissibility and sharing. According to Nestl eacute;, 80% of children’s confectionery is bought by adults on behalf of children and adults are becoming more and more aware of health issues. Nestl eacute; has worked to remove artificial colours from Smarties and have 25% real fruit juice in Fruit Pastiles, while making mums aware of their actions to encourage permissibility.
The sharing category, according to Nestl eacute;, is worth pound;583m and has grown by 10% since last year. This year has seen the launch of pouch bags and new additions to the range from Nestl eacute;.
Nestl eacute; recommends that all retailer stock Quality Street cartons, as well as the counter top display of the bigger versions, After Eight 300g, Heaven Pearls Praline, Black Magic 265g and Smarties and Fruit Pastilles Giant Tubes.
According to Green Black’s, it has grown 46% year-on-year in gifting, with even higher growth around key Easter and Christmas occasions. Carol Welch, marketing director of Green Black’s, says: “To help drive the growth of premium chocolate it is important to highlight the use of high quality ingredients in products and educate people about the difference this makes to taste, and why they should pay more for them.”
She recommends that the key variants from the large 100g blocks and small 35g bar range should be stocked. This core range would include Dark 70, Milk, Maya White 100g and Dark 70 and Milk 35g.
Welch says: “There is a large opportunity to grow the value of the category by trading consumers up to premium chocolate – which is a relatively unexploited area in wholesale accounts. This is a key source of growth for Green Black’s into the future but as a relatively small Features > Business, partnering the wholesale channel will be a very important part of achieving this growth.
“Premium chocolate is underdeveloped in the wholesale channel relative to other parts of the trade, and Green Black’s sees this as a big opportunity to drive category value. We have started to work with the wholesale channel to develop this opportunity and where we are present, our business is growing double digit.”
Dave McNulty, customer director of instant consumption channel at Kraft, says: “One of the main trends driving the chocolate market at the moment is the growth of the premium chocolate sector. Premium branded tablets in particular are up in value by 19% on last year, worth pound;50m.
“Dark chocolate is also a key growth sector. When looking at chocolate tablets, milk chocolate remains the number one selling variant, however, statistics show that dark chocolate is the fastest growing year-on-year.”
Kraft Foods is launching a new case size of 10 for Cote d’Or, to make it more suitable for the convenience sector. Another development is the Toblerone Fruit and Nut variant.
McNulty says: “We recognise that it is important to re-vamp brands in order to excite existing customers and to attract a new market. We chose to launch a Fruit and Nut variant of Toblerone as there is a huge opportunity within the sector, which is worth a massive pound;68m and still growing.”
The sugar confectionery market is fairly stagnant, according to Mintel, and the future is somewhat uncertain as it faces up to an increasingly restricted core consumer base. Primary considerations will therefore be achieving the balance between health and reassurance for adults, while retaining the fun and treat factor for both adults and children.
Andy Johns, sales manager cash and carry and wholesale division of Sweet Cred UK, says: “Wholesalers play a key role in our business as they enable us to service a wide-reaching and diverse array of customers, from independent retailers, to hospitals, to leading night club chains.
“The most significant issues are child obesity and the growth of diabetes. In addition cultural dietary requirements play a factor when developing confectionery lines. Sweet Cred prides itself in offering something for everyone and takes the issue of child obesity very seriously – thus the emphasis on Big Treat, Less Sweet.”
Sweet Cred Jackpot bags contain sweets and toys, and Sweet Cred says they are a must stock item. According to Sweet Cred, it is the first to market with windows in the bags to show consumers a preview of the treats and fun within the bag – children can ensure they get different toys and games each time they buy. The wide variety of contents and a window encourages repeat purchases as children keep going back for more.
Johns adds: “Wholesalers who are achieving the best sales with Sweet Cred are ensuring they have the latest additions to the range, and making the most of the full colour display units by supporting with in-store theatre and off-shelf displays. Wholesalers can also use direct mail to highlight new lines.”
Sugar confectionery is currently worth just under pound;750m, according to Cadbury Trebor Bassett, making up a quarter of the total UK confectionery market, so it is critical to offer retailers a good selection in depot.
In June, Bassett’s Allsorts had a change of brand identity, pack design and recipe and Maynards Wine Gums Light were launched in May with half the sugar and 30% less calories. Meanwhile, CTB says, the launch of Trident in the UK has driven 19% growth in the UK gum market.
Trident was launched in January and CTB promised to bring pound;100m worth of growth to the UK gum category. CTB reports that projections indicate it will be half way to reaching this target within the first year of launch.
Harding says: “Cadbury Schweppes holds the second largest gum share in the world and has the number one position in 18 of the 50 gum markets. CTB is bringing proven global innovations, Trident Splash and Trident Soft, to the UK gum market.The number of British consumers trialling Trident and repeating their purchases is rising every month, showing there is still plenty of potential for the gum revolutions to keep driving the growth of the UK gum market.”
The Wrigley Company is also moving into the fruit arena with the launch of Extra Fusion in Spearmint with a twist of Melon and Peppermint with a twist of Berry. Alexandra MacHutchon, communications manager of Wrigley, says: “We are extremely pleased to add Extra Fusion, a new and exciting twist to the Extra Brand. The range is set to bridge the gap in the consumer need states between enjoyment and freshening and will also capitalise on the emerging consumer trend of seeking products and experiences to stimulate new sensations.
“The wholesale channel continues to be extremely important to Wrigley. Ensuring that the best possible service and advice is offered to wholesalers so they are fully stocked and in a position to offer independent retailers the full range of mints and gum is paramount to Wrigley.”
Per Hen eacute;rius, managing director of Haribo Dunhills, says: “The last year has certainly been a fairly tough one for the confectionery market in general. The independent sector is continuing to struggle. It has seen sales of sugar confectionery decline by almost 12% in the past 12 months
“We believe that suppliers and wholesalers can help redress this by encouraging independents to put their focus behind the best-sellers, keep an eye on consumer trends such as the move towards no artificial colours, and reviewing their range regularly to include new products which will maintain interest in the range and keep their customers coming back for more.”
Haribo has launched Haribo Lite and Rotella this year, as well as two new drum countlines, Rainbow Twists and Fang Teeth.
Hen eacute;rius says: “Around 45% of our business goes through the cash and carry and wholesale sector, so we put a lot of focus into developing brands and bespoke marketing support for our customers in this channel of trade.
“In order to succeed you need to develop a strategy which pulls through not just from wholesaler to retailer, but also from retailer to consumer and this year we are investing in excess of pound;7m in marketing support for Haribo and Maoam.”
=== Buyer’s viewpoint ===
Trading in the category is good, ironically with the bad weather, confectionery sales are up on the norm. In the summer a lot of the product melts on the shelf, this year it’s doing the reverse. Although the big problems now will be the result of the floods. Cadbury’s Sheffield factory has closed and there will be no production for eight weeks.
Mars are ahead by 21%, Cadbury are ahead too. Planet, the new bar from Mars is doing very well and they are putting a lot of hard work in to merchandising and marketing it.
Chocolate is still doing well despite the general trend to go healthy and see reduced sugar products on the increase. The consumer is still keen to go healthy and has been for the last two years or so. Premium chocolates are dong very well – Green Black’s and the others – consumers want to spend on good quality products, especially chocolate.
Mars is very good at supporting the category, but so is Cadbury, although it has some ground to make up. Nestl eacute; Rowntree is on an even keel.