Nights in sharing choccie in front of the latest TV box set have kept the chocolate market buoyant but so too has innovation.
According to Nielsen data, Mondeléz International is the clear winner in the chocolate market, accounting for 37.4% of value sales. And it has enjoyed an increase in its tablet sales, with growth of 16.8% thanks in part to the launch of innovative products such as Cadbury Dairy Milk (CDM) Marvellous Creations. Creations is in fact a Marvellous new take on chocolate, combining unusual taste sensations such as popping candy, jellies and sugar-coated chocolate candy pieces or biscuit pieces, crunchy nut caramel and chopped roasted nuts with smooth milk chocolate.
These lines have certainly tickled consumers’ tastebuds, so much so that the latest CDM line is even more quirky. New CDM Ritz combines Ritz savoury crackers with milk chocolate. At the launch, Matthew Williams, marketing director at Mondeléz, said the firm had listened to what its ’chocolate fans’ wanted something new and quirky and CDM Ritz is the result.
Sitting alongside CDM Ritz is CDM LU, which contains the LU sweet French biscuits. Each bar sandwiches four chunks of CDM between mini LU biscuits or Ritz crackers. Williams says there’s nothing else like these products in the category, and he’s probably right.
Obviously Mondeléz knows what it’s doing. Last year it "took inspiration from the strength of its cross-category portfolio" to deliver CDM with Oreo and with Daim.
CDM with Oreo has been a massive hit, generating over £19.3m-worth of sales, making it the number three tablet in 2013 (Nielsen data).
Susan Nash, trade communication manager at Mondeléz, says retailers should take advantage of the innovation in the marketplace to "excite customers in store, especially from the market leaders who invest in research, development, technology and marketing to shape the next generation of innovation".
Ferrero is another company that is doing well; it experienced excellent growth over the past year, outperforming the category and growing by 13.5% in impulse outlets (Nielsen). Star performers include Kinder Kids up 25.95% year-on-year and Kinder Bueno up 4.31%. Ferrero Rocher holds a position in the top five classic boxed brands, and is out-performing the boxed chocolate segment as a whole with 1.6% year-on-year growth, while Ferrero Collection is growing even faster at 20%. "Last year was a very successful one for Ferrero, as we have continued to invest heavily in our brands to drive value and growth into the category," explains Levi Boorer, customer development director.
"With new premium ’gold standard’ POS to showcase the special nature of the range and capture impulse sales opportunities, we outperformed the category over the crucial Christmas period, with 16.1% growth versus a category rate of 1.6%.
"We will continue to invest in category leading support on TV and in-store, alongside relevant NPD and clear merchandising advice, to deliver our ambitious growth plans and the convenience channel will be key to us achieving these goals."
Meanwhile, the company’s Kinder Bueno sits in the middle of two broad sections of the countlines category: pleasure and hunger fill. Boorer says this means it offers consumers the best of both worlds: "A unique taste and texture that is pleasurable, but with a light touch so you don’t feel full".
"Kinder Bueno has had an exceptional year, outperforming the countlines category with 9% growth," he adds. "This success demonstrates that although consumers are often intrigued by newly launched products, there is also huge value that can be unlocked from established brands, like Kinder Bueno if they are given the right support."
Classic Kinder Bueno is the number six countline in the UK. Boorer says it is selling well within the impulse channel and the unit rate of sale for Kinder Bueno’s variants doubles if the white and classic are stocked alongside one another, along with secondary siting.
Snacking categories in the evening combine to make a value of £6.1bn (Kantar Worldpanel data), with chocolate the biggest category by value, followed by biscuits, crisps and fruit. Mondeléz expects sharing bags and tablets to be every bit as important to the success of the chocolate category in 2014, as they have over the past 12 months.
But Boorer says purchases for special sharing and gifting on nights-in with friends or family create lucrative sales opportunities for retailers.
"These purchases have 89% higher value sales on average than everyday confectionery. As the leaders in ’special’ and the only brand of scale that caters for all ’special’ shopper missions, Ferrero is one of just two manufacturers driving double-digit growth in boxed confectionery, and as the number one classic boxed brand, offers consumers a premium treat at an affordable price.
"For these savvy shoppers, value is therefore not just about price, it’s about product quality, and they refuse to compromise on their favourites, with taste remaining a key category driver."
