Christmas is a time for giving – particularly chocolates. Toby Hill reveals the best gifts, as well as the products to stock for shoppers who want to treat themselves.
Wholesalers’ sales can rise by up to 40% in the run up to Christmas, according to research body IRI.
The confectionery category as a whole was worth £824m last year and chocolate played a key role in boosting sales. New products are launched every year, and with customers seeking novelty and fresh ideas to invigorate their Christmas celebrations, wholesalers need to stay on top of the category as the festive season approaches.
“Christmas 2016 was the biggest ever, as shoppers splashed out, despite rising inflation and reduced household spending growth,” says Andy Mutton, sales director at Storck. “Confectionery alone grew by 9.5% in December, so it is increasingly important for wholesalers to stock up well in advance to ensure their customers are prepared.”
Ferrero will be investing £8.2m this Christmas while launching new products across its brands, including advent calendars and boxed chocolate products. The Ferrero seasonal boxed offering, which includes Ferrero Rocher, Ferrero Collection, Raffaello and Thorntons, is worth £119m and enjoyed double-digit growth of 13.6% last Christmas.
Levi Boorer, customer development director at Ferrero, says: “Following a successful Christmas last year, it is important as a leading confectionery manufacturer to offer retailers products and ranges that help them to cater for the different types of festive shopping needs. Whether it’s to gift, to share or simply to treat and enjoy with loved ones, we know shoppers love our products, and that they are a staple at Christmas.”
Christmas brings with it a broad spectrum of shopper missions, as customers hurry through stores seeking last-minute gifts or stocking up on sharing items before family gatherings and parties with friends. And it’s not just a case of getting the right range: wholesalers need to consider when to phase products in and how to best create eye-catching displays that will signpost their customers to fresh retail ideas.
In this category guide, we talk to leading chocolate suppliers, asking what they are doing to ensure wholesalers are fully equipped for the festive season, and identifying the best strategies for maximising the potential for profit.
Getting gifting right
People are buying chocolate for every occasion in the run up to Christmas, but the season’s central mission remains choosing gifts for friends, relatives and work colleagues. With shoppers looking for something tailored to the tastes of each recipient, wholesalers need to make sure they offer a broad range of options.
“It’s important to be fully equipped ahead of the festive season to ensure you’re meeting the different needs of the Christmas customer,” says Andrew Ovens, marketing manager at Big Bear Confectionery. “We know that consumers amend their shopping habits at Christmas and are far more open to trading up, especially in the gifting category.”
He recommends the brand’s Just Brazils range of milk and dark chocolate-coated brazil nuts. He adds: “Think about using a box for samples. If retailers or customers can try the product, they are more likely to buy it – our research has shown that trial leads to purchase with Just Brazils.”
Another top gifting product is Merci, from Storck, which saw 15% growth last year: “The 250g box is the perfect token gift, while the 400g box is seen by consumers as a special gift,” says Mutton.
Premium chocolate supplier Divine also has products that make ideal gifts. Its Chocolate Tasting Set, which contains 12 small diversely-flavoured bars, was a particularly popular gift option among surveyed consumers, according to the firm’s marketing director Charlotte Green: “80% of consumers surveyed indicated they would choose the Tasting Set as a gift, 60% would enjoy it for themselves and 45% would purchase to share,” she reports.
This Christmas, the firm will launch a range of limited edition flavours, such as Milk Chocolate With Spiced Cookies and Dark Chocolate With Cranberries & Hazelnut – ideal small and simple gifts to meet the preferences of chocolate-loving colleagues and acquaintances.
Selecting for the sharing season
While choosing an individualised gift is a central part of Christmas, easily shared snacks and treats are also key to creating a festive atmosphere.
“Consumers need to be able to rely on their local retailers for those much-needed sharing bags and boxes of chocolate confectionery for guests during the festive season,” Ovens observes.
From Big Bear’s range, he recommends Poppets sharing bags and boxes to meet this need. He also suggests including them in a seasonal display to drive sales across the category: “Creating a dedicated display with premium boxed confectionery is a great way to catch the eye of those shopping for last-minute gifts.”
Asked what he’d include in a display of seasonal sharing chocolate, Storck’s Mutton recommends the Toffifee 400g box: “We are investing heavily in TV for Toffifee across the festive period, with 90% of the target audience seeing the campaign up to 15 times,” he says.
As an alternative, he highlights Storck’s Bendicks brand of premium after-dinner mints, sales of which grew by almost 12% last Christmas: “The 200g box is ideal for celebrating after Christmas dinner at home,” Mutton says.
Mondelez’s trade communications manager Susan Nash says her company has “a vast range of products perfectly suited to the sharing occasion”.
The Cadbury Fudge Minis tube sees Fudge join Cadbury Dairy Milk, Freddo Faces and Cadbury Dairy Milk Buttons in the tube format. The Cadbury Heroes Cracker, meanwhile, packs the familiar Heroes mini chocolates range into novelty cracker-shaped packaging. And 112g boxes of Cadbury Dairy Milk Snow Balls come in at £2.99, making an excellent wintry treat with which to decorate tabletops.
