With all the concerns about obesity levels – particularly in children – it’s a tough time for confectionery companies. They want to sell more, but in the current climate encouraging people to eat more of their products is a delicate business. Their reaction has been the creation of new categories such as everyday sharing with the underlying message that it’s okay to eat confectionery every day as long as you share it. Then there are indulgent treats – products that are so special that you should save them for special occasions.
Masterfoods, for instance, has rebranded its king-size range. So new Duo replaces the Mars and Snickers Big Ones. This means that instead of one giant bar, Duo is a two-piece format so consumers can choose whether they eat it all at once, save half for later or share it with a friend. In addition, Masterfoods has renamed Twix king-size as Twix Xtra.
However, Cadbury Trebor Bassett (CTB) is increasing the weight of one of its best-selling bars, to cash in on the informal sharing occasion. This means that the Cadbury Dairy Milk 200g blocks will be replaced by a new 250g bar.
Mike Tipping, head of customer relations at CTB, says this up-sizing follows a trend that has been successful in Australia and New Zealand. “The transition from 200g to 250g reflects the continuing trend towards sharing seen across the UK, particularly when consumers are spending time together with their families.”
CTB is certainly giving its sharing products a big push in 2006. The company is investing pound;7m in support for its Big Night In range, comprising Snaps and its new Sharing Boxes. CTB reckons these two lines will grow the category by pound;100m over the next few years.
Cadbury Snaps, which were launched in September 2004, have so far achieved sales of pound;19m. The brand has been boosted by two new variants – honeycomb and coconut. CTB research found that consumers regularly search for a variety of flavours when selecting products to share with others, and that often more than one pack of Snaps is purchased at a time. It therefore hopes that the new flavours will build on existing successes and drive incremental sales for retailers by attracting new consumers to the category.
The research also revealed that 64% of consumers would buy Snaps in honeycomb, and 49% of consumers would buy Snaps in coconut. Honeycomb is a popular flavour with broad appeal and is expected to become the third highest performing variant after milk chocolate and mint, while coconut has the fourth highest penetration of all chocolate flavours and is the second most popular choice among 16- to 30-year-old consumers.
CTB’s Sharing Boxes contain individually-wrapped, bite-sized chunks of chocolate. There are three: Cadbury Dairy Milk; Cadbury Dairy Milk Variety; and Cadbury Crunchie – all of which retail at pound;2.49. Cadbury Sharing Boxes and all variants of Cadbury Snaps come in shelf-ready packaging.
Meanwhile, Nestl eacute; Rowntree has decided to focus on nutritional labelling and is rolling out the Nestl eacute; Nutritional Compass which aims to help consumers make more informed choices about their diet and enjoy a more balanced lifestyle. The compass will appear on the back of packs and will highlight specific nutritional information and advice on guideline daily amounts. A calorie count per serving will appear on the front of packs.
Nestl eacute; Rowntree sales communication manager Graham Walker explains: “Consumers are becoming more and more interested in the nutritional value of the foods they purchase and consume. As such they are actively seeking out products that clearly communicate nutritional information with particular reference to calorie and fat content. We have conducted extensive research into this initiative and consumers have said that they appreciated honest, clear communication and saw this as a positive step forward for confectionery.”
The calorie and fat content of Nestl eacute;’s next scheduled launch has not been released but expect it to be near the top of the range. The product is Aero Chocolate Truffle, described as a combination of chocolate truffle on milk chocolate Aero bubbles, covered in a milk chocolate shell. This launch follows an extremely successful year for Aero. According to ACNielsen figures, it was the fastest growing top 20 confectionery brand in 2005, with sales up 33%. This growth was thanks in part to the launch of Aero Bubbles and Aero Caramel.
Walker says that for Nestl eacute; 2006 will be about creating bigger and better events, and that the return of the Kit Kash promotion has got it off to a good start. “It was a very good promotion for us in 2005 but it will be even better in 2006,” he says, “and that’s because we’ve got a headstart as consumers already know how it works plus we’re adding extra brands.
