When it comes to chocolate, we’re all getting a little bit posher in our tastes. Forget your cheap and cheerful offerings, customers increasingly want better quality chocs in fancier packaging. And so it is that the premium sector is one of the main trends driving today’s chocolate market for retailers.
Kraft Foods, which makes Carte d’Or, is one company which has seen a sharp rise in demand in this area.
According to Kraft convenience sales customer director, Dave McNulty, premium-branded tablets in particular are up in value - by 19% on last year.
"We expect the growth of the premium confectionery sector to continue over the next five years," he says. "This will be driven by three main consumer trends: increased time poverty, sophisticated taste preferences and the need to indulge."
And offering luxury chocolate is often a way for independents to differentiate themselves from their rivals. Jonathan Rons, client director at Harris International Marketing (HIM), says retailers shouldn’t be afraid of stocking posh chocs.
== point of difference ==
"Independent forecourt operators really need to have a point of difference - they should not just be trying to compete with Tesco and Asda. And that difference is in premiumisation. When we asked independent retailers about Easter, they said the premium chocolate products were the ones which sold out first. The opportunity for maximising profits is therefore to go down this route, and not to try to compete on tins or offers like ’Three boxes of chocolates for £5’ - that’s the supermarkets’ territory.
"Unless retailers get a different format or pack size to what the supermarkets get, there’s really no point.Why compete with the supermarkets? You’re just trying to sell something that they can sell cheaper any way."
== prime time ==
Confectionery is the fourth largest sales category in forecourt stores - behind tobacco, non-food and soft drinks. Figures from IGD show it accounted for 8.8% of sales in 2006 - more than newspapers and magazines, sandwiches and chilled foods. But
the festive season is when it really comes into its own, according to Graham Walker, Nestlé UK trade communications manager: "Christmas is the prime time for shoppers buying chocolate," he says. "Confectionery accounts for double the share of basket spend at Christmas than it does all year round. And it’s more than twice the size of other impulse categories at this time of year, representing a fantastic opportunity for retailers.
"With the festive season starting earlier every year, as well as the increasing number of occasions for at- home sharing, either for a ’big night in’ or in-home socialising, we urge retailers to consider their range and stock in order to maximise sales."
Quality Street is a huge festive seller for Nestlé. According to AC Nielsen, it is the number one family-share confectionery brand. It has a 40% share of this section of the market and is still growing - sales were up 2% for the year to Christmas 2006.
The twistwrap selection has been given a facelift for Christmas 2007, including the addition of two new sweets: the toffee deluxe and milk choc block. Meanwhile, the strawberry delight and orange cremes have new recipes, and the iconic sweet wrappers have been enhanced to make it easier for consumers to find their favourite.The brand will be back on TV this Christmas as part of a £4.5m media campaign.
Nestlé is also revamping After Eight, which is the biggest brand for table-led share confectionery, with 56% of the market according to figures from AC Nielsen. Tapping into the consumer trend for dark chocolate, Nestlé has launched After Eight 85% Dark, rrp £2.79. It has also given Black Magic a more modern look. The new Black Magic Dark Collection, rrp £4.99, includes more contemporary flavours and sophisticated packaging - and has been specially designed to drive sales this Christmas.
It is joined by two new products: the Dark Discovery gift box containing six chocolates with a rrp of £1.49 and Simply Black Magic Thins, 18 dark chocolate slices at £2.49.
Dark chocolate seems to be finally coming into its own - according to AC Nielsen, sales of plain chocolate have jumped 45% since 2003.
== Dark days ==
HIM’s Rons says: "Dark chocolate is definitely another trend. Look at Cadbury’s purchase of Green & Black’s - dark chocolate is, dare I say it, trendy again. In the past few years it’s been seen as an older product that wouldn’t suit forecourts. But now it’s seen as better quality and with a higher real cocoa content."
Dave McNulty at Kraft Foods says forecourt operators shouldn’t ignore this business opportunity.