Nash recommends phasing in Christmas chocolate gradually, to help guide retailer customers in building a sense of anticipation. She suggests stepping up stock levels of sharing classics such as Miniature Heroes, Roses and Chocolate Orange, from this month. October sees Halloween products join the range alongside winter-themed chocolate bars. Then, in November and December, Nash recommends bringing in the whole range of Santa-, cracker- and fir-tree-shaped festive products.
Packing in premium pleasures
An important Christmas chocolate trend that cuts across both gifting and sharing occasions is premiumisation. Consumers are increasingly aware of the provenance of products across diverse categories, from coffee and beer to bread and meat, resulting in a greater willingness to pay more for a better product.
“Chocolate consumers are becoming increasingly discerning and seeking premium quality products that are suitable for a range of gifting or sharing occasions,” says Divine’s Green. “All of Divine’s products are made with Fairtrade-certified cocoa beans grown by Kuapa Kokoo, the co-operative of Ghanaian cocoa growers that owns 44% of the Divine company. Co-ownership ensures the farmers receive the biggest share of the distributed profits, as well as increased influence in the cocoa industry.”
These carefully sourced ingredients compose Divine’s range of premium chocolate products. The Divine Luxury Collection contains 16 truffles with flavours ranging from salted caramel to passionfruit. Divine 70% Dark Chocolate with Caramelised Almonds or Dark Chocolate with Black Cherries incorporates Fairtrade almonds and cherries from the Himalayas.
Others have made similar observations. “There is a trend of premiumisation, and consumers are willing to pay more for chocolate over the festive period to meet their desires,” says Bean & Pod’s Jimmy Attias. “At Christmas, shoppers specifically look for originality – for products that stand out and surprise.”
Bean & Pod’s latest line to meet these needs is Dark Chocolate Peanut Butter Bites, which launched at the Speciality & Fine Food Fair this month. Dairy-free and certified by the Vegetarian Society, it folds peanut butter and puffed rice into a dark chocolate casing.
Also at the heart of building a countdown to Christmas is the advent calendar: for young children, nothing makes chocolate taste as good as hiding it behind a colourful cardboard window. But wholesalers need to provide a broad range to ensure retailers can meet the whole spectrum of their customers’ preferences – including adults wanting calendars.
The premium segment is growing at 41%, according to analyst Nielsen, so there has been increased choice in chocolate and non-chocolate calendars for both adults and children.
Ferrero brand Kinder has introduced The Kinder Mix Advent Calendar, containing Kinder Chocolate Minis and Kinder Chocolate with Cereals Minis. Ferrero’s Boorer says: “The calendar will continue to premiumise the advent offering during Christmas for retailers.”
In addition, Kinder is launching a social media campaign inviting children to broaden their imagination and share their Christmas wishes and moments. One lucky family will win the chance to have their Christmas wishes come true, delivered to their door by Kinder.
This year, Divine has designed two new advent calendars that together cover a broad spectrum of possible tastes. The Fairtrade Milk Chocolate Advent Calendar was specially illustrated by Stephen Waterhouse to appeal to children, weaving together images from the traditional Nativity scene with the production process of Divine’s cocoa, harvested by the firm’s Kuapa Kokoo farmers in Ghana. Adding to the exotic feel, each window contains a ‘Merry Christmas’ message in a different language from countries around the world where Divine sources its products, set against the country’s flag.
Divine is also launching a Fairtrade 70% Dark Advent Calendar, perfect for satisfying adults with more refined tastebuds during the festive season.
Such striking advent calendars are ideal for creating an eye-catching display in-depot, signposting retailers towards ideas for creating a festive atmosphere in their stores.
“Previously, Christmas confectionery was being completely destroyed by the prices the supermarkets were setting. That’s changed somewhat, because the prices available at Booker are pretty good; it helps that they provide point-of-sale material and posters, too. We also offer gift-wrapping for free on some confectionery lines, which costs about 20p a pop.”
Penrhyn Bay, Conwy
“I’m a bit ambivalent about Christmas confectionery: you can get stuck with unsellable seasonal stock and the margins aren’t good enough to carry lots of waste. It’s a balancing act to get the right amount of stock. I look for quirky product lines that the supermarkets won’t be pushing so hard, and I find leafleting can help, especially in an area like mine with lots of elderly people.”
Coltishall, Norwich, Norfolk
“We stock Roses and Celebrations at £5 a tub, and that price isn’t going to change. You have to have the branded option because some people won’t buy anything else, but you have to accept you’re going to get swamped on price. But this year, we’re pushing harder on premium lines sourced from specialist suppliers, such as Cotswold Fayre and Sarunds, which gives us a vital point of difference.”
“I’m a really small store, under 500sq ft, and so although I’d like to take a wider range of stock, I just don’t have the space. This means I have to work with mainstream lines. Fortunately, because of the deals that Booker run, I’m able to match, if not beat the supermarkets on some of their prices for selection boxes and so on.”
The Corner Shop