In blind taste tests, Boorer says Ferrero Rocher out-performed all competitors in terms of taste appeal, with 79% of consumers strongly enjoying the product. He adds that shoppers have therefore been trading up from lower value sectors of confectionery like twistwraps into more premium boxed chocolates like Ferrero Rocher and Ferrero Collection, which is driving value into the category.
"Ferrero’s research shows that treating yourself is a relatively emotionally involved purchase which results in a higher basket spend creating a real value driving opportunity for the category."
Limited editions are always popular; adding a bit of excitement to fixtures and encouraging consumers to buy because they won’t be sure how long a particular line is going to be available.
The latest limited line from Nestlé is Aero bubbly white milk chocolate filled with white vanilla flavoured bubbles.
The launch comes as a result of the Aero ’Fans Favourite Flavour’ campaign, which gave lovers of the brand the chance to vote for their favourite flavour via Facebook. The four flavours to choose from bubbly white, lemon, strawberry and cappuccino were shortlisted from a previous poll. The winning bubbly white secured 39% of all votes.
Nestlé UK & Ireland senior corporate communications manager, James Maxton, explains: "Aero has a huge 957,000 fans on Facebook and therefore the ’Fans Favourite Flavour’ campaign was an excellent opportunity to talk directly with them and let them tell us what they most wanted to see from the brand."
Aero is one of the UK’s top 10 chocolate brands, worth £67.5m, with the singles formats worth £20m (IRI).
Maltesers is top TV show Britain’s Got Talent’s exclusive confectionery ’partner’ for 2014.
A limited edition flash-marked pack of Maltesers will be available featuring an exclusive promotion giving consumers the chance to win a range of "money-can’t-buy prizes", including a Britain’s Got Talent house party for family and friends, as well as VIP tickets to the live TV shows.
The activity will be supported by point of sale units as well as a £1.95m media package.
Confectionery purchases are highly impulsive so visibility is key. Nearly 70% of customers do not see confectionery while in-store, but of those that do, 80% go on to purchase it, so the stronger the display, the stronger the sales.
To convert shoppers into confectionery consumers and maximise your sales, location of the main fixture is crucial.
The primary confectionery display should be positioned in a high traffic area of the store and feature all confectionery occasions.
To drive impulse sales further, retailers should also create secondary displays in high traffic areas of their store or on free counter space retailers can vary the number of displays dependent on the size of their store.
Within the primary fixture, retailers should give more space to top-selling lines and double face the very best selling SKUs where space allows, to ensure clear visibility.
It is also advisable to group pack formats and brands together, putting them into categories such as tablets, self-eat and bags. This will help consumers navigate the fixture more easily and logically.
If you’re trading in an area where your customers are particularly price conscious, it may be worth stocking own-label chocolate.
Jonathan Summerley, purchasing director at specialist confectionery cash and carry group Hancocks, explains: "The chocolate confectionery market has been dominated by a few big brands for some time and while this continues to be the case, the tougher economy has helped to open the door for own label chocolate and also lesser-known brands. Shoppers’ loyalty to brands across all grocery sectors has been tested to the extreme and while many will continue to choose their favourite brands, an increasing number will be open to selecting the best value option to meet their needs."
He reports strong sales for Hancocks’ chocolate bubble bar. Similar to Aero, it is available in milk, orange, white and mint varieties. The 160g blocks retail at just £1 a bar.
And following the success of Mondelez’s Marvellous Creations comes Hancocks Sweet Shop Chocs. These mix chocolate with popular pick and mix sweets including white chocolate with cola bottles; milk chocolate with strawberry hearts; milk chocolate with fried eggs; white chocolate with mini chocolate beans; milk chocolate with mini mallows; and chocolate with fizzy bubble bottles. These boxed bars weigh 100g and have a rrp of £1.49.
On the subject of price-marked packs (PMPs), Summerley believes they can be really useful to smaller retailers, but only when they work well.
"They can reassure shoppers of good value and provide good sales for retailers. However, manufacturers should not develop PMPs to the detriment of retailer margin. Nor should they have too many available at the same time. Retailers continue to need some flexibility with their pricing as local conditions such as shopper profile, location and competition are all important considerations."