Olivia Gagan discovers that old favourites, as well as new products, are providing some comfort in the chocolates category
Getting your chocolate offer right can provide you with big gains: the category is a mainstay, given the UK’s cross-generational love of sweet treats, but it also comes with a lot to consider. The confectionery market as a whole is in flux and so it can be difficult to know what to stock.
Sugar is in the firing line, with the government demanding cuts in sugar content and chocolate manufacturers reacting accordingly. At the same time, new products are streaming into the market, with nostalgia and quirky mix-ups playing a big part in the innovation, as well as reduced pack sizes.
Levi Boorer, customer development director at Ferrero, says wider trends in consumer behaviour are trickling down into the sector, and growth in other segments, such as health-oriented and all-natural treat products, are making customers think twice before picking up their usual chocolate choices.
“Changing consumption habits and greater competition from other categories are affecting the confectionery market. Consumers are continuing to opt for occasional treats and quality over quantity,” he says.
The trend for choosing chocolate products marketed as high-quality is a growing one, with consumer-spending on premium chocolate on the rise – up 2% last year, according to analyst IRI.
It seems British palates are evolving towards products with greater cocoa content, too. While milk chocolate is a longstanding shopper favourite, richer dark chocolate has seen consistent growth for the past three years and is now worth £211m, accounting for 6% of total chocolate sales and 70% of the premium market, Nielsen says.
Boorer says premium chocolate is a win-win for wholesalers, as it offers retailers the chance to make year-round sales and also represents an additional opportunity at celebration periods such as Easter and Christmas.
“Confectionery is one of the few categories where consumers are willing to trade up to more premium treats, especially at key seasonal trading spikes,” he says. “We saw that during Christmas – the biggest growth came from ‘make a statement gifting’ and ‘make a statement sharing’. Shoppers were trading up.”
This suggests premium confectionery products that provide solutions for the ‘give to gift’ and ‘give to share’ moments could prove to be winners for your chocolate bars & sharing category.
Traditional formats are scaling up and down, with a notable increase in the availability of share-size tablets and individually-wrapped mini versions of traditional favourites in share bags. This trend for switching up sizes is thought to be driven by young families and consumers in general opting for more stay-at-home entertaining.
Meanwhile, more health-conscious consumers like being able to control portions using individually-wrapped bitesize treats and resealable packets.
“Chocolate bags is the fastest-growing standard chocolate segment,” says Susan Nash, trade communications manager at Mondelez International. “We have brought more of our ‘hero’ brands to the bitesize category, with the launch of Cadbury Fudge Minis, Cadbury Curly Wurly Squirlies and Cadbury Picnic Bites. All three brands are consumer favourites, to recruit pre-family and younger families to drive penetration for the category.”
The nutritional content of chocolate products is another thing for you to consider. As part of a plan to curb childhood obesity, Public Health England wants manufacturers to cut the sugar content in their cakes, chocolates, cereals and biscuits by 20% by 2020. Brands are already responding, by changing the recipes and, in some cases, the size and weight of much-loved products.
Marketing manager at Big Bear Confectionery, Andrew Ovens, says the changes have not hit sales as badly as some manufacturers had feared. “It is clear that sugar is still a talking point but, from a confectionery standpoint, we are not seeing a huge negative impact. Consumers see confectionery as an occasional treat to be enjoyed in moderation.”
However, it is worth making sure you are aware of changes to products, whether this means recipe reformulations or resizing of products, to help keep retailers in the loop and avoid surprises.
Boorer says Ferrero is responding to the drive for lower-sugar products by stressing portion control and flagging up the calorie content of single servings. “We are continuing to focus on products that can be enjoyed occasionally as part of a balanced diet. We are aware that as a large food manufacturer, the way in which our products are consumed is incredibly important. We encourage people to consume our products in small quantities and [it is] why 95% of our products are less than 150 calories per serving,” he says.
Remixing old favourites
There is a seemingly unending stream of new products entering the market. Often an impulse purchase, confectionery seems to be a category where customers are willing to experiment.
Boorer says: “Innovation is a real growth driver for the confectionery market, with shoppers constantly on the lookout for something new to try.”
Manufacturers are responding by trying to offer customers the best of both worlds. Old favourites are being mixed with other popular chocolate brands, to make the most of established customer loyalties while offering something new.
Nash says Mondelez is finding success by adding new ingredients, such as popping candy, to its traditional Dairy Milk bars and creating collaborations with brands such as Oreo. It has launched Cadbury Oreo Bites – bags of small Cadbury bitesized pieces with an Oreo filling. It has also launched a new tablet, Cadbury Dairy Milk Oreo Sandwich, which offers a layer of Cadbury Dairy Milk chocolate sandwich between mini Oreo biscuits.
‘Mix-up’ boxes and bags of confectionery are also entering the market, influenced by sweet offerings available at cinemas, where pick and mix can be chosen according to the customer’s demands and popcorn can be mixed into sweet and salt varieties.
In response to growing demand for ‘mix up’ options, Big Bear has launched sharing bags called Poppets Movie Mix, a selection of four different Poppets flavours: Orange Fondant, Dairy Fudge, Chocolate Shortcake and Raisin.
Make the most of it
To help drive sales, Big Bear’s Ovens advises you to highlight the benefits of sharing bags for your retail customers: “The flexible nature of the packs benefit retailers by making more efficient use of shelf space, as well as offering greater on-shelf appeal,” he says.
Pricemarking, as ever, remains an important feature for independent retailers, and therefore still needs to form a key part of your range. Mondelez has decided to cut the cost of its pricemarked 18g Freddos bars, 23.5g Chomp bars, 25.5g Fudge bars and 14.4g Buttons packets from 30p to 25p.
Ferrero’s Boorer, meanwhile, adds: “Ensure you keep your shelves full of product and well-organised so that customers can easily find what they are looking for. In-depot displays are crucial, to grow sales and drive customer engagement.
“By creating innovative and impactful displays, key launches stand out in-depot and inspire customers around the seasonal opportunity.”
He adds: “Stock the bestsellers as they will provide a greater rate of sale. Be aware of which brands are being heavily supported by marketing, as this will drive consumer awareness – which you can translate to sales.”
“Traditionally, we were a specialised confectionery store, so lots of consumers still come to us for premium chocolate. Last month, for example, Thorntons Easter eggs did really well. We have always tried to offer a premium and varied range, but sometimes it is difficult to get something ‘new’ in store, unless it is in season.”
Joanna Casonato, Giacopiazzi, Kinross, Perth
“We have a lot of schoolchildren visit us. The £1 pricemarked bags of chocolates like Maltesers are really popular with them, perhaps because they see them as offering best value.
“Wholesalers should take a category approach to chocolate, rather than heavily promoting individual brands or lines.”
Scott Graham, McLeish, Inverurie, Aberdeenshire
“Our biggest sellers are £1 pricemarked larger bars and bags of sweets and chocolate. The market for smaller bars seems to have dropped out. It is always really helpful when wholesalers flag up any deals they have when talking with us, such as ‘two for a £1’, as these always work really well.”
Anita Nye, Premier Eldred Drive, Orpington, London
“The magic number is £1 for us – bars of chocolate and bags of sweets pricemarked at £1 sell more than any other confectionery products.
“We always appreciate it when wholesalers provide a wide range of pricemarked goods, as this really helps drive sales.”
Wilson Rea, KeyStore More, Lanark, Lanarkshire