Nine out of 10 people eat chocolate, with 57% of them doing so more than once a week.
So says Mintel in its latest chocolate category report. Bars and blocks are the most popular formats thanks to their availability and price. And confectionery singles or countlines are the most important format for the independent convenience channel, where they are worth £598m and account for 48% of all confectionery sales (IRI). Added to this is the fact that confectionery singles are the items that are bought most on impulse twice as often as crisps/snacks or soft drinks (Him data). Then there’s the fact that shoppers of confectionery singles are valuable to independents, spending £6.94 on average per trip versus £6.13 for the average shopper (with that 81p probably being the price of their favourite choccie bar).
Price-marked packs (PMPs) in single confectionery are becoming increasingly important. Their value sales contribution to total singles confectionery (in symbols and independents) is up from 12% to 14%, growing 6% year-on-year versus non-PMPs declining by 10%.
Nestlé Confectionery launched its PMP range in 2016; the ’2 for £1’ price-mark features across 10 of its best-selling packs and is aimed at driving sales and profits for convenience retailers.
A Nestlé spokesperson says: "PMPs are a proven way for retailers to drive sales and a study by Him found that a multibuy promotion is favoured by both shoppers and retailers. When asked what would encourage them to purchase a product, 70% of singles confectionery shoppers indicated a ’2 for £1’ multibuy compared to 50% who said a discounted price. In addition, when retailers were asked what they thought their shoppers would find most appealing (when printed on the front of the wrapper) 41% said a multibuy (ie 2 for £X) compared to 28% who said a discounted price.
"A multibuy promotion provides an excellent opportunity for convenience retailers to boost sales and profits. In comparison to packs price-marked at a discounted price of 50p, a ’2 for £1’ multibuy is almost certain to make more cash margin for retailers. This is because it still provides retailers with the flexibility to set their prices for single packs. Therefore, retailers can benefit from both the uplift in sales a ’2 for £1’ promotion will generate, as well the higher margins from sales of single bars." Nestlé is currently rolling out new smaller 24-count outers across a range of its best-selling singles including all the ’2 for £1’ PMPs, which require a lower cost outlay and therefore help retailers with their cash flow.
The core lines moving to the new outers include KitKat four-finger, KitKat Chunky, Aero Peppermint medium, Aero Milk medium, Toffee Crisp, Yorkie Original and Yorkie Raisin & Biscuit, while Rowntree’s Fruit Pastilles and Polo Original, Sugar Free and Spearmint will all move to a 32-count outer. Smarties will also be moving to the 24-count outer, with the date yet to be confirmed.
Nestlé says it is the first major confectionery manufacturer to introduce smaller outers across its core singles. Both PMPs and standard non-PMPs will be available in the 24-count outers.
five out of 10
But it’s Mondelez International which currently claims five out of 10 of the top-selling products in the singles category: Twirl, Wispa, Cadbury Dairy Milk, Boost and Wispa Gold (IRI data).
Susan Nash, trade communications manager at the company, says: "Single confectionery is a critically important category in your store and if its potential is fully maximised, it can play a huge role in driving incremental sales."
One of Nestlé’s best sellers is, of course, KitKat, which is currently backed by a promotion which links confectionery and hot drinks as the ’perfect break partners’. The activity introduces a new character to consumers: Joe the Mug. Joe is a mug who is looking for the perfect partner to spend his drinks break with and will feature in a new media campaign from the brand as well as an on-pack promotion.
The promotion gives KitKat consumers the chance to win one of 50,000 thermochromic Joe the Mugs. Each has a face on one side and when hot water is added a message from KitKat is revealed on the other side. Consumers need to locate the code on the inside of each promotional wrapper and enter it online to see whether they’ve won.
A £1m media campaign supports the Joe the Mug activity, focusing on social and digital media. In addition, KitKat masterbrand advertising will be on TV and in cinemas as part of a £2.2m campaign. It is expected that 80% of the brand’s target audience will see the ad at least six times.
Nestlé’s latest activity taps into a huge opportunity for confectionery to tap into hot drinks consumption. The company says there are 12 billion coffee ’occasions’ in the UK every year; yet only 3% feature confectionery.
Meanwhile, Cadbury has launched a new global brand platform, which takes it back to its roots, ie a family brand founded on generous principles. In a statement brand owner Mondelez said: "The new positioning will shine a light on the kindness and generosity that we see in society every day and facilitate moments of real human connection". Benazir Barlet-Batada, brand equity lead for Cadbury, explains: "In today’s world it’s easy to overlook those small moments of authentic human generosity, but actually they are happening all around us. We want to shine a light on these genuine acts of kindness and true moments of human connection that are occurring every day."The new £12m campaign includes TV, digital, social, PR, experiential and sampling activations. In addition, new out-of-home communications will include the famous Cadbury Dairy Milk glass and a half of milk icon with other positive symbols, such as a heart, smiley face and thumbs up. There’s no Cadbury branding, it simply features the new Cadbury Dairy Milk tagline "There’s a glass and a half in every one".
Sharing is another big trend in confectionery and Mondelez’s Nash says: "Chocolate bags is the fastest-growing standard chocolate segment (IRI) and we are driving that growth through innovation. We have brought even more of our hero brands to the bitesize category, with the launch of Cadbury Fudge Minis, Cadbury Curly Wurly Squirlies and Cadbury Picnic Bites." She says all three brands are consumer favourites and their launch in bags is aimed at recruiting pre-family and younger families to drive penetration for the category.
Another Mondelez brand partnership has just entered the bitesize category Cadbury and Oreo with the launch of Cadbury Oreo Bites, which are small Cadbury pieces filled with a creamy and crunchy Oreo filling."