"When looking at chocolate tablets, milk chocolate remains the number one-selling variant, however, statistics show that dark chocolate is the fastest-growing year-on-year."
But he adds that while it may be fast growing, it remains a relatively small sector. "Therefore, retailers need to stock a specific range of dark chocolate products to suit both mainstream and premium consumers; and sticking to top-selling lines is a good way to encourage sales."
On the back of this, Kraft Foods has just introduced a new case size of 10 for Cote d’Or, aimed at making it more suitable for the convenience sector. The brand will also be supported by a TV ad campaign later in the year.
Dark chocolate features quite heavily in what Nestlé has identified as the ’core’ products within its 2007 range for forecourt outlets. The company recommends the basic selection for independent retailers should include the After Eight 300g pack (rrp £2.79) and 265g Black Magic box (rrp £4.99). Another Christmas essential is the Quality Street carton (rrp £2.59), while in the extended range the Quality Street Big Boys individual snacks (39p) are recommended as being especially good for boosting impulse buy sales. Also included are the Heaven Pearls Praline (rrp £2.49) and the Smarties and Fruit Pastilles giant tubes (£1.39).
Meanwhile Mars will be putting £2.5m marketing support this Christmas behind its ’power’ brands Maltesers and Celebrations - which is 10 years old this year. The priority will be the Celebrations tin and cartons in various sizes. Mars says the Maltesers box remains the number one-selling treat brand all year round with Christmas accounting for 44% of annual sales. Andrea Taylor, trade relations manager for Mars, says despite the 11.8% year-on-year decline in the impulse sector overall - boxed declined 14.8%, traditional 3.6% - Mars’ traditional offering showed a 30% growth. "With the introduction of Galaxy Mistletoe Kisses (see box) and new variants in tubes, Mars will offer real opportunities for the retailer in the lucrative Christmas period," she says.
== novelty value ==
HIM’s Convenience Tracking Programme spring 2007 report, revealed that 19% of shoppers intend to buy confectionery when entering a forecourt but 23% actually buy it, showing that chocolate is still an impulse buy. This means there is a big opportunity for sales of novelties - the category grew by 4.2% in 2006 and according to Cadbury offers a significant sales opportunity.
The company’s research has also found that people want to buy into Christmas-specific confectionery, and with that in mind it is launching the Cadbury Magical Elves. These novelty packs contain eight characters made from milk chocolate and popping candy, with a rrp of 20p. The Elves will get their own website and will feature on advent calendars.
Meanwhile, CTB’s selection boxes are getting an eye-catching twist. The manufacturer currently has 67% market share in selection boxes, figures from AC Nielsen show. To inject some excitement into this year’s range CTB is putting ’lenticular’, or 3D moving images, on its large selection boxes - so Santa and his Elves will appear to move on the box as shoppers walk up to them.
This is designed to bring the Christmas spirit to life in-store - something CTB says is high on customers’ wish lists. Kate Harding, CTB’s acting head of customer relations, says: "The refresh of the Cadbury selection box design will improve impact on-shelf and make it easier for shoppers to navigate the seasonal fixture."
Other Christmas novelty launches in the branded gifts market include the Galaxy Irrestible pack, containing a mixture of five Galaxy favourites in a gold organza bag; and the innovative and fun Maltesers Ball.
== adult collection ==
CTB is also bringing out a new selection box. The Winter Collection includes some of its best-selling bars, including Cadbury Dairy Milk, Fruit & Nut, Bournville, Flake, Flake Praline, Twirl, Bubbly and Caramel. It has a rrp of £3.79 and is targeted at adult females. Harding adds: "The magic of Christmas is the key focus for our 2007 Christmas range. The portfolio offers important core Christmas range solutions for all retailers and delivers what shoppers want during the busy festive period with the injection of some innovation."
Also in gifting and sharing, Guylian is giving its truffle range La Trufflina a new look. New for 2007, the 180g packs are wrapped in luxury gold paper and tied with branded brown ribbon, with a rrp of £4.99.
