Louise Banham reveals the trends driving wholesalers and retailers’ sales in the run up to Christmas.
With an annual worth of £5.4bn and a 2% year-on-year growth, total sales of confectionery are pretty sweet, but there are more sales to be had.
With shoppers now visiting a convenience store four times a week this represents a significant opportunity for wholesalers to support retailers in driving trial within the confectionery category.
Five top tips
- Avoid out of stocks: As in retail and foodservice, the message remains the same for wholesale. If a retailer’s best-selling brand is unavailable, you could lose customers for good.
- Take time to talk: Discuss advice on merchandising, market trends, new developments and bestsellers in the local area with supplier field sales reps and your own sales reps.
- Stay up-to-date with developments: Ensure your range reflects these. Use the right price promotions and PoS to support new products in-depot and capitalise on early demand.
- Make your depot is pleasant: Make sure your confectionery area is neat and tidy – by making it easier to navigate with clear signage, you will enhance customers’ shopping experience.
- Strive to deliver knowledge: Act as a support network and customers will build expertise through suppliers and offer a high level of service to help maintain customer loyalty.
Several trends are currently driving the category, including fruit-flavoured and sour confectionery, nostalgic brands, and, like many FMCG sectors, value and price-marking, but here we focus on just two key areas that will boost sales in the second half of this year.
Despite the soaring heat of summer, the countdown to Christmas has already begun and with it a raft of new and refreshed products that aim to drive incremental sales.
Mondelez International stepped up first with dozens of launches and new look lines. “Christmas is about families – and seasonal confectionery has an important role to play in making the celebrations more special,” says Susan Nash, trade communications manager at Mondelez. “Consumers buy five chocolate products each during the season, with 86% of Christmas chocolate bought as a gift or to share. Forty-four per cent of Christmas chocolate was purchased for Christmas Day – meaning there is a huge opportunity to maximise sales outside the big day as well.”
Suppliers recommend wholesalers offer their customers a core range of different products from leading brands to meet different consumers’ needs in the lead up to Christmas from as early as September.
“Wholesalers play a vital role in informing and advising retailers on seasonal products within the confectionery category,” says Andy Mutton, sales director at Storck. “They should ensure they are communicating to retailers the importance of dedicating space to well-known brands for entertaining and gifting.” He adds that retailers should be encouraged to create in-store theatre around events, such as Christmas and New Year.
While for the convenience channel, single impulse lines should be the first and main focus, Nash points out that sharing is also important. “In chocolate, sharing is worth £208m and has a 89% share of Christmas chocolate occasions,” she says. “Christmas is all about spending time together with family and friends, so it’s important to offer variety so there is something for everyone, alongside nostalgic brands and well-loved favourites.”
Fast chocolate facts
74% – the value of chocolate confectionery, worth £4bn
£5.4bn – value of UK confectionery market
26% – the value of sugar confectionary, worth £1.4bn
99% – of households in the UK buy into the confectionery category
£770m – value of boxed chocolate
Although countlines are the big sellers for the majority of convenience stores and foodservice outlets, sharing is an important area of the confectionery market.
“Wholesalers can help their customers capitalise on sales through ‘the big night in’ opportunity as cash-strapped shoppers continue to spend less time and money on evenings out and instead stay at home for a big night in,” says Matt Austin, European confections director at Wrigley.
Sharing bags, chocolate blocks and multipacks have been the key driver of the growth in the confectionery market, up 52% between 2009 and 2013.
“Over this time shoppers have been buying more packs (up 20% to an average 81 packs per year) and spending more on them (up 28% to an average £85),” says James Maxton, Nestlé UK & Ireland senior corporate communication corporate communication manager. “Sharing occasions provide a great opportunity for convenience retailers to trade up shoppers and generate incremental sales.
“Wholesalers can use displays to help make it easy for retailers to think about creating a one-stop solution, locating products from relevant categories together, such as confectionery sharing bags, soft drinks and crisps and dips, and highlight with eye-catching signage.” l