“In 2005, 400,000 consumers registered for Kit Kash and we sold 80 million packs of Kit Kat over 20 weeks. That was excellent but what made it more so was the massive national media coverage. It really was the sort of coverage you cannot buy – stories of people buying Kit Kat by the pallet load to take part in the promotion then donating all the chocolate to hospitals – it was amazing.”
As well as running the promotion across the whole Kit Kat range, the 2006 Kit Kash promotion runs across Aero, Yorkie, Rolo, Lion, Toffee Crisp and Rowntree’s Fruit Pastilles.
Kit Kash gives consumers the chance to win, bid for, or buy rewards using Kit Kash points collected from packs. In addition, this year Kit Kash will give consumers the chance to win a prize every day by entering their promotional code online. A TV ad for the promotion is currently being screened.
Masterfoods is a strong player in the confectionery market with seven out of the top 10 best selling confectionery singles (see panel opposite), according to trade relations manager Andrea Taylor. “The top 10 chocolate bars generate over a third of chocolate sales, so it is vital that the best selling lines are stocked and given the space they deserve.”
The only recently-launched line in the top 10 is Mars Delight and Taylor says this shows that new products that are linked to best-sellers can also make an impressive impact on the market, providing they are backed by big advertising and marketing support. Last year Masterfoods backed its confectionery brands with an pound;80m spend, and it promises its investment in 2006 will top that.
Masterfoods takes the cash and carry/wholesale trade very seriously, it says, investing significant resources to cover all major depots across the UK at head office, regional and local levels. The company also works closely with Harris International Marketing to get a better understanding of retailers’ expectations of cash and carries.
Taylor explains: “Cash and carries play an essential role in providing the right products to the independent and convenience trade. We are actively working with them to share the lessons learned from the research and interpret how they relate to the confectionery category. The findings enable cash and carries to optimise layout and product range to better meet retail customers’ needs and maximise sales.”
She cites availability as an example: “Responses from retail customers to the latest HIM research revealed that cash and carries are still missing out on the opportunity to provide retail shoppers with the products and service they are looking for.” Some of their findings were:
l 34% of cash and carry shoppers reported that they failed to purchase something they intended to buy on arrival
l 81% of failed purchases are due to the product on the retailers’ shopping lists being out of stock
l confectionery is the hardest hit category in terms of poor availability, with 28% of failed purchases, next comes soft drinks with 17% of failed purchases
l lack of availability results in a loss of 8% of consumer sales, which translates to a loss of pound;160m in consumer sales value in the impulse market.
In light of these findings, Taylor offers cash and carries three tips: give fast moving lines greater space in the display; increase the amount of stock stored on shelf; and locate all confectionery lines together as this is how retailers shop.
She continues: “While a number of cash and carries stock up to 2,000 confectionery lines, a typical retailer only sells between 250 and 300 confectionery lines. This means that many lines add little or no contribution to cash and carries’ sales, yet take up valuable space in the depot. That’s why Masterfoods has a dedicated team working with cash and carries to help optimise layout and product range so they can better meet key retail customers’ needs. By working together we can maximise confectionery sales through cash and carries as well as delivering better availability of confectionery lines to retailers.”
Masterfoods major push in cash and carry depots at the moment is of its slim jim strongly-branded free-standing bitesize units, which are currently on display in most depots in the UK.
Bendicks is looking to build on the success of its Mingles brand by making it available in a 100g bag. Trade marketing manager George McLearie says it is the first premium mint chocolate available on the hanging bag fixture and it will now be accessible to a new group of consumers.
One category within sugar confectionery that should never be overlooked is chewing gum. That’s because, for retailers, it delivers significant profits from a small amount of space. Sales of chewing gum reached pound;270m in 2005, with Extra the biggest seller with sales worth pound;154m. The Extra brand has a strong presence in the mouth freshening category too, with its mints and fresh breath strips. The mouth freshening business is now worth pound;369m (MAT Dec 2005), and Wrigley’s Extra has a 45% share of that business.