La Trufflina will also be available in Guylian’s usual branded packaging in 180g and 360g at £3.99 and £7.49.
Other premium-end stocking fillers include Guylian’s selection packs. The Belgian Classics, rrp £9.99 for 570g, is an assortment of Seashells, Trufflina and Opus, rrp £9.99 for 570g, and Les Exclusives, packaged in a festive box, rrp £4.99 for 285g.
These will run alongside its established core products like Praline Seashells, rrp £3.99 for 250g and £7.49 for 500g, and Guylian Twists, rrp £2.89 for 200g and £3.99 for 285g.
Chocolate bars shouldn’t be ignored either at this time of year, according to research by Mintel, which has found that moulded bars account for more than a quarter of the market and are the only sector in growth.
Bars have increased by 12% since 2003, with the small premium sector showing the fastest growth as consumers opt for high cocoa solid chocolate, organic and fair-trade products.
== men only ==
And one last tip - don’t underestimate the guilt factor when it comes to chocolate shopping, especially where men are concerned.
"Forecourts are perfectly placed for the Christmas chocolate confectionery market," says HIM’s Rons. "If you think about their customer base, the convenience sector attracts more men than the supermarkets. And their shopping tends to be left until the last minute - so they’ll buy whatever’s there. Male customers in this situation aren’t going to bother comparing prices - price isn’t a factor. So retailers can sell products with a much higher profit margin.
"And men will usually be feeling guilty because they’ve probably left the present buying to the last minute! It’s a real opportunity to sell premium products.
"Get them in a prominent position and make sure customers are aware of them."
=== christmas crackers ===
? Mars is launching its first Christmas self-eat product. Galaxy Mistletoe Kisses are three chocolate pieces with a mousse and caramel centre (rrp 55p). The launch will be backed by a £1m TV advertising campaign throughout November. It is also adding two new tube varieties, Mars Planets and M&M’s Peanut (both rrp £1.39)
? Green & Black’s is bringing out a new gift range that it hopes will help increase its forecourt presence. The Miniature Bar Collection comprises 12x15g bars of chocolate, with flavours including cherry, butterscotch and ginger, rrp £5.99.
? Spice up Christmas with new Bendicks Bittergingers - dark chocolates with a ginger fondant centre, available in 200g boxes, rrp £2.99.
? Werther’s Original is introducing a 350g kilner jar with a rrp of £5.49 for both its Butter Candy and Chewy Toffee sweets.
? Tangerine Confectionery is launching Anthon Berg Cocktails chocolate liqueurs for Christmas 2007, available in gift packs of 16 with a case count of 12 or packs of 15 with a case count of eight. ? Cadbury will have two special offers exclusively for independents in the run up to Christmas: Roses cartons will have 33% extra free and Heroes cartons, 25%. The company is also relaunching its hollow chocolate snowman for 2007. Last year the individually-wrapped product was filled with chocolate snowballs. This year it will be empty and with a lower rrp of £1.99 (down from last year’s £4.99) to make it a more affordable stocking filler.
=== Top tips ===
? Start planning your Christmas fixtures early to avoid last-minute out-of-stocks - each year consumers leave festive shopping increasingly to the last minute.
Gabrielle Bond, trade marketing manager at Bendicks, says: "Seasonal chocolate is important in driving footfall to the fixture and ideally retailers should place at least two sites in store - one for planned purchases within the usual boxed chocolate fixture, plus strategically placed impulse fixtures at the end of aisles and close to checkouts."
? Make sure advent calendars are among the first Christmas stock to be put on display.
? Make the most of every minute you are open.
Andrea Taylor, trade relations manager at Mars, says: "This year Christmas Day falls on a Tuesday, meaning consumers will have the benefit of a long weekend for that last-minute shopping."
? Stock a good range of products and understand who your customers are - are they mainly transient customers or is the site a neighbourhood store?
? Keep plenty of smaller impulse gifts on display - confectionery is the second most popular Christmas present for under £10.