Cadbury and Oreo are global brands which have already proved to be successful together. For example, since its launch in 2012, Cadbury Dairy Milk Oreo has been a power co-brand which continues to grow (+16%). It is now worth almost as much as the Oreo biscuit brand in the UK £49m (IRI).
The Cadbury Oreo brand alliance will be supported by a £2.5m activation plan this spring including PR, digital, OOH activity and in-store activation.
Meanwhile, Lauren George, brand and trade PR manager at Mars Chocolate UK, says the rise in popularity of the ’Big Night In’ is still relevant this year, with sharing packs still playing an increasingly key role in the confectionery market. Consumers are opting for larger formats to share everyday treats in company. And we are seeing large block and pouches continue to play a significant role in the confectionery category as more consumers look for better value. For retailers, maximising sales of these products is crucial to overall sales."
Meanwhile, Ferrero recently unveiled the wider roll out of its Kinder Bueno Mini Mix Box (rrp £2), after a successful trial period. Nielsen sales data reveals that Kinder Bueno Mini Mix outperformed competitors in the sector in terms of value, and was particularly popular among adult shoppers. The 97.2g boxes contain 18 mini chocs in Classic, White and Dark varieties. Boxes invite consumers to "Share a mini Bueno pleasure".
The darker side
Dark chocolate is an acquired taste but Nielsen data reveals that the category has seen consistent growth for the past three years and it’s now worth £211m, accounting for 5.7% of total chocolate but 70% of the premium market. Premium chocolate is also in growth.
Green & Black’s is a key brand in premium chocolate and last summer brand owner Mondelez launched the Velvet Edition range. Sitting alongside the Classic Green & Black’s organic range, its aim is to make darker chocolate more accessible by giving it a smooth, velvety finish. The launch was backed by Green & Black’s first-ever TV ad.
Now the upmarket brand is launching a 158g sharing carton of individually wrapped Pralines. Dark and milk chocolate varieties are available with the pralines containing a truffle filling, sprinkled with small pieces of hazelnut, with a whole hazelnut in the centre. Finally, if you’re not already stocking any American chocolate then it might be time to start as it is selling rather well over here. Specialist confectionery wholesaler Hancocks reports that between 2016 and 2017 its American candy saw a 32.2% uplift in invoiced sales and a 37.2% increase in invoiced quantity.
Reese’s and Hershey’s dominate, with the top five performing products for Hancocks being Hershey’s Cookies n Cream, Reese’s Peanut Butter Cups, Reese’s White Peanut Butter Cups, Reese’s Big Peanut Butter Cup and Reese’s Nut Bar. Hershey’s Cookies n Cream held the top spot until this year when it was overtaken by Reese’s Peanut Butter Cups with Hershey’s chocolate products accounted for 36.36% of all invoiced American confectionery sales for Hancocks.
Cashing in on chocolate confectionery
Retailers looking to raise awareness and boost sales in store should ensure their core confectionery display is always merchandised in line with how a shopper navigates the fixture. So says Lauren George, brand and trade PR manager at Mars Chocolate UK. "In-store theatre and tactical use of POS material can drive additional sales, especially in high-footfall areas, and as more and more consumers are buying chocolate confectionery on impulse, retailers should maximise on this opportunity, she adds.
Of course, all the confectionery manufacturers offer advice on merchandising their products. Recommendations include:
Focus on getting the main confectionery display merchandised well, with strong availability of core singles lines;
Multi-face key singles lines this helps to ensure strong availability and attracts shoppers to make those all-important impulse purchases;
Ensure you use all POS available to you, such as dumpbins and counter units - these are guaranteed to raise awareness and generate impulse sales;
Site singles and bars alongside savoury snacks and drinks, to promote additional basket spend;
Have a range that covers all need states: singles, duos, tablets, sharing bags, gifting and seasonal;
Make the most of brand investment have displays in-store when consumers will be most aware of products due to advertising or other media investment;
Ensure prices are clear;
Where possible, take products out of their case
"We sell an abundance of chocolate probably due to its placement and the fact that a lot of it sells for £1. Bags of Cadbury Buttons and Twirl Bites are our biggest sellers. We have them in a dumpbin next to the tills and they’re often on at £1. Some people pick up six or seven bags at a time. They sell because they represent better value £1 for a bag versus 70p for a bar. Bigger bars of chocolate sell well too. We have a selection and usually some are on offer which makes them good value."
A more indulgent way to eat KitKat
KitKat is moving into a more indulgent, sharing format with the launch of Senses 20 individually-wrapped bite-size chocolates. There are three different flavours: hazelnut, double chocolate and salted caramel.
Each is a combination of KitKat chocolate and wafer with either a layer of praline and crunchy pieces of hazelnut (hazelnut), salted caramel filling with crunchy caramel flakes (salted caramel) or chocolate ganache and crunchy cocoa nibs (double chocolate). The boxes are available in two varieties: a mixed box which contains all three flavours; and a hazelnut only box. Both have an rrp of £3.99.
Nestlé says this new launch taps into the growing consumer trend for special and shared occasions with family and friends where the ideal confectionery offering should make a great gift for the host, as well as being good to share. The company believes current boxed chocolate brands under index with younger shoppers as they are typically used for more traditional gifting and appeal to older shoppers. However, it says a younger adult audience is keen to try something new and different "something visually inspiring that looks great on the table and therefore great on their Instagram feed".
The launch will be supported by a £7m campaign including new TV advertising starting at the end of the month and running until the beginning of June, as well as national sampling to drive trial and social media activity.
Retailers are advised to stock Senses alongside other boxed chocolates, specifically between cartons and after dinner mints.