However, there’s more to Wrigley than Extra, and the company has a strong track record of new product development. Airwaves Active is its latest addition. Containing guarana, it combines citrus flavours with a menthol hit.
Wrigley is not the only manufacturer with new launches for the new year. Burton’s Foods, best known for its biscuits, has three new confectionery products that benefit from natural flavours, natural colouring and are virtually fat-free. Fruitease is aimed mainly at adults and contains 25% fruit juice. There are two variants: citrus, a combination of orange, lemon and lime; and orchard, which is apple, pear and cherry. The sweets come in 175g hanging bags, with a rrp of 99p.
Meanwhile new Bursting Bottles are fizzy, sour bottle-shaped gums in three flavours: cola, lemonade and cherryade. The bottles are packed in 75g bags with a rrp of 39p and in a counter display unit of 24x40g bags, rrp 29p. Little Squirts contain 25% fruit juice and are described on-pack as “squidgy little gems bursting with scrummy fruit juice”. Again there are three flavours: pear, apple and cherry. The 75g hanging bags have an rrp of 39p.
This is a busy time of the year for Swizzels Matlows with its flagship Love Hearts brand. Independent research has found that sales of the sweets increase by more than 500% in the build up to Valentine’s Day. New for Valentine’s 2006 is the Heart Beat Clicker Licker Pop, which comes in two flavours: strawberry and pink lemonade. Rrp is 79p and it is packed in 12s.
Meanwhile, Haribo is adding a new set of characters to its Pez sweet dispensers range. Chicken Little and his friends from the new Disney film join the line-up. Haribo managing director Per Hen eacute;rius says: “The Chicken Little movie features a lead character who has strong appeal to both sexes. There is already high awareness of the character in the UK – and the film will build on that and help stimulate trial of the new Pez line in the months ahead.
“We regularly update the Pez line-up with high-profile characters so that children can keep adding to their collections. We always aim to introduce characters from high-profile films or TV shows that children know well and can relate to in their lives.”
In addition, Haribo has announced a spring burst of TV advertising for Maoam. The return of the successful “Go Mad for Maoam” campaign aims to consolidate the success of the brand, which has achieved a retail value of pound;9m within five years of launch. The latest advertising is the first of three bursts of TV support for Maoam during 2006.
=== Top 10 Best Selling Confectionery Singles ===
1. Mars 5. Twirl
2. Snickers 6. Mars Delight
3. Cadbury Dairy Milk 7. Mars Big One
4. Maltesers 8. Twix
9. Kinder Bueno 10. Bounty Milk
Source: ACNielsen. Total coverage, MAT CSV 14.05.05 (excluding gum)
=== Buyer’s viewpoint ===
Worries over obesity, sugar, salt and fat contents are making consumers cautious but these concerns seem to have affected soft drinks sales more than confectionery.
Generally speaking we’ve found that sales of chocolate are holding up and we are doing particularly well with premium chocolate like Lindt and dark chocolate with its high cocoa content. It seems that even when consumers have reduced their chocolate intake, when they do eat it, they want the best.
The biggest winners for us in 2005 were Nestle’s Wonka range and Aero Bubbles. They were extremely successful and at times they couldn’t keep up with demand.
=== Buyer’s viewpoint ===
The 2006 World Cup is going to create a host of opportunities for independent retailers, in confectionery and beyond. We will have a great range of confectionery and some non-food items to mark this event. A number of confectionery manufacturers will be getting behind the World Cup. For example, Nestl eacute; will be revisiting the 1966 World Cup and will have a host of promotions to talk about. Plus with Fathers Day falling on June 18 and the World Cup running from June 9, we will be stocking a number of football-related Fathers Day gifts. We will certainly be looking to make the most of it, helping our customers to maximise their profits.
The independent retailer needs to be proactive, understand their local customers and seek to maximise return from every possible trend and event, of which there will be plenty. In this way they will stand apart from the competition and offer their customers something truly different and exciting, which will keep them coming back time and again.